Uncertainty surrounds Melamchi project due to minister’s inaction

Published On: March 4, 2019 11:00 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, March 4: Melamchi Water Supply Development Board has already prepared contract documents for remaining works of the Melamchi Water Supply Project (MWSP) after terminating contract with Italian contractor for tunnel and headworks – Cooperativa Muratori e Cementisti (CMC) di Ravenna – of the project.

However, the process is not moving forward because of the inaction of Minister for Water Supply Bina Magar who appears to have thrown her weight behind the same contractor.

The mega project faced unexpected hurdle when the contractor left walked away from the project in December last year. The government waited for the company to return but eventually terminated the contract signed with it in the first week of February. 

“There is a pressing need to complete the project at the earliest. But the project is suffering from indecision,” an official of MWSP told Republica, requesting anonymity as he is not authorized to talk to media.

According to project officials, only around 5 percent of works to divert Melamchi waters to Kathmandu are remaining.

Surya Kandel, project director of MWSP, said his office was ready to start contract process for the remaining works. “But we have not received go-ahead,” Kandel said, refusing to divulge further details.

MWSP officials say that if the procurement process for remaining works, which is expected to cost Rs 600 to Rs 700 million, is started immediately, they can bring Melamchi waters to Kathmandu by July. 

Sources at the government claim that few banks, which provided bank guarantee and performance guarantee for the Italian contractor for Melamchi and Tahanhu Hydropower Project, as well as vendors and suppliers, who are awaiting payment from the contractor, are lobbying to bring the Italian contractor back. If the same contractor returns, they do not have to pay additional guarantees.

Minister Magar was not available for comment. Staffers at her secretariat say that the minister will speak with media only after the project makes some progress.

Speaking at parliamentary meetings, including the Finance Committee meeting held two weeks ago, Minister Magar maintained that Melamchi waters can be brought to Kathmandu at the earliest only by bringing the Italian contractor back. But her claim is almost impossible as the contract with the contractor has already been terminated.

Project officials say that they cannot work as per the minister’s wish as such an act could come under the scanner of anti-graft bodies. 

“The only way is to begin the bidding process anew in a fast track mode through a cabinet decision,” an official at the Office of the Prime Minister and the Council of Ministers said.

Minister Magar had sent four officials, including her personal assistant Bijay Dev Bhattarai, to Singapore in the second week of Singapore to hold talks on issues raised by the Italian contractor. Before they returned from Singapore, Melamchi Water Supply Development Board issued final contract termination letter to the Italian firm.

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