Public Project Procurement Challenges in Nepal: A Comparative Study between Narayanghat–Butwal and Mugling–Pokhara Road Improvement Projects

Abstract

Public infrastructure projects in Nepal frequently experience delays, cost overruns, contractual disputes, and implementation inefficiencies despite reforms in the public procurement system. This study examines procurement challenges through a comparative case study of the Narayanghat–Butwal (N–B) and Mugling–Pokhara (M–P) Road Improvement Projects. A mixed-method approach was employed using literature review, document analysis, questionnaire surveys, field observations, focus group discussions, and key informant interviews. Data were collected from 68 professionals and analyzed using the Relative Importance Index (RII) and thematic analysis. The study identified inadequate project readiness, excessive reliance on lowest-bid (L1) contractor selection, inappropriate risk allocation, weak institutional coordination, audit-driven administrative practices, and ineffective contract management as major procurement challenges affecting project performance. Among these, inadequate project preparedness and lowest-bid procurement practices emerged as the most critical factors contributing to delays, cost escalation, design changes, and contractual disputes. A Spearman rank correlation of ρ = 0.84 (p < 0.01) between the two projects' rankings indicates that these challenges are systemic rather than project-specific. The study concludes that procurement challenges in Nepal are systemic and interconnected, requiring comprehensive reforms across the project lifecycle. Strengthening pre-procurement preparation, adopting quality-oriented contractor selection approaches, improving risk allocation, enhancing institutional coordination, and reinforcing contract management practices are essential for improving infrastructure delivery performance.