Government still pursuing Italian firm for Melamchi

  • House committee ask probe into what made CMC suddenly leave the project

Feb 15, 2019-

Even after terminating the contract with the Melamchi water project’s main contractor a week ago, the government seems bent on bringing the Italian builder back.

Water Supply Minister Bina Magar on Thursday informed the Finance Committee of Parliament that the government was still working on bringing back the contractor, Cooperativa Muratori e Cementisti di Ravenna.

“Even though the contract has been terminated, the government and the ministry are ready to work with the CMC if it is ready to come back,” Magar told the committee.

“We have not made any legal mistake by terminating the contract. Nor has it caused any loss to the government,” Magar said, defending the ministry decision of scrapping the contract with the CMC.

After nearly two months of failed negotiations—and following the contractor’s failure to respond to the 14-day

window period—the government had sent a letter of termination to the CMC on February 7.

Magar also told the House committee that her ministry was exploring other available options to complete the


“We can either bring the CMC back and complete the project or hire a new builder for the remaining works. However, the first option remains our priority, as it will help us complete the project early,” Magar added.

The government’s intention to bring back the Italian contractor even after terminating the contractor had become clear after the ministry sent a team of officials to Singapore to hold discussions with CMC officials. The talks, however, failed to yield any results.

Earlier after CMC staff left Nepal in December—after a midnight drama in which Nepali officials tried to apprehend them—the builder had told the government that they could return if their certain preconditions were fulfilled. A guarantee that its staff’s passports will not be confiscated and there will not be any travel ban on them were among the preconditions.

Dinesh Shrestha, who was in the team that travelled to Singapore, had told the Post that the CMC was positive about returning to Nepal to resume work provided that the government agreed to fulfill some of their demands.

Shrestha also told the Post that the CMC was expecting “a solid response” from the government by February 10.

During the talks in Singapore, the CMC also demanded that the government advance payment worth Rs1.5 billion in 10 months time to clear dues of the sub-contractors, according to Shrestha, a local sub-contractor associated with the CMC.

A high-level CMC official told the Post that the CMC was waiting for the employer’s [Nepal government] response.

Besides sending the team to Singapore, the government had also repeatedly said that either local contractors or the Nepal Army could be other options to complete remaining works.

The parliamentary committee, however, lashed out at the Water Ministry officials for dragging the project to the condition of uncertainty.

Reminding the ministry officials and the minister about its previous directive issued on December 20 last year to complete the project without inflating the expenses, the committee expressed its serious concern, saying the project has not made any progress since then.

The committee members also wondered why the Melamchi contractor was ditching the project, which was near completion.

“There should be an investigation into developments that led the CMC to suddenly abandon the project, which was near completion, as the company was set to get paid soon,” the committee said in its decision. It has asked the ministry to take action against those involved in the fiasco and inform the committee in a month.

The committee also urged the government to conduct a case study of the Melamchi project so that other megaprojects would not meet the Melamchi’s fate.

Published: 15-02-2019 11:22

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