ADB asks Nepal for reform in water utility

The Asian Development Bank (ADB) has asked the government to go ahead with institutional reforms connected with Melamchi Drinking Water Project (MDWP) before the bank holds its board meeting in Manila, Phillippines on June 16.

Quoting a highly placed source, the Kathmandu Post daily said a high-level government delegation, which returned to Kathmandu Friday after meeting ADB officials at bank headquarters in Manila, came back with this message.

"The ADB wants institutional reforms to move ahead swiftly, including handover of the assets of Nepal Water Supply Corporation in the Valley to Kathmandu Valley Water Supply Management Board, and leasing of the Valley's water utility by the board to Kathmandu Upatyeka Khanepani Limited for 30 years," the report quoted the source as saying.

The source added that with progress in these institutional reforms, bank officials will have some basis for arguing in favor of extending funding for Melamchi during the board meeting, the report said.
ADB is a leading donor of the project and had agreed to provide loan of US$ 140 million for the purpose.

Melamchi project is designed to supply 170 million liters of water daily from Melamchi River in Sindhupalchowk district to Kathmandu where supply is currently less than half the demand of 250 million liters daily.

Following the decision of Minister for Physical Planning and Work Hisila Yami not to award the contract of managing valley's drinking water to UK's Severn Trent company, ADB had announced that it would pull out from Melamchi.