AA 27km long water supply tunnel in Nepal, part of the $441M Melarnchi dam scheme has received the green light from aid donors.
There had been concern that the tunnel would be scrapped but this section of the scheme was saved after the Asian Development Bank (ADB) agreed to increase its financial commitment from $100M to $120M following a reappraisal of the tunnel.
This was confirmed by ADB’s Nepal representative Richard Vokes who said the bank’s board will meet in December to formally approve the move.
The tunnel will run from the dam on the Melarnchi river to Kathmandu, securing water supplies to residents in Nepal’s capital city.
However the Nepal government has agreed to comply with a decision by aid donors as a condition of financing that the management and upgrading of Kathmandu’s water supply network be contracted out to a private operator.
No details of this proposed privatisation have been released.
Under the terms of the revised aid package other project financiers, apart from the ADB, are the World Bank which is providing $80M, Japan Bank for International Cooperation with $52M, Norad (a Norwegian aid group) with $29M, Swedish International Development Agency $25M, the Organisation of Petroleum Exporting Countries $14M and the Nordic Development Fund with $11M. The Nepal government is also providing $110M.
