Kalika Municipality Fines Construction Company NPR 11.6 Million for Delayed Administrative Building Project

Chitwan. Kalika Municipality has fined the construction company NPR 11.6 million for failing to complete the administrative building by the stipulated deadline. The fine was imposed after the deadline was not extended despite multiple extensions granted for the work.

According to Mayor Binod Regmi, Ravina Construction was awarded the contract on February 27, 2020 (Bikram Sambat 2076 Falgun 15) with a completion target of two years. When the work was not finished by that date, the municipality extended the deadline four times, finally setting it for November 16, 2024 (Bikram Sambat 2081 Kartik 30).

The Public Procurement Act allows for imposing a fine and granting an extension if the work is not completed after the deadline expires. The decision to fine was made by the executive meeting and subsequently approved by the municipal council, even after the municipality provided necessary facilitation.

According to Chief Administrative Officer Devraj Chaulagai, the construction entrepreneur filed a case at the Hetauda Bench of the High Court challenging the municipality's decision. He stated that the court has dismissed the case. The construction company has completed 95 percent of the work. The agreement for the building construction was for NPR 115.6 million.

The company has been paid NPR 70 million to date. The construction entrepreneur has requested the municipality to release the remaining payment after deducting 10 percent. According to Chaulagai, the construction company is attempting to facilitate discussions through an intermediary.

The company is preparing to hand over the building, expecting to receive the remaining payment later if the fine is waived following discussions. The municipality is prepared to pay the remaining amount while keeping the fine amount pending. The building had suffered vandalism during the 'Jana Andolan' (People's Movement).

The construction company has completed the repair and maintenance work by claiming insurance. Due to the delay in the construction of its own building, the municipality has been forced to operate from a rented building for nearly nine years.