The Melamchi Water Supply Project (MWSP) is considered to be the most viable long-term alternative to ease the chronic water shortage situation within the Kathmandu Valley. The Project is designed to divert about 170 MLD of fresh water to Kathmandu Valley from the Melamchi River in Sindhupalchowk district. Augmenting this supply by adding about a further 170 MLD each from the Yangri and Larke rivers, which lie in the upstream proximity of Melamchi are also being investigated as future supply sources.
Ministry of Physical Planning and Works (MPPW) is the executing agency for the Project and an autonomous Melamchi Water Supply Development Board, formulated for Project implementation, is the implementing agency.
The Board, as an independent project implementing body has come a long way to collect the necessary funds to implement the project since 1998. The major donor of the project, Asian Development Bank (ADB) approved a Loan 1820-NEP (SF) on 21st December, 2000 and it was effective from 28th November, 2001. After six years of project implementation, Government of Nepal and the project’s funding partners, felt necessicity to change the scopes of project implementation arrangement by splitting the MWSP into the following two distinct sub-projects in 2007;
(i) the Melamchi River Water Diversion Subproject (Sub-Project -1) covering all project activities in Melamchi Valley including constructions of Water Diversion Tunnel (WDT) and Water Treatment Plant (WTP) at Sundarijal and
(ii) Kathmandu Valley Water Supply and Sanitation Subproject (Subproject -2) comprising water distribution activities in Kathmandu Valley. EMP implementation requirements as per EIA and EMP of MWSP, 2000 and 2001 have been covered both of these sub-projects.
The MWSP originally comprised four parts:
- infrastructure development;
- social and environmental support;
- institutional reforms; and
- project implementation support.
A complementary Kathmandu Valley Water Services Sector Development Program (SDP), has also been effective from December 2004 to support reforms and institutional development in the water services sector engaging private sector participation (PSP).
Various factors including political events during the past 6 years of MWSP and 3 years of SDP implementation did not make it possible to complete the project as planned. The withdrawal of the three co-financing development partners for the Project – the World Bank, NORAD, and SIDA resulted in a shortfall of $133 million in the originally projected cost of US$ 464 million as priced in 2000 AD.
ADB approved the proposed project restructuring, mainly reflecting the abovementioned financial and institutional changes made during its 6 years of implementation and proposing the removal of identified obstacles in implementation, in February 2008. After the restructuring, the Project has now been revised to a total of $317.3 million and a completion date of June 2013. The cost will be jointly funded by several agencies such as: ADB (Loan 1820-NEP) – $137 m, JBIC – $ 47.5 m, JICA – $18 m, NDF – $10.5 m, OPEC – $13.7 m, and GoN – $ 90.6 million.