by Kalpit Parajuli

The Maoist minister for Infrastructure and Labour refuses to grant the Melamchi Water Project commission to the English company Stwi as the Asian development bank had urged. The ADB wi8ll cut funding by June 30th is a commission winner is not announced, possibly Stwi.

Kathmandu (AsiaNews) – Hisila Yami, Maoist minister for Infrastructure and Labour  in Nepal, has discarded the request made by Asian Development Bank (ADB) to give the management contract of Kathmandu valley’s water supply to UK firm Severn Trent WaterInternational (Stwi), who had won the commission years ago in a public competition.  Accordino to Yami, the Melamchi Water Project should be entrusted to local experts rather than a “controversial foreign company”. The newly appointed minister, representing the Nepal Communist Party Maoist also claims that the project shouldn’t be awarded to Severn Trent which doesn’t know the systems and policy of Nepal.

Meanwhile the Adb ADB says if the management contract to STWI is denied it would stop further assistance to the Melamchi water project, the biggest water project in the country Stwi. ADB vice president,Liqun Jin, in his letter to minister Yami had expressed the bank`s inability to extend any loan commitment to the Melamchi after June-end 2007, if management contractor was not appointed by then..

The Adb is the Melamchi Water Project’s principal investor. Apart from its initial commitment of 0 million, the bank has committed an additional million to Melamchi in March this year.

The bank’s funding is meant for constructing a 26.5 kilometre diversion tunnel from Melamchi River to Sundarijal in Kathmandu, which is the costliest component of the project.  Melamchi is designed to supply 170 million liters of water daily to Kathmandu Valley, which faces chronic water scarcity.

The vice president Jin had also said in his letter to Yami that overturning the cabinet decision of the previous government to award the contract to the UK firm would not only hinder implementation of Melamchi, but also affects Nepal`s status as the bank`s Developing Member Country(DMC). As DMC, Nepal gets loan and assistance from the bank`s Asian Development Fund window for various development projects. Half of the funding comes as grants.

• NEPAL
• Melamchi
• Water
• Project
• ECONOMY
• ASIAN
• BANK
• DEVELOPMENT