Army illegally employed tourists for Fast Track project

The Nepali Army, responsible for constructing the Kathmandu-Tarai Fast Track, has been found to have distributed funds illegally. The Auditor General’s report revealed that the Army disbursed over $76,000 (around Rs 10m) to foreign nationals on tourist visas, which is against the law prohibiting such individuals from working for wages.

The Army employed South Koreans, including senior geologists and slope stabilization specialists, who received monthly wages while on tourist visas. The report detailed payments of $29,663, $23,615, and $22,836 in different phases. The Office of the Auditor General has recommended adherence to immigration laws.

Brigadier General Gaurab Kumar KC, spokesperson for the Nepali Army, explained that South Koreans staying long-term convert their visas to working visas. However, those visiting for short-term work often end up working on tourist visas because it takes around a month to obtain working visas.

“Their working time is almost over by the time their visas are converted. So, they work here on tourist visas, and we have to pay them for their work,” KC told ApEx. He mentioned that the concerns raised by the Office of the Auditor General have been noted and are being addressed.

The report also highlighted that key experts, both foreign and Nepali, were changed twice, potentially impacting project quality. Rule 69 (F1) of the Public Procurement Regulations, 2064, prohibits changing the lead human resource proposed in the consultant’s terms of reference (ToR) unless due to illness, accident, or death post-contract.

The Auditor General’s report further highlighted the Army’s mismanagement of about Rs 80m worth of bailey bridge materials. The project procured materials worth Rs 414.23m for 14 sets of 51-meter-long bailey bridges. Despite the contract stipulating the supply of all 14 sets, only eight were installed. Of the remaining six sets, three were installed by the Bridging Division of the Army, while three sets worth Rs 78.51m were left to deteriorate at the Khokana site. The report urged the project to ensure proper use of materials to prevent rust and degradation.

Additionally, the Army failed to maintain proper records for construction materials received from forest areas, as required by law. Receipts for stones, gravel, and other construction materials extracted from forest areas should be submitted to the Division Forest Office, but the Army has not maintained these records. The Auditor General's report suggested that the project keep accurate an updated records.

According to the report, Rs 2.27bn was spent on consulting services, comprising 4.85 percent of the construction cost and 4.1 percent of the total cost. As the national pride project duration increases, consultancy costs will rise, emphasizing the need for timely project completion.

Moreover, the design of the 6.4 km road in Khokana of Lalitpur under project Package 11 has not been prepared due to disputes regarding land acquisition. Out of 5,172 acres of land to be acquired, 344 acres are still pending acquisition. A committee, chaired by the Defense Minister, has been formed to resolve the land dispute in Khokana. The report warns that delays in resolving these disputes and in design-related work will increase both the cost and the duration of the project. It emphasizes the importance of completing dispute resolution and design work promptly to meet the project’s target completion period.

On 11 Aug 2017, the Pushpa Kamal Dahal-led government handed over the Kathmandu-Tarai Fast Track Road Project to the Army. Of the 13 project packages, seven have completed purchase management, with Rs 49.24bn spent so far. Three packages are under court consideration, and contract management for two packages is ongoing. The design for the Khokana section under Package 11 is still pending due to land acquisition issues.

Since the project’s handover six years ago, the deadline has been extended four times, with the current deadline set for April 2027. However, the project's progress stands at only 33.99 percent, with financial progress at 35.63 percent.

The project has also faced numerous controversies, including the approval of a blacklisted Indian firm for bidding. Despite being blacklisted, India’s KMC Construction Ltd was shortlisted alongside Poly Changda Engineering Co Ltd of China and RVNL-ABL Joint Venture for one of the project packages. 

As per the Public Procurement Act and Regulations, the project must be awarded to the lowest bidder. With KMC Construction bidding Rs 14bn against RVNL-ABL Joint Venture’s Rs 17bn and Changda Engineering’s Rs 28bn, the Indian firm is likely to secure the project despite its blacklisted status.