Kathmandu—The government has stepped up diplomatic efforts to resolve disputes concerning the Melamchi Drinking Water Project.
The government and Italian contractor are at loggerheads on several issues which has affected the tasks of projects. With fresh deadlock, the chances of meeting Dashain deadline appear slim.
Minister for Water and Sanitation Bina Magar on Thursday consulted with Foreign Minister Pradeep Gywali seeking latter’s support to resolve the problem. Magar urged FM Gywali to take up the matter with Italian government.
At a time when Italian contractor CMC of Melamchi Drinking Water Project has obstructed construction works by demanding compensation of construction investment, consulting company has sacked its Nepal chief. The government move has further escalated the dispute.
The government officials suspect that the project chief was sacked without coordination with Nepal intending to increase the cost of the project.
Expressing dissatisfaction over the compensation system of Nepal, the contractor company registered complaint at international level Dispute Adjudication Board. It is a ploy to remove the chief just before hearing of the complaint, said Krishna Raj BC, secretary at the Ministry of Drinking Water. The plan to supply of Melamchi Drinking Water Project to people by October will be lingered, according to the project officials.
The causes of disputes:
Italian Contractor CMC demanded a compensation of Rs 1.65 billion and extend project period by 540 days.
Engineer Thomas submitted a technical report mentioning unnecessary to pay a compensation of Rs 1.65 billion.
After Thomas’s report, the company issued demobilization letter to him.
According to Secretary BC, Thomas demanded only Rs 280 million compensation as per loss incurred due to earthquake and additional 80 days to complete the project.
An agreement between Nepal government and CMC was signed in 2013 to construct the project.
The government scraped the contract with Chinese company that began to work in 2008. Then, another contract was signed with CMC in 2013 through new bidding process.
After CMC failed to complete the project by scheduled date of 2017, the period was extended.
Owing to the border blockade, earthquake, and delay works of contractor, the project could not be completed.
Rs 7.72 billion except VAT was signed in the agreement but Nepal government has already released Rs 8.75 billion to CMC.
As per the agreement, it was mentioned to open cut 35,000 cubic meters.
Nepal government has already deposited Rs 280 million in the account of contractor and extended period by 80 days, according to secretary BC.
Expressing dissatisfaction over Nepal’s compensation system, Contractor Company filed a complaint at international level Dispute Adjudication Board (ADB).
ADB comprises one representative from the government, one from contractor and one from both contractor and company consensus.
If Nepal government loses in the hearing, Nepal should pay Rs 1.65 billion and add 540 days to complete the project.
After tunnel breakthrough—Sindhu-Gyalthum 7.5km section—on April 10, tunnel digging of total 27 km was completed.
However, construction of head box is yet to be started for tunnel surface concretization, finishing and other final works. Finishing works have been also halted.
It was proposed to build temporary dam to supply water immediately but is also yet to begin.
