Melamchi is dead
Unable to continue after June 30: ADB

BY BIKASH SANGRAULA

KATHMANDU, May 22 - Six years after entering construction, Melamchi, the country's largest development project, met a sad demise Tuesday, with the Asian Development Bank (ADB), the project's principal donor, saying it cannot extend its loan

commitment to the project.

"As it stands now, it would not be possible to carry on with project activities, with the project closing on 30 June 2007. In such difficult circumstances, it is now for the government to decide how it wishes to proceed," said ADB in a statement issued Tuesday, a day after withdrawal by UK firm Severn Trent Water International (STWI) of a contract bid to manage Kathmandu Valley's water supply.

Appointment of a management contractor was a critical covenant in ADB's funding commitment to the project. After Minister of Physical Planning and Works Hisila Yami halted the contract award on May 8, the bank had repeatedly urged the government to award it, stating that without it the bank would be unable to extend its funding commitment. A cabinet meeting in the previous government had decided to award the contract to STWI, which was the sole bidder.

"A key provision of the loan agreement signed between the Government of Nepal and ADB on 24 January 2001 was that the restructuring of Nepal Water Supply Corporation and award of a private sector management contract for delivery of water services under competitive procedures must be completed prior to initiation of civil works contracting for the construction of the diversion tunnel from Melamchi Valley to Kathmandu," the bank said in the statement.

This provision of the loan agreement recognized that the chronic water shortages affecting Kathmandu are caused not only by lack of supply infrastructure and bulk water resources, but also by poor management of water services, the Bank has added in the statement.

"The signing of the private management contract was the very last stage of a long process to achieve the agreed institutional reform for efficient utilization of Melamchi's water. This long process, which has required six years of effort, cannot be completed now that the water utility operator is unable to obtain approval from the Government to sign the duly negotiated contract and the final bid validity has been withdrawn on 15 May 2007 (after nine extensions made since March 2006)," the bank has further said.

Melamchi project, which was scaled down from the original estimated cost of US $ 464 million to US $ 350 million in March this year, was designed to supply 170 million liters of water daily from Melamchi River in Sindhupalchowk district to Sundarijal in Kathmandu through a 26.5-km diversion tunnel. ADB had committed US $ 165 million to the project.

The daily demand of water in Kathmandu Valley is 250 million liters, while the supply is less than one-third the demand.

ya well,
sometimes someone somewhere needed to stand up to interference and bullying from ADB on how to run your country. so that's good.......
only thing is don't know how long it will last......

Sometimes I wonder if it is that big a deal as far as texhnology is concerned. If a leader from KTM appeals to the people there, free labor may be available, especially at this time, for the cause of the nation. And I'm pretty sure some topnotch Nepalese engineers will be available for fair salary. Am I talking too much?
Now don't tell me you go and do the job, but I'm pretty confident I know how to do it. If I really design the scheme and carry out, it may not last long, but it will bring extra water to the valley. If I can talk like this, I know there are a hundred of topnotch Nepalese engineers who could do it in a perfect way. So the trick is, the government has to pay these engineers well (if you don't then a foreign company like Severn Trent will suck up the fund).

UK firm STWI withdraws bid from Kathmandu Valley contract

By ANI
Tuesday May 22, 01:53 PM
Kathmandu, May 22 (ANI): Nepal Government's failure to fulfil its obligations for the proposed Kathmandu Valley's water supply management contract, finally led the UK firm Severn Trent Water International (STWI) to withdraw its bid.

STWI announced the withdrawal of its bid on Monday evening, six days after expiry of its ninth and final deadline to the Government for award of contract.

"Severn Trent Water International is disappointed by the failure to conclude the tender process for the proposed management contract to assist in the development and management of a new publicly owned water utility in the Kathmandu Valley," the STWI said in a statement posted on its website.

"The Government of Nepal has decided to seek an alternative route to meet the water supply needs of the Kathmandu Valley, and STWI wishes them success in their endeavour," it added.

The STWI Board had decided to withdraw its bid for the Kathmandu project on May 17, Kantipur online quoted high placed government sources as saying.

On the Asian Development Bank's (ADB) special request, the STWI agreed to withhold the decision till Monday, to provide time to the government to take decisions on awarding the contract, sources added.

The withdrawal by STWI is set to hit the Melamchi project, the biggest development project in the country.

On May 18, in a letter to Nepal's Minister for Physical Planning and Work, Hisila Yami, ADB Vice President Liqun Jin had expressed the bank's inability to extend any loan commitment to the Melamchi after June-end 2007, if a management contractor was not appointed by then.

ADB is the largest donor to Melamchi.

ADB's funding commitment expires on June 30. Its extension depends solely on appointment of a management contractor for which STWI was sole bidder.

ADB 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 affect 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 grant. (ANI)

I would like to know what was the reason for withdrawing the BID ?

My assumption is that STWI probably already greased up Girija and his cronies. And now that a new Govt is in place...he he they want their share of grease too. And STWI is not willing to grease them up again. Therefore HISILA YAMI withdrew from the project(My assumption not facts) ? OTHERWISE WHY WOULD THEY PUT A CHOKE HOLD ON SOMETHING SO VITAL FOR KTM AS WATER SUPPLY ? DOES NOT MAKE SENSE.

ADB is ready, STWI is ready but the Crony Politicians are not ? Hmm.. ..

It is not making assumption and becoming ideal in the project. It is more about the need of nepalese people and water is the first priority. Hisila can go back to jungle and become minister next day. But there are millions of nepalese who can not afford for drinking water.
We are not yet in the position to challenge donor agency. We have to be more practical.Hisila should compromise with the terms and condition. It is not her political agenda to win.

ASKED GPK AND HIS CABINET. THEY FORKERS ARE THE MAIN RESPONSIBLE FOR THIS.
ALL THE DONOR'S MONEY GOES TO THEIR BANK ACCOUNT IN INDIA LEAVING ONLY 10% FOR THE PROJECT.

.

Deuba, Melamchi project engineers and Deuba party corrupted Rs 90,500,000 from previous Melamchi project that was the root problem with Asian Development Bank (ADB) and World Bank.

International Bank does not have TRUST with Nepali Government. Nepali government crooks do not give INSURANCE to these international banks.

It is major problem with Nepali COORKS.

Deuba and his wife in his PAJERO in kathmandu.