Abandoned Projects and Broken Promises

Nepal is facing a serious slowdown in its infrastructure drive. The Federation of Contractors’ Associations of Nepal has stated that about 30 percent of government-planned projects over the past decade have stalled. Out of roughly 100,000 projects worth around Rs 1.9 trillion, nearly 30,000 remain unfinished. Contractors cite conflicting provisions in the Public Procurement Act and 41 other related laws as major obstacles. Delayed contract awards, land acquisition hurdles, forest clearance problems, slow payments, and contracts issued without secured budgets are other significant challenges. Irregularities by consumer committees add to the problem. The result: projects drag on for years, bank guarantees are seized, loans default, and public frustration grows. This situation exposes weaknesses in Nepal’s construction sector. The country frequently announces ambitious infrastructure projects but struggles to complete them on time. Roads begin with loud promises but remain half-built, while bridges stand incomplete over multiple fiscal years. The pattern is no longer surprising. Legal troubles further complicate project completion. When more than forty laws govern a single sector—the construction sector—confusion among stakeholders persists and deepens. Officials hesitate, files move slowly, and contractors often exploit gaps in the legal framework.

Additionally, the Public Procurement Act, meant to ensure fair competition, frequently creates rigid procedures that delay decisions. Disputes over land acquisition and delays in forest clearance also hold up projects. In many cases, the state awards contracts before securing funds. Contractors are not always innocent victims. Government data shows that around 250 projects have turned “sick” because builders failed to deliver, some remaining incomplete for over fifteen years. Some contractors bid low to win tenders and abandon work when costs rise. Others stretch deadlines, hoping for price adjustments or political protection. This culture of weak accountability has eroded public trust. Consumer committees and local bodies also require scrutiny. The anti-corruption watchdog has identified cases of fund misuse at the grassroots level. Small committees are often given large sums to manage without proper monitoring, making leakages almost inevitable. In this environment, former Kathmandu Mayor Balen Shah and Nepali Congress leader Gagan Thapa have voiced their frustration. Shah’s insistence on taking stern action against underperforming contractors reflects public exasperation with years of delays and signals a push for accountability. Thapa, however, points to a more systemic problem, stating that reform of multiple laws is necessary, because punishment alone will not suffice.

Even honest contractors face obstacles due to legal, payment, and approval issues. Addressing these anomalies requires policy-level solutions. The government should consolidate scattered laws into a single, clear framework for infrastructure projects. No contract should be awarded without secured budgets and land clearance. Payments to contractors must adhere to strict timelines to prevent cash flow crises. Backlisting rules should be enforced firmly against habitual defaulters. Consumer committees must face tighter auditing and public disclosure requirements. Finally, project monitoring should move to real-time digital tracking so citizens can follow progress. Nepal does not lack project plans, but it lacks coordination, discipline, and honest execution. Addressing these issues can reduce abandoned or “sick” projects and accelerate the country’s infrastructure construction drive.