Melamchi Water Supply Project

The residents of the Valley are facing chronic shortage of water and the situation is degrading
day by day.The condition during dry season is more critical.The total demand of water supply
is not fulfilled by KUKL and the private tankers. Due to the deficit of water,severe effects are
on human health,economic activities and the surrounding environment. Moreover,the
population is increasing at the rate of 4.78% per year is concerned issue ( CBS,2011). So,the
government of Nepal had been looking for an alternative source /way to address the problem
since 1973.In the year 1988,Binnie and Partners of the United Kingdom found a solution to
bring water from nearby Melamchi Valley which is about 50 km northeast of Kathmandu
Valley.Initial enviornment assessment was carried out in 1990 by Stanley and Association of
Canada and later in 1992, a full feasibility study was carried out by Australian company
Snowy Mountain Engineering Corporation. After the analysis, Melamchi river was found the
best alternative to supply water to Kathmandu valley.

Melamchi Water supply project (MWSP) is a multimillion project supported by several

foreign investors mainly from ADB, OPEC and JICA. Melamchi River basin lies in
Sindhupalchok district of Nepal and is a sub basin of Indrawati River basin. The Project
(MWSP) is taken as most viable long term solution to ease the acute water shortage situation
in the Kathmandu Valley. A separate board, Melamchi water supply development board
(MWSDB), was established by the government of Nepal in 1998 to implement the project.
MWSDB is responsible for construction and to search donor agency for the projects. The
MWSP is still under construction and planned to supply water to Kathmandu Valley by the
end of 2017; however, the project has crossed few extended completion deadlines. MWSP is
designed to transfer 170 MLD of fresh water from the adjoining Melamchi River in nearby
Sindhupalchowk district in the first phase (2016-17) via 26.5 km tunnel. Augmenting this
supply by adding further 340 MLD from Yangri and Larke rivers ,170 MLD from each
rivers will be focused in second phase(2017-23)(melamchiwater.gov.np,2016). The project
also aims to decrease the unaccounted water use from 40 % to 20 %, i.e., 10 % in
transmission and treatment and another 10 % in distribution system. As ,the Sundarijal water
treatment plant,which is under construction and is scheduled to be completed by 2017, has
processing capacity of only 85 MLD,making it impossible to process the total 170 MLD of
water delivered by first phase.Before upgrading the treatment plant and distrbution network
,the excess water will be released into the Bagmati( kathmandupost.com,2015).
S. No Features Units Description
1 Project Name Melamchi Water Supply Project
2 Executing agency Government of Nepal, Melamchi Water Supply
Development Board
3 Estimated cost US$ 317.3 million

4 Financiers/Donors Asian Development Bank

Government of Nepal
Japan International Cooperation Agency
Organization of Petroleum Exporting countries
Nordic Development Fund
Japan Bank for International Cooperation
5 Source of Water 3 Stage I: Melamchi River
Stage II and III: Yangri and Larke

6 Capacity MLD Stage I: 170 MLD (1.97m3/s)

Stage II and III: 170 MLD each from Yangri and
Larke rivers
7 Downstream Release MLD 34.56 (0.4m3/s) for environmental flow

8 Major Component of Melamchi Diversion Scheme (MDS):

the Project Includes access road and tunnel, a diversion
weir dam 57 m high, i n t a k e, control
system and sediment exclusion and 26.5-km
long tunnel running from Ribarma to
Mahankal, Sundarijal VDC in Kathmandu.

Water Treatment Plant (WTP): Conventional

gravity water treatment plant will treat the
water for World Health Organization (WHO)
drinking water standard through the process of
chemical flocculation, sedimentation, filtration
and chlorination. The plant will be located at
Sundarijal VDC, on the outskirts of the
Kathmandu city.
Some study estimated that household expenditures on water purifying and collecting water
other than tap water supply are more than NRs 500 per household per month. The study by
Research Triangle Institute in 2001 indicated that almost 70% of households that are
connected to the Kathmandu Upatyaka Khanepani Limited (KUKL) system are willing to pay
a monthly bill of NRs.600, and almost 50% of the households that are not connected to the
KUKL system are willing to pay a monthly bill of NRs 500. For households connected to the
KUKL system, the median willingness to pay (WTP) is NRs 900 per month for improved
services, i.e., at least 50% of the sample was willing to pay more than NRs900. The monthly
average WTP is NRs 1,030 among households with piped connections. For poor households
connected to the KUKL system, the mean WTP is NRs 800 (Research Triangle Institute,
2001).

However, the report is of 2001; monthly WTP must have been increased. According to UNDP
report in 2013, Nepals per capita gross national income rose by 101% over 19802012 to
$1,137; the remittance growth rate increased by 17% during the same period; and Nepals
GDP at purchasing power parity increased from $27.4 billion (1999) to $40.5 billion (2012).
Increase in household income directly attributes to the purchasing power of water supply.
Thus, it can be assumed that due to price escalation and inflation the WTP has been
increased. Currently, households depending on tankers generally pay NRs 200-250 for 1000
litre, which is far expensive than the minimum tariff set by KUKL domestic house
connections in Kathmandu Valley (NRs 100 for 10000 litre). Also, consumers generally did
not rely on the water quality from these alternative sources and purify the water in home
itself. This implies that people are likely to opt for household connections if the availability
and quality of the water is ensured.

The total project cost is US$ 317.3 million (NRs 33951 million). As of June 30, 2013, $166
million of the original $317.3 million had been disbursed, including $64.26 million by the
Asian Development Bank.The analyses indicate an economic internal rate of return of
approximately 13.5 percent. Since the current monthly tariff (minimum) of water set by KUKL
is NRs 100, the MWSP seems highly expensive. So, to pay back the loan from donors the
government will increase the tariff rate. Also, water cannot be taken as a free gift of nature in
the context of heavy investment required its treatment, quality control, distribution and pipeline
expansion (Unofficial source from KUKL).
SMEC (1992) estimated Rs 38 as the per m 3 cost of Melamchi water in 1992. When the rate is
inflated taking into account he consumer price index of Kathmandu valley, it increases to Rs
65.6 in 2000 and further high to Rs. 82.3 per m 3 in 2005 (Tiwari,2008). This shows that
unless water tariff is increased significantly it is difficult to sustain water services in
Kathmandu valley. However, charging water tariff at high rate is difficult nowadays due to
water becoming a political commodity. Therefore, a gradual approach of increasing tariff will
be seen in future.