Nepal: Melamchi Water Supply Project

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

The project''s development outcome of alleviating the shortage of potable water in Kathmandu Valley is substantially delayed due to contract termination for a second time with the main headworks and tunnel package contractor (1st termination was in September 2012; and 2nd termination was in February 2019). According to the revised project completion schedule the development outcome can be achieved by end of December 2020. For subproject 1, about 80% of overall physical works have been completed. Tunnel excavation of 27.7 km has been completed. Other remaining works inside the tunnel are about 1 km of invert lining, installation of final support, drilling of 3 ventilation shafts, installation of hydromechanical gates and installation of a remote mentoring system. About 85% of headworks component is remaining to be constructed. 170 million liters of water per day from the Melamchi River can be diverted through the tunnel through an alternative diversion system prior to completion of headworks. MWSDB and ADB agreed on a revised procurement plan to complete the remaining works with multiple NCB, direct contracting and shopping packages, which was endorsed by Melamchi Board and approved by Cabinet.

As per the revised procurement plan, invitation for bids was published on 31 May 2019 for two large packages: (i) Tunnel package; and (ii) Headworks package. The bids evaluations are ongoing, and contracts are expected to be awarded by end August/early September for both packages. In parallel, contracts for small packages such as vent shaft construction and Riberma river protection works are awarded through direct contracting and shopping respectively as per revised procurement plan, and these works are ongoing.

Under subproject-2, the following have been completed: (i) Distribution network improvements in Kusunti and Kalopool, (ii) 9.5 km transmission mains (1400 mm diameter from Sundarijal WTP to ring road), (iii) surface water intake at Nakhu, (iv) cluster removal works at Gokarna, (iv) tubewell construction, and (v) sewer network improvement work (Budhanagar-Sankhamul). Works were substantially completed by 2017 and all contracts are in the process of being closed. Subsequent projects financed by the ADB have scaled up investments in DMAs and transmission mains supplying 10 reservoirs around the valley by gravity).

A. Melamchi Valley (Suproject 1)

A.1. Raw water diverted from Melamchi Valley to Kathmandu Valley by development of infrastructure, i.e. tunnel, road and water treatment plant.

A.2. Social and Environmental Support provided in Melamchi Valley.

A.3. Efficient project management established and capacity building attained

B. Kathmandu Valley Subproject (Subproject 2)

B.1. Institutional reforms achieved and efficiently operated

B.2. Water distribution and wastewater system improved by provision of capital works

B.3. Social and environmental support provided in Kathmandu Valley

A. Melamchi Valley (Subproject 1)

A1. The output has been delayed due to contract terminations and the 2015 earthquake. The following tunnel excavation has been completed so far: (i) main water diversion tunnel, 26 km, (ii) adit tunnels, 1.5 km, and (iii) headworks diversion tunnel, 0.2 km. The remaining works for tunnel and headworks is planned to be completed at the earliest possible time through multiple packages, and revised procurement plan was prepared accordingly. Procurement of works are being done as per the revised procurement plan which was approved by Cabinet in May 2019. All contracts are expected to be completed by end of August/early September 2019.

Access roads were constructed and maintained. Upgrading construction works in UAR 02 (Lamidanda-Melamchi Pul Bazar) were earlier disturbed due to concerns of some local residents. Now, the works of UAR 02 have been completed. Also, construction of 18-km main access road was completed and opened up between Melamchi Pul Bazar and Timbu. 85 MLD water treatment plant has been completed with JICA financing. ADB financed water treatment plant of 85 MLD is nearing completion (financing under Loan 3255-NEP).

A.2. Resettlement Plans and Environmental Management Plan (EMP) were prepared and are under implementation for both Subproject 1 and 2 following the split into two distinct subprojects in 2009. Activities undertaken in Subproject 1 (in Melamchi valley) include several activities for social and economic development of the areas in the Melamchi Valley such as (i) construction of health centers and provision of essential drugs; (ii) construction of school buildings and provision of educational kits to schools; and (iii) a forest nursery in Timbu. The social uplift program (SUP) under the MWSP is being implemented to promote widespread, ongoing, and meaningful participation of key stakeholders. Compliance with Resettlement Plan and Environmental Management Plan (EMP) is monitored by the MWSDB with support from the design and supervision consultant (DSC). Further, services of a Safeguards and Social Development Support consultant (SSDS) have also been taken for monitoring and SUP implementation. MWSDB has been specifically asked to ensure compliance with effluent discharge standards.

A.3 MWSDB is the main agency for project management of Melamchi Subproject 1 (Melamchi tunnel construction). The project management consultant contract has been closed. MWSDB is supported by new design and supervision consultant (DSC). Strong coordination and interface management between contractors will be critical for the successful project completion. Semi-annual safeguard monitoring reports are regularly being submitted and disclosed.

For Subproject 2, a Project Implementation Directorate (PID) has been established since 2009 which has been carrying out the activities of Subproject 2. Subproject 2 is expected to be closed in 2019.

B. Kathmandu Valley Subproject (Subproject 2)

For Subproject 2, a Project Implementation Directorate (PID) has been established since 2009 which has been carrying out the activities of Subproject 2. Subproject 2 is expected to be closed in 2019.

B.1. Ongoing. KUKL has recruited capacity building and public-private partnership (CBP) team in November 2010. With support from this team, KUKL is working to achieving the targets of lease and license agreements. KUKL submitted to 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.

B.2. Under Subproject 2, distribution network improvement works are expected to reduce water losses, improve service delivery by enhanced hours and higher pressure of water supply for consumers. The PID for Subproject 2 has awarded 47 contracts out of which 31 contracts have been completed and 16 contracts are ongoing. There are no major issues with implementation of this Subproject. Most of the contracts were completed in 2013 and the remaining contracts were completed by mid 2017 and some are still in the process of being financially closed. The distribution network improvement works in Kathmandu Valley are being carried out with the objectives of reduction of non-revenue water and improvement of service delivery to the citizens.

B.3. Substantial improvement in water supply is expected after completion of Melamchi headworks and tunnel scheme. Safeguards unit has been fully staffed with social development officer, environmental officer, and legal officer. Now, this unit is supervising compliance with safeguards of ongoing physical works with support of supervision consultant.

Resettlement Plan and Environment Management Plan (EMP) have been prepared and are being implemented. Social Uplift Programs in Melamchi Valley are also under implementation. Several teams of consultants have been recruited in accordance with staggered schedules. Semiannual safeguard monitoring reports are regularly being submitted and disclosed.