Govt to resort to diplomacy to get bank guarantee amount from CCB of Melamchi project

The government has decided to take diplomatic initiatives to get back the bank guarantee from the Chinese bank of the Melamchi Drinking Water Project (MDWP).

The High Level Financial Sector Coordination Committee led by the Finance Minister on Thursday decided to ask the Ministry of Foreign Affairs to take such initiations to secure the bank guarantee amount from the China Construction Bank (CCB).

Similarly, Nepal Rastra Bank (NRB) has also been asked to hold necessary talks with its Chinese counterpart regarding the issue.

The CCB has been found reluctant to release the amount citing court’s order after the contract was terminated with the Chinese contractor China Railway 15 Bureau Group for the construction of the diversion tunnel of the Melamchi Drinking Water Project.

In the contract given to the China Railway 15 Bureau Group, the two Nepali banks including Himalayan Bank Limited and Bank of Kathmandu have given a performance security of $6.62 million and guarantee for advance payment of $6.62 million and 1.4 million euro (Rs 1.3 billion) for the CCB.

For the same issue, the Nepal Banks’ Association had been demanding government to take initiates to get back the amount from the Chinese bank. Nepalnews.com