KATHMANDU, March 30: The state has incurred a loss of one billion rupees due to the flaws in the contract for the installation of embossed number plates on vehicles. The losses have resulted from payment arrangements based on the BOOT (Build-Own-Operate-Transfer) system and contract deal in US dollars. The projected loss is anticipated to escalate. With the rise in the value of the US dollar, the state now faces a scenario where it must pay more than Rs 5.60 billion for the contract originally valued at Rs 4.79 billion.
According to a source at the Department of Transport Management (DoTM), clause number 15.1 of the contract agreement signed between the DoTM and the Bangladeshi company Decatur Industries Inc in 2016 stipulates that the Government of Nepal must pay 95 percent of the contract amount to the company for providing the embossed number plates in case of of delays caused by the government's side.
“Since the payment is in US dollars, the state has incurred a loss of one billion rupees so far," the source stated.
The government will now have to pay 22.25 percent more to Decatur than when the agreement was signed. At the time of this agreement, Bijaya Kumar Gachhadar was the Deputy Prime Minister and Minister for Physical Infrastructure and Transport. Under his direction, the then director general of the DoTM, Chandraman Shrestha, signed an agreement with Decatur. At that time, Minister Gachhadar formed a committee comprising Birendra Bahadur Swar, Anoj Ghimire, Laxman Singh Bhandari, Mohan Prasad Bhattarai, Rajkumar Maharjan, and Padam Singh Mahara, under the coordination of Arjun Kumar Thapa, head of the procurement unit of the DoTM, to prepare the contract.
Gogan Bahadur Hamal (currently serving as joint secretary) and computer engineer Keshav Kumar Gautam were also in the committee. Based on the committee's report, the decision to procure embossed number plates was endorsed by the then Director General Shrestha. The tender was issued based on the recommendations provided by the same committee.
Four companies participated in the tender process. A French company called Selp SAS offered USD 40.5 million (about Rs 4.5 billion) for the contract. Sources claim that a Bangladeshi company Computer Services Limited offered USD 42 million (roughly Rs 4.20 billion). Bangladesh company Decatur offered USD 38.75 million (about Rs 3.875 billion). Another company, Pingao-JKG Consortium, offered USD 29.681 million (about Rs 2.96 billion). The tender selection committee led by the then director of the DoTM, Engineer Kharel, decided that it would be appropriate to award the contract to Decatur.
According to the prevailing laws and the Public Procurement Act in the country, tenders should be awarded based on the lowest bid. However, in this case, the contract was awarded to Decatur, causing a loss of around Rs 910 million to the state.