Government mulls ending contract with Melamchi builder


Jan 18, 2019-

The government has moved a step closer to terminating the contract with the main contractor of the Melamchi Water Supply Project after it failed to turn up to resume work even after weeks.  

Rajendra Raj Panta, a senior divisional engineer and spokesperson for the Melamchi Water Supply Development Board, said the government was at the final stage of  terminating the contract with the Italian contractor Cooperativa Muratori e Cementisti di Ravenna.

“We are discussing the matter internally. We will soon notify the CMC headquarters in Italy regarding the termination of the contract,” Panta told the Post. “The contractor abandoned the project site on December 15 which gives us the right to terminate the contract immediately.”

The CMC staffers, who had left for their respective countries to celebrate Christmas and New Year, have not returned yet, leaving the project in the lurch. The CMC side, however, denies that they have abandoned the project.

Before leaving the country, the CMC had committed that they would return to work and also withdraw their project termination letter they had submitted to the government following a financial dispute.

The CMC, on the other hand, has sent a list of demands including some pre-conditions which the government must meet for its staffers to return and resume work.

The Italian builder wanted an assurance from the government that passports of its team members would not be seized and that they will not be blacklisted at the immigration.

According to Surya Raj Kadel, executive director with the board, many of the contractor’s demands--which included holding a meeting in a third country--are unacceptable to the government.

“The government is interested in dialogue. We are not holding peace talks which should be organised in a third country. If they are concerned about their safety, we assure them foolproof security here,” Kadel told the Post.

In response, the government sent a letter to the CMC on Tuesday, offering to pay the disputed amount of Rs350 million as decided by the Dispute Adjudication Board (DAB) and also to clear the dues if it came up with the bill.

“That’s the best possible offer we could put on the table,” Kadel said, blaming the CMC for resorting to tantrums instead of resuming the work. “They are not in a position to return to Nepal and resume the work because of their own financial issues. The company is facing bankruptcy serious crisis that they have money to pay local sub-contractors and suppliers nor can work on their own due to shortage of money, so they have come up with these demands which are nothing but excuses,” Kadel said.

In the letter, the government has given the Italian company until Friday to decide whether it would resume the work or not.  

The government officials approached by the Post concluded that unless the contractor responds in time, the government authority “has made up its mind to terminate the contract as the government cannot wait for the contractor forever”.

“We will wait until Friday night. If they don’t reply by then, we will terminate the contract and notify them about our decision on Sunday,” said Kadel. “This time it will be us [the Nepal government] who will be terminating contract.”

Published: 19-01-2019 09:43

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