Hearing on Melamchi project on Wednesday

Kathmandu, December 23

The Patan High Court has continued its earlier direction to the government till Wednesday that disallows it to freeze the security deposits of the Italian contractor of Melamchi Drinking Water Project, Cooperativa Muratori e Cementisti (CMC) parked in different banks.

The hearing on the case was postponed after the scheduled hearing could not be completed today. “As lawyers of both the government and CMC have sought for the hearing to be conducted on Wednesday, the government is directed to comply with the previous direction of the court,” reads the notice of the court.

Meanwhile, the ongoing national convention of lawyers is also said to have hampered today’s hearing on the Melamchi case.

The court has summoned the government and CMC representatives for the next hearing on Wednesday.

A single bench of Chief Judge Prakash Kumar Dhungana of the Patan High Court had issued a temporary stay order to the government on Thursday on a petition filed by CMC representatives against the government’s decision to freeze the security money that CMC had deposited in banks.

The government had frozen CMC’s security money worth Rs 2.56 billion deposited at Standard Chartered Bank Nepal and Nepal Investment Bank after the Italian contractor quit the Melamchi Water Supply Project citing that its parent company in Italy has declared its bankruptcy to the Italian government.

Citing that the government’s decision to freeze its bank accounts is against the law, CMC had filed a writ petition at the Patan High Court on Wednesday.

Though consultations are underway to bring back CMC in the project, the stay order in the case from the court could be a setback to the government as it has been claiming that freezing CMC’s security deposits will reduce the financial risk of the government even if the government fails to bring back the Italian contractor for the project.

Minister for Water Supply Bina Magar, meanwhile, has been claiming that the Rs 2.56 billion worth security deposits could be used to pay off dues of sub-contractors and labourers hired by Italian firm and continue with the project construction works.