Twenty-eight sub-contractors of the Melamchi Water Supply Project working for the Italian contractor Cooperativa Muratori e Cementisti (CMC) di Ravenna have claimed they have yet to get payment totaling Rs 1.50 billion.
The companies yet to receive payment include Birat Motors, BM Enterprises, Jyotishri Pvt Ltd, HG Enterprises, and Megatech Hydro and Infrastructure Pvt Ltd among others. Issuing a joint statement on Thursday, the 28 companies have demanded payment of the due amount even as CMC looks set to abandon the project.
The companies, that have held different rounds of dialogue with Secretary at the Ministry of Water Supply Gajendra Thakur, have warned of agitation after being told they will not get payment.
"We have talked with the secretary. But he has not showed willingness to help us get the payment," Chief of Megatech Sriram Neupane told Setopati.
They have threatened to padlock the site office of Melamchi and the Melamchi Water Supply Development Board in Kathmandu if the issue of payment is not resolved within 24 hours.
Neupane claimed that CMC is on the verge of terminating the contract due to negligence by the ministry. "It is true that CMC is facing financial problems but it would not have quit had the government paid the due amount," he added. "Investigation of the state of CMC's financial crisis has yet to be completed."
He accused the government of publicizing that CMC has gone bankrupt and it cannot complete the project even before investigation about its financial state has been completed.
CMC had been working till December 14. It has already informed the government that it cannot do additional works. It was demanding compensation of Rs 1 billion claiming that it suffered loss when construction could not be continued due to the Gorkha Earthquake in 2015 and the subsequent Indian blockade.
The government had agreed to give Rs 350 million in compensation but the ministry had withheld the amount saying payment will not be made until the project is completed.
Police earlier had arrested eight Italian staffers of CMC including project manager of the contractor Cristiano Greco from Royal Penguin Hotel in Thamel Sunday night claiming that the octet was leaving by a Qatar Air flight later in the night without informing the government.
Police claim the eight were trying to abscond abandoning the project in pretence of going home to celebrate Christmas.
The Italian company that earned around US$ 15 billion, around 75 percent of that from infrastructure projects outside Italy, has been suffering from cash flow problems from the start of 2018.
Credit rating agency Moody's Investors Service in September had downgraded the corporate family rating (CFR) of CMC to B3 from B2 and its probability of default rating (PDR) to B3-PD from B2-PD due to its deterioration in liquidity and free cash flow in the first half of the year 2018.
The government had brought CMC in 2013 after terminating the previous contract with China Railway 15 Bureau Group following their sluggish work. The Chinese company had constructed only 6.5 km of the 26.3 km tunnel from Ribarma in Sindhupalchowk till Sundarijal in Kathmandu and CMC was roped in to construct the remaining part of the tunnel.
The work of concrete lining 960 meters of the Melamchi tunnel is still remaining. Intake and closing the hydro-mechanical gate also have yet to be completed.
