A senior official at the Melamchi Water Supply Development Board has raised questions about the “seriousness” of the new Italian contractor of the Melamchi project as it started seeking additional payments arguing that its quoted price was “insufficient to meet its costs”.
The board has said that the performance of the Italian CMC Cooperativa Muratorie Cementisti di Ravenna has not been satisfactory as it had been digging the tunnel 21-25 meters a day against the daily need of 40 meters to complete the project within deadline. So far, around 13km of the 27km tunnel has been completed.
“The contractor’s behaviour has raised questions about its seriousness to complete the task,” said Ghanashyam Bhattarai, executive director of the board. “The contractor is carrying on with the work but its performance is not satisfactory.”
The current contractor was appointed after the Melamchi Board terminated the deal with China Railway 15 Bureau Group for the same work in September 2012.
The Italian contractor was chosen in active involvement of Asian Development Bank, the main financier to the project. It was claimed at that time that “the best” contractor would be chosen to complete the project on schedule.
The Melamchi Board has concluded that the project will not be over by the September 2016 deadline at the current pace.
On the other hand, headwork and some other tasks which have been sub-contracted have also been stalled, according to the project.
“Given the current pace of works, we don’t see the possibility of project completion within the deadline,” said Bhattarai. The contractor is said to have issued a warning that it would discontinue with works unless additional money was provided. The CMC, which contracted the job for Rs7.72 billion, reportedly said it has no funds to pay Rs800 million to its suppliers.
According to Bhattarai, the board has been receiving complaints from suppliers about payment dues. The board said it has already disbursed Rs1.5 billion as “mobilisation advance” and Rs870 million in additional payments.