Nepal: Kathmandu Valley Water Services Sector Development Program (Program Loan)

Sovereign Project | 36609-013

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Project Name Kathmandu Valley Water Services Sector Development Program (Program Loan)
Project Number 36609-013
Country Nepal
Project Status Approved
Project Type / Modality of Assistance Loan
Source of Funding / Amount
Loan 2058-NEP: Kathmandu Valley Water Services Sector Development Program (Program Loan)
Asian Development Fund US$ 5.00 million
Loan 2059-NEP: Kathmandu Valley Water Services Sector Development Program (Project Loan)
Asian Development Fund US$ 10.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change
Sector / Subsector

Water and other urban infrastructure and services - Urban policy, institutional and capacity development

Gender Equity and Mainstreaming No gender elements
Description The aim of the Project is to improve, on a sustainable basis, the operation of the water supply and wastewater services within the metropolitan and urban areas of the Kathmandu Valley. The objective of the Project is to support the water sector institutional reforms introduced under the Program and the scope of the Project includes: (i) introduction of the Capacity building and public private partnership support team (CBP Team); (ii) implementation assistance for the three (3) entities to be established under the Program, namely Kathmandu Valley Water Supply Management Board (KVWSMB), the Kathmandu Upatyaka Khanepani Limited (KUKL) and the Water Supply Tariff Fixation Commission (WSTFC); and (iii) completion of the process of computerization of the billing and accounting systems for the KUKL branches in the Kathmandu Valley.
Project Rationale and Linkage to Country/Regional Strategy
Impact Improve health and well-being of Kathmandu Valley urban residents, in particular the poor.
Project Outcome
Description of Outcome Implemented water sector institutional reforms to ensure a professional and commercially driven operational environment on a sustainable basis.
Progress Toward Outcome Following the restructuring of the project approved by ADB Board in February 2008, the outcome target is rescheduled to 2014.
Implementation Progress
Description of Project Outputs

1. Recruitment of the CBP Team as an alternative to management contractor. (Core Team - international 132 person-months; Other Advisors - international, 52 person-months; and national, 388 person-months)

2. Implementation assistance through provision of consulting services and civil society/NGO monitoring.

3. Computerized billing and accounting system

Status of Implementation Progress (Outputs, Activities, and Issues)

1.1 Kathmandu Upatyaka Khanepani Limited (KUKL) recruited capacity building and public-private partnership support team (CBP team) in November 2010. The CBP team completed its work on June 2014. CBP team supported KUKL to plan and implement, among other things, the following:

(i) Business plan of KUKL; (ii) Non-Revenue Water (NRW) management and Asset management plan; (ii) Revenue improvement plan; (iv) Water connection policy; (v) Rationalization of tariffs; (vi) Trainings and capacity building; (vii) Institutional restructuring; and (viii) Financial management. KUKL staff shall be assigned the responsibilities of the works, including implementation of the reports, that were prepared by the CBP team.

1.2 The Business plan and the new water connection policy were approved in 2012 and are currently being implemented by KUKL. Project Implementation Directorate (PID) is preparing procurement packages for the refurbishment of water treatment plants, and operationalization of asset management plan. The Revenue Improvement Plan has been finalized and will soon be implemented.

1.3 KUKL submitted to Water Supply Tariff Fixation Commission (WSTFC) a new proposal for increase in tariff, which was approved by WSTFC on 14 July 2013 with conditions to be fulfilled by KUKL for service improvement. This will help KUKL in improving its operations and service delivery to citizens.

1.4 KUKL, with support from PID, WSTFC, Kathmandu Valley Water Supply Management Board (KVWSMB), Ministry of Urban Development (MoUD) and Ministry of Finance (MoF), is implementing a comprehensive action plan for operational and financial improvement. This action plan is expected to address much needed institutional reforms, capacity building, and improvements on financial, human resources, and operations management of KUKL.

2. KVWSMB has prepared a draft groundwater management and regulation policy, which was approved by Ministry of Physical Planning and Works and National Planning Commission. The policy has been approved by the Cabinet legislative subcommittee. MoUD is working to operationalize the policy.

3. The contract of computerized billing and accounting system was awarded and the service provider was mobilized in January 2011, however, the progress has not been satisfactory due to contractual problems between the contractor and KUKL. Efforts are being made to resolve the problems and complete this important activity. Loan 2059 is closing by December 2014 and it would not be possible to finance this contract using the loan funds after the loan closing date.

Geographical Location Kathmandu Valley
Safeguard Categories
Environment C
Involuntary Resettlement
Indigenous Peoples
Summary of Environmental and Social Aspects
Environmental Aspects There are no adverse impacts anticipated for the Project. The Project is being carried out in accordance with the relevant environmental rules and regulations, and policies of the Government and ADB.
Involuntary Resettlement There are no adverse impact anticipated in terms of Government's and ADB's relevant Policies on Involuntary Resettlement.
Indigenous Peoples There are no adverse impact anticipated in terms of Government's and ADB's relevant Policies on Indigenous People.
Stakeholder Communication, Participation, and Consultation
During Project Design The Project was designed with extensive participation of stakeholders, including beneficiaries, affected people, ward representatives, district development committees, municipal officials and representatives, ministries concerned, Melamchi Water Supply Development Board, the private sector, external funding agencies, NGOs, and consultants.
During Project Implementation The Project is encouraging direct participation through representation of Kathmandu Valley beneficiaries. The Project is also undertaking consensus building at all levels on issues such as water services, tariffs, reduction of nonrevenue water (NRW), environmental and social mitigation and compensation, and employment.
Business Opportunities
Consulting Services Consultants were selected and engaged in accordance with ADB's Guidelines on the Use of Consultants. The recruitment generally followed ADB's quality-and-cost-based (QCBS) selection method.
Procurement Procurement of all goods and services was undertaken in accordance with ADB's Guidelines for Procurement.
Responsible ADB Officer Manoj Sharma
Responsible ADB Department South Asia Department
Responsible ADB Division Urban Development and Water Division, SARD
Executing Agencies
Ministry of Physical Infrastructure and TransportMr. U. K. JhaCPMO@DWSS.MOS.COM.NPSingha Durbar
Kathmandu
Nepal
Timetable
Concept Clearance 02 Mar 2002
Fact Finding 04 Aug 2003 to 19 Aug 2003
MRM 12 Sep 2003
Approval 18 Dec 2003
Last Review Mission -
PDS Creation Date 12 Feb 2007
Last PDS Update 03 Oct 2014

Loan 2058-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
18 Dec 2003 08 Apr 2004 07 Dec 2004 31 Dec 2005 31 Mar 2009 31 Mar 2009
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 5.00 Cumulative Contract Awards
ADB 5.00 18 Dec 2003 5.07 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 18 Dec 2003 5.07 0.00 100%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory - - - - Satisfactory

Loan 2059-NEP

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
18 Dec 2003 08 Apr 2004 07 Dec 2004 30 Jun 2011 31 Dec 2014 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 10.00 Cumulative Contract Awards
ADB 10.00 18 Dec 2003 3.75 0.00 93%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 18 Dec 2003 3.30 0.00 82%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating Satisfactory - - - - Satisfactory

Safeguard Documents

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