Nepal | November 21, 2019

Govt formally cancels contract with CMC

• Melamchi Water Project

Himalayan News Service

Kathmandu, February 4

The government has formally cancelled the contract of the Melamchi Water Supply Project with the Italian contractor, Co-operativa Muratori e Cementisti (CMC) di Ravenna, today, following its failure to resume construction works.

According to Surya Kandel, executive director of the project, the deadline of the ‘notice to contract termination’ that was issued to CMC had expired today. The Melamchi Water Supply Development Board had sent a final letter to CMC to resume the remaining works on January 21 but the CMC has not replied yet. “The mentioned timeline is over and the contract with CMC has been formally terminated.”

“We have made multiple efforts from our side to establish communication with the CMC officials but they have failed to respond,” he added.

The contract included a legal provision whereby agreement would be automatically cancelled if the contractor did not resume construction activities within two weeks of receiving ‘notice to contract termination’.

Earlier, CMC had terminated its contract with the water project citing the company’s bankruptcy. However, government had not accepted termination letter of CMC as the project was in the final stage of completion.

According to Kandel, they are preparing to assign the remaining works of the Melamchi project to local contractors as per their expertise. “At present, we are having discussions on how to finish the remaining works as soon as possible and we will take a decision on that in a few days,” he informed.

Kandel further added that the project is preparing legal documents to assign the remaining works to local contractors.

However, some of the high-level officials from the Ministry of Water Supply are again trying to negotiate with CMC to call them back to resume remaining works, an official at the ministry informed on condition of anonymity.

Meanwhile, the termination of the contract with CMC will delay the construction of the Melamchi Water Supply Project, which was expected to be completed by the next few months.

A version of this article appears in print on February 05, 2019 of The Himalayan Times.

Follow The Himalayan Times on Twitter and Facebook

Recommended Stories: