Melamchi project terminates contract with CMC

Kathmandu, Feb. 7:

Melamchi Water Supply Development Board (MWSDB) on Thursday decided to terminate the contract with the Italian contractor CMC, the developer of the tunnels and head works of the Melamchi Water Supply Project (MWSP). 

The board said that a termination letter was sent to the CMC headquarter in Italy. It had published a 14-day notice against the contractor and waited till Wednesday, February 6, the last day the CMC had to contact the MWSDB, the implementing agency of the water transmission part of the project. 

"We waited for more than two months and are forced to terminate the contract in order to expedite the construction and complete the project at the early possible date," the board said. 

The Board was hoping that the CMC might return, and the construction would move smoothly as the termination of the contract and initiation for the new tender process would take more than a couple of months.

Meanwhile, the Ministry of Water Supply tried to persuade the contractor to come back to Nepal and held talks in Singapore on Wednesday and Thursday in an effort to convince the contractor for the timely completion of the project or figure out alternative ways to solve the problem.

The government had also asked the CMC not to leave the project in the middle. 

It was necessary to terminate the contract in order to clear the confusion and save the bank guarantee maintained against the contract, said Surya Raj Kandel, Executive Director of the Board.

With the termination of the contract, the future of the national pride project is unknown while the completion deadline is likely to pushed for another year. 

Headwork construction, tunnel finishing, fitting the ventilation shaft, hydromechanical gates and monitoring equipment are yet to be executed. 

According to the board, it will take about nine-month to construct the headworks.

The board has asked the government to find the best alternative to complete the project at the earliest date.

Published in The Rising Nepal daily on 8 February 2019.