The Commission for the Investigation of Abuse of Authority has appealed to the Supreme Court against the verdict of the special court in the Melamchi drinking water project corruption case. The special court had acquitted 11 people, including three former secretaries, while finding seven partially guilty.

The CIAA appealed to the Supreme Court on Sunday, saying that the Special Investigation Team had decided the case ignoring the facts and evidence revealed by the investigation and the precedents and principles set forth by the court, and that the punishment should be as per the demands. Assistant Spokesperson of the CIAA, Ganesh Bahadur Adhikari, said that the appeal was filed with the Supreme Court demanding that the decision be overturned and the defendant be punished as mentioned in the charge sheet. 

The then Deputy Executive Director Bhoj Bikram Thapa, who was made a defendant in the Special Investigation Team case, is a signatory to the 10-point agreement signed between the government and the Gen-G party on Wednesday. Prime Minister Sushila Karki signed the agreement on behalf of the government and Thapa on behalf of Gen-G. The CIAA appealed the case, arguing that Thapa and others should be punished as per the demands in the Melamchi case.

The CIAA had filed a case in a special court on February 6, 2080, alleging corruption in the construction of the Melamchi Water Supply Project's 'headworks' and tunnels, making 15 individuals and three companies, including four former secretaries Sanjay Sharma, Bhim Prasad Upadhyay, Gajendra Kumar Thakur and Mukunda Prasad Poudel, as defendants. A fine of Rs 6.8 billion was imposed against them.

The CIAA had made former secretaries Sharma, Upadhyay, Thakur and Poudel, joint secretary Rudrasingh Tamang, then board member of the Melamchi Water Supply Development Committee Chandra Bahadur Thapa, then executive directors Ghanashyam Bhattarai, Ramchandra Devkota and Suryaraj Kandel, then deputy secretaries (accounts) of the development committee Manibhadra Neupane and Begnath Poudel, accounts officer Ramchandra Neupane and deputy executive director (construction site) Bhoj Bikram Thapa, and deputy secretary of the committee Kedar Prasad Aryal as defendants.

Similarly, the then deputy team leader of the consulting company Iptisa Services/JV, Shiva Kumar Sharma, Iptisa and BETS Consulting Services, and the Melamchi Drinking Water Project construction company CMC di Ravenna were also filed as defendants. The Melamchi project was built with loans and grants from the Asian Development Bank.

The government had signed a contract agreement with the Italian company Cooperative Muratori and Cementisti (CMC) on 31 Ashad 2070 at a cost of Rs 8.8155 billion excluding VAT to construct the headworks and tunnel of the drinking water project. During that period, the Authority filed a corruption case, claiming that there was irregularity in the collusion of employees and contractors.

During the construction, the contractor company CMC fled without completing the work. The project work was stalled after the company fled with 95 percent payment. The Auditor General's Office had also directed that the culprits be investigated and action be taken against them, saying that there were irregularities in the project. The CIAA had filed a case after completing the investigation after nearly 2 years.

In that case, the bench of the then President (Judge) of the Special Court Tek Narayan Kunwar and members Tej Narayan Singh Rai and Murari Babu Shrestha had found guilty in the corruption case, finding only the then Secretary Thakur and the then Executive Directors of the Development Committee Suryaraj Kandel and Ram Chandra Devkota and consultant Shiv Kumar Sharma and the consulting company Iptisa Services and its partner BETS Consulting Services and the construction company CMC The Ravenna guilty, while acquitting the rest.

The special court had sentenced former Secretary Thakur to 8 years and one month in prison, a fine of Rs 100 million and an equal amount to be recovered. The then executive directors Kandel and Devkota were sentenced to 8 years and 1 month in prison and fined Rs 100 million 1061 thousand each and the same amount of fine and Rs 295 million 65 thousand fine and the same amount of fine were recovered from Devkota. Sharma, the then team leader of the consulting company Iptisa, was sentenced to 8 years in prison and fined Rs 295 million 65 thousand fine and the same amount of fine was recovered as a senior citizen.

The Authority has sought annulment through an appeal, calling the decision erroneous. The Authority has argued in its appeal that the various defendants should be punished by fixing different amounts of fines, stating that "the construction business was financially benefited by taking action contrary to the provisions of the agreement and the prevailing legal provisions related to public procurement, providing additional mobilization to the contractor in two installments in violation of the agreement and more than the law, not recovering the amount of 'provisional payment' by adjusting any bill submitted for payment by the consultant and the management committee as per the provisions of the agreement, etc. are corruption-related offenses."

The special court had ordered the recovery of Rs 62.19 million and the same amount from Iptisa and BETS (Bates) and a fine of Rs 261.1 million and the same amount from the Italian company CMC. The appeal states that ‘the decision to award a lesser amount of damages to the defendants Gajendra Kumar Thakur, Suryaraj Kandel, Ramchandra Devkota, Shiv Kumar Sharma, Iptisa, Bates/CMC The Ravenna and to acquit the other defendants without a judicial evaluation and analysis of the grounds and evidence attached to the investigation file is erroneous.

The initial design of the construction of a tunnel of about 26 kilometers from the Melamchi project site to Sundarijal was done by ‘Norplan S’ under Norwegian assistance. The design was to dig the tunnel through the drill and blast process and provide initial and final support. For that, there was a provision to build three additional auxiliary tunnels. The contract for the headworks and tunnel was won by the Chinese construction company ‘China Railway 15 Bureau Group Corporation and China Machinery Industry Group Corporation Inc’ in a JV. 

On February 19, 2009, an agreement was signed with a Chinese company, and the construction work was to be completed within a period of about 4 years and 4 months (1,590 days) on September 2, 2013. However, the construction contractor failed to manage manpower, equipment, and construction materials as per the work plan and contract prepared by him and to work as per the terms of the agreement, so the agreement was cancelled on September 25, 2012 with 18 percent of the contract period remaining. During this period, only 6.44 km of tunnel was constructed. After the contract was cancelled, the government also confiscated the bank guarantee of the Chinese company.

After that, an international bid was called for to construct the remaining tunnel and headworks, and an Italian company was selected and an agreement was signed at a cost of Rs 7.72 billion excluding VAT. Later, the cost was increased to Rs 8.71 billion without an agreement, but the Authority has raised questions through the original offense and an appeal filed in the Supreme Court. On July 15, 2013, the government had set a period for completing the project within 3 years by concluding an agreement on the remaining work. The company tried to extend the period by making excuses that it could not work during the earthquake and blockade.