NATIONAL 3 -(Spotlight Weekly)

Stumbling Block

The drinking water project is entangled in a debate whether it needs a hydropower plant

By A CORRESPONDENT

The Melamchi Water Supply Project (MWSP) is in a bit of rough waters. What started as a project designed to quench the thirst of the parching capital is now entangled in a debate over a hydropower plant -- planned to be built at the end of the 28 kilometers tunnel that is supposed to divert the water from Melamchi River in the north-east of Kathmandu.

When the idea of piping in the Melamchi water was catapulted to the fore, the basic thrust was to bring in water for Kathmandu Valley that has been facing acute shortage of drinking water mainly during dry season.

The final study on MWSP showed that the project would bring in 170 million liters of water per day by 2004. The quantity would further be increased to 510 liters per day by 2018 when water from two other rivers -- Yangri and Larke -- will be diverted together with the Melamchi waters.

The Nepal Water Supply Corporation has not been meeting even half the demand of 140 million liters of water per day during the dry season.

With the officialdom having shown some seriousness on the project, different donor agencies -- both bilateral and multilateral agencies -- agreed to fund the different components of the MWSP.

A water tanker : A waiting Melamchi water

Norad, the Norwegian aid agency, assured 24 million US Dollars for the diversion component. Similarly, the Asian Development Bank has agreed to provide loan for the bulk distribution, Japan International Co-operation Bank for water treatment plant and the World Bank for the rehabilitation and expansion of Kathmandu Distribution System.

Later, even other donors like Swiss International Development Association, Nordic Development Fund, among others, assured that they would provide assistance for the tunnel component -- the most costly part in the MWSP -- presently estimated at 400 million US Dollars.

So, what has been the hitch? Officials at the Ministry of Housing and Physical Planning claim that there is still shortage of 18 million US Dollars for the construction of the tunnel. "We have requested the Norwegian Government to make the required money available," they say.

The diversion scheme, that was earlier estimated to cost not even 100 million US Dollars, has now reached as high as 150m. US Dollars thanks mainly to the delay in the commencement of the project.

That apart, experts also point at the hydropower component at the end of the tunnel responsible for increasing the project cost. At the face of it, the power plant is estimated to cost 18 million US Dollars. "But, in actual cost the power plant has added the extra burden of 40 million US Dollars," knowledgeable sources say.

"Due to the need of the hydropower plant, we have to construct bigger tunnel and bring in increased quantity of water."

The hydropower is initially expected to generate electricity between five to 25 MW. Once the waters of Yangri and Larke Rivers are also piped in the Melamchi tunnel later on, the power plant is supposed to produce power as high as 50 MW.

How did the hydropower plant get into the MWSP? Stressing on the need to utilize the big force of water that the 28 kilometer long tunnel would splash out, experts and donors propelled the idea of generating electricity from the water energy.

Then came the Norwegian condition for its grant that the government will have to privatize the Butwal Power Company and allow the private party running BPC to operate the hydropower plant in the MWSP.

The government last year floated 75 percent shares of BPC calling for global tender. Two companies -- London based Independent Power Corporation and Interkraft, a group of Norwegian companies with nine Nepalese partners -- reached the final bidding.

After the Finance Ministry demanded for rebidding by the two companies, IPC pulled out crying foul that the government had favored Interkraft. With one of the bidders having pulled out, the bidding process automatically was canceled. The government is yet to make a formal declaration of the re-tendering for BPC privatization.

Until that happens, the fate of MWSP remains undecided.