KATHMANDU: Bank of Kathmandu (BoK) and Himalayan Bank Limited (HBL) have finally received full amount against the guarantee initially paid for the Melamchi water supply project.
BoK and HBL had filed legal action against China Railway 15th Bureau Group to recoup Rs 1.6 billion in counter-guarantee funds from China Construction Bank (CCB).
After hearing the case, the High People’s Court of Henan Province, in favor of the two Nepali banks, instructed the CCB to give HBL and BoK their performance guarantee and advance payment guarantee, respectively.
Senior Advocate Gandi Pandit confirmed the developments in the case to Khabarhub, stating that BoK and HBL had finally received the counter guarantees they had initially paid for in the Melamchi project.
BoK had provided the Melamchi Water Development Board with advance payment guarantee of $6.62 million and 1.41 million euros, while HBL had issued $6.665 million as performance guarantee in order to give the counter-guarantee to CCB.
The China Railway 15the Bureau Group had been guaranteed by the CCB.
However, the Melamchi Water Supply Development Board terminated the agreement with the Chinese company in September 2012 as the company did not complete the project in accordance with the agreement signed.
In the same year, the Patan High Court mandated that HBL and BoK pay the Melamchi project’s guarantee sums and the banks were long awaiting to receive the amount paid by them then.
Senior Advocate Pandit said the Nepali banks had been struggling to gain their guarantees and have finally secured the guarantee amount.
Now, BOK and HBL have finally received the amount, which was long due to them.