Contractors Accused of Forming New Syndicate Using 'Average Bid' Method
Summary
Construction entrepreneurs allege that Nepal’s new average-bid procurement system is being manipulated by large contractors to form a new syndicate and win projects at inflated prices. The Public Procurement Monitoring Office has directed public bodies to cancel collusive bids quoted above estimated costs.
Key Points
- Construction entrepreneurs say a few large contractors are colluding to inflate the average bid and secure contracts close to that artificial average.
- The new Public Procurement (Second Amendment) Act, 2083 replaced lowest-bid contracting with an average-bid method to curb low-quality work and stalled projects.
- Alleged misuse of the system has been reported in projects including Damak Road, Hulasi Highway, Madan Bhandari Highway, Tamor Corridor, Katari-Ghurmi Road, Koshi Corridor, and Dharan-Chatara.
- The Public Procurement Monitoring Office has ordered public bodies to cancel bids above estimated cost when collusion is suspected.
