Kathmandu. The new tender process for the national pride project SunKoshi Marin Diversion Multipurpose Project has been dramatically cancelled. Before the cancellation of the approximately 16 billion tender, the Director General of the Department of Irrigation, Dinesh Rajouriya, and the Chief of the SunKoshi Marin Diversion Project, Krishna Prasad Rizal, were taken into custody. According to a high-level police source, officials from the Prime Minister Balen Shah's secretariat had ordered their arrest. They were taken into custody from Siraha and Sindhuli on Kartik 12 and kept at the Office of the Prime Minister and Council of Ministers. They were released on the evening of the 13th. The notice of the tender cancellation was published in the Gorkhapatra on Saturday. Officials from the Prime Minister's secretariat pressured the Director General of the Department of Irrigation to cancel the tender process after their favored contractors were not selected. Initially, the Director General of Irrigation, Dinesh Rajouriya, rejected this pressure. He responded that the tender process was proceeding legally and that companies that did not meet the criteria had been eliminated. His stance was, 'I will not cancel the tender against the rules.' Director General Rajouriya was arrested for refusing to cancel the tender. Although the government cited technical reasons, the tender cancellation appears to be due to the interests of large construction entrepreneurs and high-level power struggles. According to sources from the Ministry of Energy, Water Resources and Irrigation, the tender was cancelled not due to technical or legal errors, but because the setting to favor certain contractors was disrupted. A total of 6 construction companies had competed in the international bidding (ICB) called by the SunKoshi Marin Diversion Multipurpose Project. 6 companies from China, India, and Vietnam submitted construction proposals. In the initial technical evaluation by the Department of Irrigation, only 3 Chinese companies were found eligible. Among those eligible in the technical evaluation were Chinese companies M-S China International Water and Electric Corporation, M-S Aneng-RCC (Rasuwa Construction Company) JV, and Sinohydro Corporation Limited. The other 3 companies were eliminated from the technical evaluation for failing to meet the minimum criteria. Those who did not meet the minimum criteria included SIL-KC Construction-FEWA (a JV of India and Nepal), Songda-Kalika Construction (a JV of Vietnam and Nepal), and CRGEC-SWDCC (a Chinese JV). A high-ranking official from the Ministry of Water Resources and Irrigation claims that the game of manipulation began after Kalika Construction, which had bid in a joint venture with a Vietnamese company, was eliminated. Among those deemed technically capable, two companies participated in the single tender process. However, one was in a joint venture with a Nepali company. This was M-S Aneng-RCC (Rasuwa Construction Company) JV. Rasuwa Construction Company is owned by Nepali Congress MP Mohan Acharya. Kalika Construction is owned by Nicholas Pandey, the Chairman of the Federation of Contractors' Associations of Nepal. According to ministry sources, Pandey and the Prime Minister's secretariat have a good relationship currently. Therefore, Prime Minister Shah's secretariat wanted to award the SunKoshi Marin tender to him. The source states that after Kalika Construction was eliminated from the technical evaluation of the tender process, the Prime Minister's secretariat increased pressure to cancel the tender. The Tender Was Certain to Go to Rasuwa According to the Public Procurement Act, when a Nepali company enters into a joint venture with a foreign company, the Nepali company is given an additional 10 points in the evaluation. According to that act, the company that proposes a price closest to the average price will receive the tender. Under average bidding, the financial proposals of all technically sound companies are summed up. This sum is then divided by the number of participating companies. The company whose proposal is closest to this average receives the tender. However, the Public Procurement Act also has another provision: a company that bids in a joint venture with a Nepali company will receive the tender even if it bids up to 10 percent higher in the evaluation. Due to this provision, the JV with MP Acharya's company was almost certain to win the tender. For this, the financial proposals of the technically eligible companies were prepared, and the tender was scheduled to be opened on Kartik 16. The estimated cost of the SunKoshi Marin Diversion project is approximately 16 billion, which is considered a very large tender in the context of Nepal. Given that Nepali contractors generally handle tenders up to only 2-4 billion rupees, securing this tender was considered significant. Why Did the Game of Interests Begin in SunKoshi? The source claims that the main reason for the tender cancellation is linked to the three ineligible companies. Among the three companies deemed ineligible in the technical evaluation of the tender process, Songda-Kalika Construction is a joint venture company with Kalika Construction, owned by the current Chairman of the Federation of Contractors' Associations of Nepal, Nicholas Pandey. According to sources, he has a close relationship with Prime Minister Balen Shah's secretariat team recently. On the other hand, the Balen team does not have a strong relationship with MP Mohan Acharya. Rather, he is said to be in more communication with Energy, Water Resources and Irrigation Minister Biraj Bhakta Shrestha and close associates of Rastriya Swatantra Party Chairman Ravi Lamichhane. When Kalika failed the technical evaluation, a game to cancel the tender itself began, as Rasuwa was certain to get it. With the Prime Minister's secretariat's interests aligning, pressure was put on Director General Rajouriya to cancel the tender. However, the Director General refused the Prime Minister's secretariat's directive. He stated that cancelling a process that was proceeding according to a global tender without reason could lead to lawsuits from eligible companies, making the project uncertain and affecting Nepal's international image, hence it should proceed. After he refused to comply with the directive, he was taken into custody without an arrest warrant. He was released only after agreeing to cancel the tender. The fact that the Director General of the department and the project chief were taken into custody and the tender was cancelled shows that it was not just the contractors who were vying for this tender process. The shadow of powerful political centers is seen behind them. Employees Harassed Without the Knowledge of the Departmental Minister When the 16 billion tender process was cancelled, the leadership of the parent ministry, Energy, Water Resources and Irrigation, was not in the country. Minister Biraj Bhakta Shrestha was attending a United Nations program related to energy in Thailand. Energy Minister Shrestha had prioritized the project's tender process to be completed within three years. He had instructed the Department of Water Resources and Irrigation to award the project tender by last August, but the process was delayed until now due to the revision process of the procurement act. Regarding this, Energy Minister Shrestha stated that he has no comment. He understands that the work done by the Prime Minister's Office, being a higher authority than him, is for good. 'The higher authority has stopped the tender process citing irregularities. It is necessary to understand that this is for a good cause,' says Energy Minister Shrestha. 'The government's principle is to work transparently. It must have happened accordingly.' The incident where the Prime Minister's Office harassed the departmental chief in the name of tender cancellation is not the first. Previously, the then Director General, Tirtharaj Aryal, was taken into custody in a similar manner for not succumbing to pressure to cancel the tender for passport printing. The chief and commissioners of the Commission for Investigation of Abuse of Authority, who were investigating the matter, were also held at the Prime Minister's Office for 9 hours. Coincidentally, at that time too, the Foreign Minister Shishir Khanal was abroad, but due to the Foreign Minister's stance, the Balen team backed down from the process of cancelling that tender. Currently, a German company is printing passports. Past Tender and Balen's Old Interest The tender for the SunKoshi Marin Diversion Multipurpose Project was cancelled by the then Energy Minister Kulman Ghising. Ghising had instructed to terminate the contract, citing extremely slow physical and financial progress and repeated reminders yielding no improvement. Ghising took charge of the Ministry of Energy, Water Resources, Physical Infrastructure, and Urban Development in the interim government formed after the Janamat movement. According to sources, when the then Energy Minister Ghising was preparing to cancel the project tender in Kartik 2082, the team of the then Mayor of Kathmandu Metropolitan City, Shah, pressured him not to cancel the tender. Sources close to Kulman claim that then-Infrastructure Minister Sunil Lamshal himself met with the then Energy Minister Ghising and urged him to cancel the tender only after giving the contractor company some time. Following Lamshal's interest, Ghising also gave the contractor company Patel-Raman JV two months' time. Despite no satisfactory progress even during that period, the contract with Patel-Raman JV was terminated on November 8, 2082, on Ghising's instruction. The construction company Patel-Raman JV, which started work on SunKoshi Marin in Magh 2079, had received the contract to complete construction by Asar 2084. While approximately 61 percent of the contract period had elapsed, only about 10 percent physical progress had been made. This project is being constructed to divert water from the SunKoshi River through a 13.1-kilometer tunnel to the Marin River in Sindhuli district for irrigation in the Terai-Madhes districts. At the time of the contract termination, the bank guarantee of 2.4 billion rupees for performance security and 1.2 billion rupees for advance payment, totaling 3.6 billion rupees, was forfeited by Patel-Raman JV. The company had received the project tender for 14.08 billion rupees (including tax). By the time the contract was terminated, the government had already paid the contractor company 2.14 billion rupees (approximately 15 percent). Flouting Good Governance, Creating International Distrust If the tender process had continued, the diversion project, stalled for ten months, would have certainly gained momentum, but with the current complications, the tender process appears to be heading for further uncertainty. Stakeholders are concerned that trying to exclude foreign companies that participated in the international bidding and reached the final stage without reason will lead to distrust in Nepal's public procurement system internationally. They believe this could create a situation where foreign contractors hesitate to participate in Nepalese projects in the future. Engineer Laxman KC strongly objects to the cancellation of the SunKoshi Marin Diversion Project tender process. He states that the unnecessary pressure exerted in this process has flouted the law and procurement practices. 'If someone is dissatisfied with the technical evaluation, the legal recourse of going to the review committee or the court is open, but forcing the cancellation of a tender by intimidating responsible employees is extremely objectionable,' said KC. KC expressed concern that the cancellation of a tender that had reached the final stage would delay the national pride project by years, and the millions spent by participating foreign companies would be wasted, leading to a loss of international trust in Nepal's system. He added that engineers play a role of about 60 percent in the country's overall development structure, and such incidents would demoralize technical professionals and further increase brain drain. KC emphasized that the state and civil society should create an independent working environment for technical professionals to make development construction successful.
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