PRESIDENT GIVES PARTIES ANOTHER DEADLINE TO END CRISIS Kathmandu 16 Sept.: President Dr. Ram Baran Yadav Sunday asked party leaders of the Big Three and the ruling Madeshi Morcha to find an outlet to a prolonged political and constitutional crisis before the beginning of the festive season that begins in another five weeks. A Friday deadline to end the deadlock ended without any result with parties exchanging accusations. The president told leaders the will face a grave crisis. Dr. Yadav told leaders he’s ready to make any move to end the deadlock. Maoist Chairman Prachanda said discussions with the president were positive and the head of state called for an outlet soon. Parties are holding a follow-up meeting at four in the afternoon. nnnn CONTRACT WITH CHINA FOR MALAMCHI PROJECT LIKELY TOBE CANCELLED. Kathmandu, 16 Sept.: The government is mulling over terminating a tunnel construction contract with China Railway 15 Bureau Group, the contractor of Melamchi Drinking Water Project (MDWP) after the latter unilaterally breached the agreement. Sources at the Ministry of Urban Development (MoUD) said formal announcement of the contract termination could be made this week, The Kathmandu Post reports. The Chinese company on Wednesday had notified the Melamchi Drinking Water Development Committee of its decision to end the tunnel construction contract, citing the government’s failure to release payment on time, provide project site, and frequent strikes. MoUD officials said they thought of abrogating the agreement with the Chinese company after the latter failed to show seriousness towards completing the project. “Despite several warnings, the company neither improved its performance nor accelerated the pace of work,” said an official. “Instead, the company threatened to terminate the contract.” MoUD officials admit that there has been some delay in payment and some disturbances as well. “But the company cannot terminate the contract on these grounds,” said the official. The much-hyped project has been mired in controversy ever since its inception in 2002. The deadline of the project has been revised several times, which has increased project cost as well as verification claims by contractors.The company has dug only 6.5 km tunnel, while it was supposed to complete 20 km so far. The project aims to supply water to Kathmandu Valley from Melamchi in Sindhupalchowk through a 26.5-km tunnel in Sundarijal. The Chinese company had pledged to expedite work with additional human resources and equipment in July during a high-level meeting between representatives of the government, Asian Development Bank and the company. The meeting had also revised work plan. With the government’s reluctance to continue with the contract, the project will be further delayed. “Termination of the contract with China Railway 15 Bureau Group might delay the project by one year,” Krishna Prasad Acharya, project chief, said. It was supposed to be completed by December 2015. Acharya said MDWDC board meeting would evaluate the company’s performance, assess the remaining work and clear its payment. The board meeting will also set criteria for hiring new contractor. The contract worth Rs 4.28 billon was awarded to the Chinese company on the condition that it would construct 700-800 metres a month and start work from four points simultaneously. ministry source said the Chinese company has so far received 35 percent of the contract amount, while 10 percent of the received amount has been kept as performance security. The government had awarded contract to the Chinese company three years ago. nnnn