Nepal: Melamchi Water Supply Project

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

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)

A.1 MWSDB terminated the previous contract for the Melamchi tunnel on 26 September 2012 due to unsatisfactory performance of the then contractor. As of the date of termination, the physical progress (tunnel excavation) was 22% (6.3 km out of 27.5 km. Rebidding for the Melamchi tunnel Contract started in November 2012. MWSDB issued the letter of acceptance to the winning contractor on 21 June 2013, the contract was signed with Cooperativa Muratorie Cementisti di Ravenna (CMC) of Italy on 15 July 2013, and the letter to commence was issued on 1 October 2013. The initial progress of the new contractor of the Melamchi tunnel is encouraging in terms of mobilization of key personnel, equipment, machinery, materials and start-up activities. Advance payment was made to the contractor in October 2013 and steady progress was achieved until the progress was adversely affected by 25 April 2015 Earthquake and short of construction materials and fuel due to closure of southern Border. However, completion of tunnel excavation with cumulative total of 27,576m tunnel length has been achieved as of 12 April 2018. After several backstopping and monitoring from employer and ADB regarding cash flow problem of contractor, the final works on tunnel smoothed and as of 15 September 2018, 13.7 km invert lining is finished with 12.1 km remaining. Works at H/W with alternative diversion pipe and temporary diversion weir as well as vent shaft works are ongoing. It is expected to be completed by 1st quarter of 2018.

The water Treatment Plant (WTP) to utilize water from Melamchi tunnel has been implemented with JICA funding. MWSDB and the contractor signed the WTP contract on 10 July 2013. WTP is 100% completed and tested.

Upgrading construction works in UAR 02 were earlier disturbed due to concerns of some local residents. Now, the works of UAR 02 have been completed.

Construction of 18-km main access road was completed and opened up between Melamchi Pul Bazar and Timbu.

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 at a second level. 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). Inputs of project management consultant finished. MWSDB is supported by new design and supervision consultant (DSC). Improved coordination and communication among MWSDB, new DSC, the new contractor (CMC), and the safeguards and social development support consultant (SSDS) noted. All the parties are coordinating to improve the pace, quality, safety, and safeguards compliance of the works. The DSC is taking more proactive role and is actively supporting MWSDB to (i) ensure implementation of the agreed action plans, (ii) decide expeditiously the contractual matters such as claims, variations, etc., (iii) ensure coordination with DSC, contractor, local residents, army and other relevant government authorities, and (iv) monitor processing payments to the contractor in a timely manner. Semi-annual safeguard monitoring reports are regularly being submitted and disclosed.

B. Kathmandu Valley Subproject (Subproject 2)

B.1. For Subproject 2, a Project Implementation Directorate (PID-KUKL) has been established since 2009 with staffing from Department of Water Supply & Sanitation and KUKL, which has been carrying out the activities of Subproject 2.

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 39 contracts have been completed and 8 contracts are about to complete. There are no major issues with implementation of this Subproject. Most of the contracts were completed in 2013 and the remaining contracts by are expected to be completed by end of 2018. Advance preparation of designs and bidding documents for the "Kathmandu Valley Water Supply Improvement, Project," (L2776-NEP) enhanced the readiness of the project. 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 the Melamchi tunnel by 2016. Safeguards unit has been fully staffed with social development officer, environmental officer, and legal officer. 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. Several teams of consultants have been recruited in accordance with staggered schedules. Semiannual safeguard monitoring reports and environmental report are regularly being submitted and disclosed.