The Patan High Court on Thursday ruled in favour of the government’s move to seize the Melamchi project contractor’s guarantee amounts deposited in banks in Nepal

Quashing the previous temporary order, the division bench of Chief Judge Prakash Kumar Dhungana and Judge Krishna Bahadur Thapa ruled in favour of the Melamchi Water Supply Project on Thursday. On December 21, the court had asked the government not to freeze the bank guarantee amount of the Italian contractor Cooperativa Muratori e Cementisti di Ravenna (CMC).  The latest ruling means the government can now access Rs2.56 billion that the CMC has deposited at Standard Chartered Bank Nepal and Nepal Investment Bank, according to Senior Advocate Gandhi Pandit, who along with Shailendra Kumar Dahal and Shikhar Pandit, advocated for the Melamchi project.

“Now the bank guarantee amount will be transferred into Melamchi project’s account within two days. This is a big win for the government,” Pandit told the Post.

The government decided to freeze their bank guarantee deposits in two banks under nine different topics after the CMC terminated the project contract on December 17 citing financial dispute. The Italian contractor had moved the court appealing against the government decision of blocking its money deposited in the banks.

“The CMC had breached the contract, therefore the government had the right to take the money as per the international practices,” Pandit told the Post.

The CMC had withdrawn the project termination letter last Friday and expressed its commitment to resume the work on the project after Christmas.