Infrastructure Development Minister Sunil Lamsal has announced that the Mechi Corridor contract terminated for a 9.5 kilometre section of the road in eastern Nepal, ending a deal that spent more than five years reaching less than half of its physical work. The minister announced the decision on his Facebook page on October 29, 2026, saying stalled contracts that stay incomplete for years will no longer be allowed to continue.
The section covers Belase to Golakharka Bhanjyang on the Mechi Corridor (Kechana to Kanchanjunga), an important alternative road that links Ilam, Panchthar and Taplejung districts. The corridor gives the eastern hills an alternative connection from north to south, so delays on any section hold back travel and trade for all three districts.
Why the Mechi Corridor contract terminated
The contract for the 9.5 kilometre section was signed on Asar 29, 2078, at a value of Rs 27 crore 22 lakh including VAT. Construction was supposed to finish by Poush 29, 2080. The deadline was extended repeatedly, giving the contractor a total of 63 months. Even with that extended time, financial progress reached only 45.28 percent and physical progress reached only about 47 percent, according to the minister.
The gap between the time given and the work completed is the reason the ministry ended the agreement. A contract that uses 63 months and still leaves more than half the road unfinished cannot be carried forward on further extensions, the minister indicated, adding in his announcement that abandoned contracts will be terminated and work will move ahead through a new process.
What happens next on the Mechi Corridor
The unfinished road will not be left as it is. The ministry says it will arrange the resources needed to continue construction and secure a multi-year contract agreement, then move the new tender process ahead soon. A multi-year agreement matters for a section like this because it lets the next contractor plan and fund the remaining work across fiscal years instead of working in short, uncertain stretches.
For road users in Ilam, Panchthar and Taplejung, the practical question is how quickly the new tender moves from announcement to a signed contract and then to work on the ground. The minister has promised a swift new process, but no date for the new tender notice has been announced yet.
Mechi Corridor contract terminated in a wider contract crackdown
This is the second contract termination announced by the minister in recent days. On October 28, 2026, he announced the termination of the contract for the Mangalsen to Sukhad to Khetgaire to Julimare to Dhakari road in Achham after that 10 kilometre road reached only 19.83 percent physical progress despite its deadline being extended to Baisakh 16, 2083. Read the earlier report here.
Taken together, the two decisions signal a tougher line from the ministry: contractors that miss deadlines even after repeated extensions face termination, and the remaining work goes back to tender rather than staying with the original contractor. For the Mechi Corridor, that approach will be tested by whether the promised fresh tender for the Belase to Golakharka Bhanjyang section is actually issued soon and completed faster than the deal it replaces.
Source: Minister Sunil Lamsal’s Facebook post, October 29, 2026: Minister Sunil Lamsal’s Facebook post