BIRATNAGAR: The Infrastructure Development Offices in Morang and Okhaldhunga, under the Ministry of Physical Infrastructure Development of Koshi Province, have been found to have paid millions of rupees against the rules in road construction projects.

According to the report of the Office of the Auditor General for the financial year 2024/25, it has been found that these two offices gave price adjustments to construction entrepreneurs that were not in the agreement, showed more work than the actual measurement, and made differences in bill calculations.

According to the report, an overpayment of more than Rs 22.5 million is seen in Morang and Okhaldhunga alone. The Auditor General has directed to recover such payments.

The Auditor General concludes that although the payment of running bills in road construction should be based on measurements and contract conditions, that could not happen. The report states that due to collusion with construction entrepreneurs or technical errors, the tendency to show greater quantities than measurements and release money by giving facilities not even mentioned in the agreement has received encouragement.

9.2 million paid against the agreement

The Infrastructure Development Office, Okhaldhunga, has been found to have paid Rs 9.234 million extra to a construction entrepreneur against the terms of the procurement contract. This amount was paid to Singh and Brothers Bibash JV.

In May 2022, the Infrastructure Development Office under the Koshi Province Government had advanced a multi-year project to upgrade the road from Manebhanjyang to Molung Khola-Sikapu. Under the project, there is a plan to construct four kilometers of blacktopped and six kilometers of gravel road. However, the blacktopping work has not been able to start till now.

Infrastructure Development Office, Okhaldhunga.

The Auditor General stated that although there is no arrangement for price adjustment in Clause 53.7 of the Special Conditions of the procurement contract, the office paid Rs 9.234 million to the construction entrepreneur up to the 12th running bill.

Stating that the money was paid without any provision in the agreement, the Auditor General has instructed the office to recover the said amount.

According to Suresh Prasad Sah, chief of the Infrastructure Development Office, Okhaldhunga, the project has achieved about 62 percent physical and financial progress so far. The construction company has received about Rs 190 million in payments till now.

The office has been claiming that the work was delayed due to the negligence of the construction entrepreneur itself. After the second extended deadline also expired in February, the future of the project has become uncertain. In May 2022, Singh and Brothers Bibash JV had won the contract for the construction of the said road for Rs 313.292 million.

More asphalt shown than measured

Similar nature of irregularities have been seen in the Infrastructure Development Office, Morang as well. An agreement was signed with Rautaha Construction, Udaypur, for 166.323 million rupees to blacktop 10 kilometers of the Bhaunne-Amatola road section of Morang.

The Auditor General stated that a big difference was seen in the quantity of asphalt (blacktopping material) during the payment of the 11th running bill of the construction work, which took place during the tenure of the then office chief Sushil Shrestha.

The Infrastructure Development Office Morang located in Biratnagar-3.

The report mentions that while the construction company should have been paid for only 141.66 cubic meters based on measurements, the payment was made by showing that 446.52 cubic meters of work had been done. When showing an excess quantity of 304.86 cubic meters at the rate of Rs 13,000 per unit, an overpayment of Rs 4.478 million, including Value Added Tax (VAT), was made.

Rule 123 of the Public Procurement Regulations, 2007 makes a provision that the payment of running bills must be made only on the basis of measurements. However, the Auditor General has determined that in this project, funds were released by showing a quantity greater than the measurements.

Over 5.2 million released excessively in Barju-Gadhi road

In the construction of the road connecting Barju to Gadhi Rural Municipality as well, an overpayment was made by making a difference in the bill calculation. This project was contracted for Rs 316.475 million.

Up to the 10th running bill, Rs 285.826 million had already been paid, including price adjustments. However, the Auditor General stated that while carrying forward the previous expenditure balance during the calculation of the 11th bill, a difference was made in the calculations.

The report states that due to this difference in the calculations, the construction entrepreneur was overpaid by Rs 5.221 million. The Auditor General has instructed to recover this amount from the construction entrepreneur as well.

3.4 million extra oaid in two more cases

While about Rs 9.7 million extra was found to have been paid in just two road projects in Morang, the Auditor General pointed out that about Rs 3.4 million extra was paid in two additional cases.

According to the report, while Rs 6.822 million should have been deducted from one construction entrepreneur for price adjustments up to the previous bill, only Rs 4.177 million was deducted. Due to deducting a lesser amount, an overpayment of Rs 2.999 million, including Value Added Tax, was made.

Morang’s Bhaunne-Amatola road section.

Similarly, when calculating the price adjustment of the sixth running bill for another construction entrepreneur, while Rs 986,000 should have been deducted, only Rs 613,000 was deducted. The Auditor General stated that from this, an overpayment of Rs 422,000, including Value Added Tax, was made.

How easy is the recovery?

Kharanand Isar, chief of the Infrastructure Development Office, Morang, says that letters will be sent to the construction companies regarding the arrears pointed out by the Auditor General. He states that if the amount is not returned, it will be deducted from the security deposit.

“We will study the arrears pointed out by the Auditor General and write letters to the construction companies,” Isar says, “The five percent security deposit amount of the construction company remains with us anyway. If the company does not return the amount, we will deduct it from the same security deposit and deposit it into the government treasury.”

However, the fact that Rs 9.2 million was paid in Okhaldhunga using a provision not present in the agreement, and that errors were repeatedly seen in measurements and price adjustments in Morang, has raised serious questions about the internal control and technical monitoring of the offices.

Lila Dhungel, secretary of the Citizen Watchdog Society Against Corruption, Morang, says that showing more quantity than the actual work done to make payments is a misuse of the state treasury.

“A practice has flourished where one piece of work is done, but while making the bill, money is withdrawn by showing a larger quantity than the measurement,” he says, “Both the employees and entrepreneurs involved in such payments taken outside the agreement require monitoring and legal action.”