KATHMANDU, Dec 22: The Patan High Court has issued an interim order to Melamchi Water Supply Project not to freeze the performance bond of Cooperativa Muratori e Cementisti (CMC) di Ravenna, the Italian contractor for Melamchi project.
Single bench of Judge Prakash Kumar Dhungana on Thursday asked the government to put the process of freezing performance bond on hold until further decision by the court.
According to the court’s registrar Baburam Dahal, the next hearing on the case is slated for Sunday. The government has been asked to provide show cause for freezing the bond which the contractor submitted to the project while getting the contract of tunnel works and head works of Melamchi Water Supply Project.
The government owns bank guarantee of Rs 1.34 billion from Standard Chartered Bank and Rs 1.21 billion from Nepal Investment Bank Limited.
The MWSP had requested both the banks on Monday to freeze those bonds after the contractor’s project manager and other staffers attempted to abscond the project, claiming that they were in loss. They were briefly detained and released and their documents were confiscated.
The government said that it had to freeze the performance bond to cover up the cost of the contractor’s liability to different vendors, suppliers and employees.