Kathmandu, December 20

Minister of Water Supply Bina Magar said today that the decision of Italian contractor Cooperativa Muratori e Cementisti (CMC) to abandon Melamchi Drinking Water Project would not affect the pace of construction of the project.

Addressing lawmakers at the Finance Committee of the Parliament, she added, “The project is near completion, with just five per cent of the physical construction work remaining. Though CMC’s sudden decision to abandon the project has raised a few questions, the government is committed to completing the project.” She said the Ministry of Water Supply was in constant dialogue with CMC representatives on the issues concerned and was also dwelling on other possible means to ensure the project’s timely completion.

The argument that the project will be delayed doesn’t hold water, she added. Even in the absence of CMC, the government is in a position to ask sub-contractors of the project to complete the remaining project work, she assured lawmakers. “Some work related to construction of support walls and plastering the floor of the tunnel is left and that can be accomplished by sub-contractors. As sub-contractors of the project are in constant contact with MoWS, we can request them to complete the remaining work, if necessary,” Magar added.

Instead, the MoWS is trying to convince CMC to complete the project and has held meetings with its representatives in this regard.

“Though asking the Italian firm, which has already declared its bankruptcy, to complete the project is not good, seeking a new contractor will be lengthy and substantially delay the construction. In such a context, we are trying to convince CMC to complete the project assuring necessary facilitation from the government regarding some technical parts,” said Magar.

She clarified that even if the government failed to bring CMC back for the project, the government would not face any loss, as CMC had almost Rs 3.5 billion with the government and financial institutions in Nepal.

According to MoWS, CMC has deposited Rs 2.56 billion in commercial banks as project security and paid Rs 380 million to the government as guarantee money. Moreover, the government is yet to issue payment of Rs 150 million to CMC. “As we have already frozen this sum, we can use it to pay off dues of sub-contractors and labourers hired by CMC and continue with the project construction,” the minister added.

Stating that their parent company based in Italy was on the verge of bankruptcy and they did not have adequate funds to complete the project, CMC officials in Nepal had notified the government regarding their decision to terminate their project contract earlier this week.

Meanwhile, the Financial Committee has directed MoWS and the government to complete the project in the stipulated time, ensuring that the project cost does not rise.

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