August 30: The number of supply, consulting and construction companies not working according to public procurement act and regulations has increased. Looking at the data since the fiscal year (FY) 2064/65, the number of blacklisted companies in the last fiscal year 2079/80 was the highest so far.

According to the Public Procurement Monitoring Office (PPMO) data, 162 companies were blacklisted last year. The office has been blacklisting construction companies and supply as well as consulting companies which do not comply with the laws.

In the annual report of the office for the year 2079/80, it is mentioned that the companies have been blacklisted for reasons such as not fulfilling the obligations according to the contract and for breaching the code of conduct.

The office has published the data of blacklisted companies from FY 2064/65 to last fiscal year. According to the report, 637 companies have been blacklisted in the last ten fiscal years. The list of blacklisted companies was the highest in the last fiscal year. It seems that many companies have been blacklisted in FY 2077/78 as well.

That year, 104 companies were blacklisted. Prior to that, the number of blacklisted companies used to be comparatively less. In the year 2064/65, the number of blacklisted companies was only 6. In the years since then, the number of blacklisted companies has been continuously increasing. Those on the blacklist, include bidders, consultants, service providers, suppliers, builders (individuals, firms, organizations and companies).

The office has informed New Business Age that the main reason why most of the companies were blacklisted last year was that they did not comply with the obligations according to the contract.

Ravi Singh, president of the Federation of Contractors Association of Nepal (FCAN), the umbrella organization of construction entrepreneurs, believes that this number has increased because of the delay in work due to lack of timely budget allocation, increase if production cost due to inflation, responsible officials of the contract management agency not taking responsibility for the work and the practice of working in joint ventures (JV).

"There is a problem in completing the work due to budget problems,” Singh said, adding, “Also, a competent company bags the contract and gives it to a JV company with no work experience, resulting in poor performance.”

The office mentioned that it monitored 87 public bodies last year. All the monitored public bodies have a procurement unit but most of the employees have not received training on public procurement. Similarly, it is seen that most of the public bodies have not made a 'purchasing master plan'.

In the Procurement Regulations-2064, there is a provision to prepare a procurement master plan when purchasing a plan or project that will be operated for more than 1 year or when purchasing an amount of more than Rs 10 million annually.

“It was found that procurement master plans have not been prepared in most of the public bodies," states a report prepared by the office, "Even the public bodies that have prepared procurement master plans have not prepared them in the prescribed format."