March 8: Tanahu Hydropower Limited (THL) has terminated the contract for diversion and headworks of Tanahu Hydropower Project signed with Italian firm CMC.
Tanahu Hydropower Limited had issued a notice of contract implementation on January 18. But the contractor did not return turn up in the project site within the 28-day mandatory period which ended on February 19, the company said in a statement.
The company then issued a notice of contract on February 19, giving the Italian contractor 14 days to respond. Since the Italian country did not respond even to the second notice, Tanahu Hydropower Limited issued final contract termination decision on Wednesday, according to the statement.
The company has also decided to seize performance bond of 8.74 million euros furnished by the Italian firm.
Tanahu Hyderopower Limited, the subsidiary of Nepal Electricity Authority (NEA), had signed the contract worth Rs 20.64 billion with CMC in October. The 140-megawatt project is financed by Asian Development Bank, among others.
CMC left the project site of Melamchi Water Supply Project earlier in December. The contractor is facing financial trouble in Italy as it has more liability is than its assets and cash.
Source : Republica