Melamchi set to roll again with new Chinese contractor The much-delayed Melamchi project designed to boost Kathmandu Valley?s drinking water supply is set to roll again with the appointment of a new Chinese contractor. The project had faced uncertainty and delay ever since the Korean contractor, Haniel Koneko demanded cost over-runs due to Maoist threats and walked out without finishing even five percent of the work on the access road. Koneko was demanding Rs 100 million extra as compensation while its bid amount was Rs 450 million. Negotiations between Koneko and the Melamchi Water Supply Project (MWSP) were deadlocked for over a year and construction ground to a halt. The government finally terminated the contract with Koneko last year, seized its performance guarantee of Rs 50 million and called for new bids. The China Civil Engineering Corporation (CCEC) was chosen over five Chinese, Indian and Japanese bidders. The controversy even dragged MWSP officials to the corruption watchdog, CIAA and the National Vigilance Centre which began an investigation. ?We think we have been able to convince the commission and the centre that everything is above board,? one MWSP official told us. The project and its main creditor, the ADB, seem happy with the selection of the Chinese company and say its Rs 1 billion bid is ?quite reasonable?. Koneko, they say, had quoted an artificially low amount to be selected with the intention of ?padding it up with overruns? later. Bidders have used loopholes in the FIDIC contracts in the Kali Gandaki and Middle Marsyangdi projects to quote low and demand high variation costs once selected. MWSP and ADB officials say there is less chance of this happening with CCEC and hope the project can now resume construction of the access road........... http://www.nepalitimes.com/issue234/nation.htm