Bankers decide not to do business with Melamchi, Chinese firm, bank KATHMANDU, JUN 11 - Banks have decided not to do any business with Melamchi Water Supply Development Board (MWSDB), China Railway 15 Bureau Group and China Construction Bank. Expressing their solidarity to Himalayan Bank Limited (HBL) and Bank of Kathmandu (BoK), which had given counter guarantee to China Construction Bank on the latter’s guarantee to former Melamchi tunnel contractor China Railway, 32 commercial banks of Nepal have said they “will not work with these three companies until HBL and BoK get their money back”. The banks’ decision has come at a time when the Melamchi Water Supply Development Board (MWSDB) has selected a new contractor — Italy’s CMC Cooperativa Muratori e Cementisti di Ravenna — for remaining work on the tunnel. The board has sought payment of the guarantee amount from the Nepali banks before a contract is signed with Italian firm. Although the banks have charged the Melamchi board of not showing any urgency to fight a legal battle with the former contractor to secure the release of guarantee amount, the board said it would not fight the case in a Chinese court as the contract agreement clearly states that any court case could only be filed at Nepali court. “We will not involve in a legal fight in China,” said Krishna Prasad Acharya, executive director of the board. “We may respond to the Chinese court if it seeks any detail with us.” Given the bankers deciding not to do business with the Melamchi board which could hurt its contract with the new contractor, Acharya said “we will see how these banks will translate their decision into action”. “There might be necessary measures to be taken,” he said. HBL and BoK had provided the counter guarantee in the form of performance security of $6.62 million and guarantee for advance payment of $6.62 million and 1.4 million euros. Bankers have said they were compelled to act on the issue as the government didn’t act even as a case has been filed in a Chinese court and the payment has been stooped from the Chinese bank. They added similar situations might occur frequently in the future if the government fails to bring the money back. Nepal Bankers Association (NBA) President Rajan Singh Bhandari said the government hasn’t responded to Chinese parties’ accusations and also hasn’t taken any step in bringing back the money. “ Melamchi is totally a government project. However, the government isn’t responding to the writ petition,” he said. The petition filed in the Chinese court has stated the project wasn’t completed due to problems in the Melamchi board itself. Bhandari said the government should debate on the issue since the money would be received by the country. Source: The Kathmandu Post
Posted on: Tue, 11 Jun 2013 13:05:52 +0000
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