After much debate and delay, the Asian Development Bank is finally getting ready to approve the Melamchi Project at its board meeting in December. But, even if all goes according to plan, Kathmandu will have to wait another six years for the first drop of melted snow to arrive at Sundarijal. What do we do till then?

Kathmandu is running out of water, but this is due more to mismanagement and under-utilisation of existing sup-plies than a real shortage. Upgrading ex-isting capacity and expanding antiquated water mains would be adequate for now. But at the rate Kathmandu is growing, the Valley will need extra water from outside. The Asian Development Bank is to give the final green light for the $450 million project next month. But it will take at least six years for the first drop of water to reach Kathmandu.

The best way to understand Kathmandu Valley's limits to growth is to regard it not as a valley at all, but as a plateau. We should be calling it the Kathmandu Plateau. The terrain on all sides, including the north, plunges to only 800 m above sea level before rising again. This leaves Nepal's capital high and dry, dependent only on the rainfall that is trapped by the hills on its rim. There are no snow-fed rivers running through, and with the population now nearing 1.5 million, the valley's only river has turned into a sewer. Water shortages have become a year-round phenomenon, not just something that happened in the dry season.

As taps run dry, the cry for water has become louder and louder. Politicians can't ignore it anymore, so they respond with a one-word mantra: "Melamchi". Over the years, the river flowing below this picturesque little village on the boundary of the Langtang National Park, 30 km directly north of Kathmandu, has turned into a panacea for parched Kathmandu. The debate about whether or not some $500 million should be lavished on an over-pampered capital is not heard anymore, no one really asks the scientists what they think, and no one questions the unquestionable-wouldn't it be better to just start moving the capital somewhere else, or at least have a systematic plan to relocate key offices and industries?

Politics and populism take over, and the debate is so mired in slogans that any Nepali hydrologist who says that Kathmandu has enough water, that there is really no shortage, is regarded as a crank. Question Melamchi, and you are anti-development. Kathmandu needs about 150 million litres of water a day. Out of this, Nepal Water Supply Corporation, a public sector undertaking entrusted with the task of quenching the capital's thirst and taking care of its sewer system on a monopoly basis, claims that it supplies about 80 million litres a day. Out of that 40 percent is lost in leakage. That means a daily shortfall of about 90 million litres.

With an annual precipitation of 3,000-3,600 mm, there is enough rainfall on the valley rim to fulfil Kathmandu Valley's current and future demand. The trouble is, most of this rain falls during the monsoon and all that needs to be done is to store it properly. Present storage capacity is woefully inadequate to meet rising demand, and even if it were, some of the water mains supplying the city were laid nearly 100 years ago and cannot carry enough water to the network. Add to this the leakage along the way, the wastage and pilferage, and it is not surprising that there is a shortage. "Simply cutting wastage and pilferage by 50 percent would alone mean increasing supply by 15 percent," one water expert told us. He requested anonymity because, working

for the government, he doesn't want to be punished for his views.

So Kathmandu's hapless citizens have been forced to bore for water. And they have to drill deeper and deeper as the water table falls because of over-extraction. One estimate says Kath-mandu's average water table has been falling by an average of 1.8 metres a year. Large hotels and soft-drink makers have drilled deep for geological water-and it is all a gift from nature, since there is no government policy to price extraction of this precious commodity. As Kathmandu's population grows exponentially, storage of water inside the valley alone will not meet demand, and there will have to be an outside source. The ADB says it has studied other inter-basin transfer possibilities for Kathmandu Valley, but Melamchi is the only feasible one.

Critics of Melamchi say that not enough has been done to upgrade the existing water collection intakes, the capacity of the reservoirs on the valley rim and expanding the diameter of the trunk lines feeding the three main towns. If this is done, there is enough water within the valley to take care of demand for another ten years, they say. Differential pricing could ensure that intensive users like five-star hotels and industries will be more frugal with water that is subsidised for the citizens.

The Melamchi project ran into another problem that nearly derailed it. For once, it had nothing to do with the politicians in Kathmandu but with donor politics. Melamchi has always been a darling of the Japanese, who have worked closely with the ADB to push the project through. Norway had also been involved, and had preferred the option in which the tunnel bringing the water would generate 25 MW of electricity from a power

house at Sundarijal. The Japanese, with the ADB, were sharply opposed to this, and insiders in the Melamchi project say the bank's mission gave "flimsy reasons" for being against the power generation. The ADB conducted a study last year and said the cost implications of a longer tunnel and a higher intake to justify power generation was not cost-effective. In the end, probably because of the uncertainty, no private sector investor was willing to invest in the hydropower portion and Melamchi became a stand-alone water supply project.

The ADB is the lead agency and the biggest lender to the project, which is supported by a consortium of donors that includes the Norwegian aid agency, NORAD; the Swedish agency, SIDA; the Nordic Development Fund (NDF); the Japanese Bank for International Cooperation (JBIC); the World Bank and the OPEC Fund.

The ADB's final mission was in Kathmandu from 18 September-4 October to appraise the project and prepare a report for the ADB board to discuss. The ADB loan amounts to $120 million, and it will be upon the endorsement of this that other donors are expected to get their approval processes underway.

The base cost of the project as it stands today is $338 million. But infrastructure projects are notorious for cost over-runs and after including financing, interest payments, taxes and contingencies for complications in the tunnel drilling activity, the total cost comes to $441 million. The government is putting up 25 percent of the financing, most of which will be cost for land taxes, duties and interest during construction.

The current design will entail the construction of a low weir and de-sanding basin on the Melamchi Khola just above its confluence with Ribarma Khola at an altitude of about 1,500 m. About 170 million litres a day of water will be diverted through a 26.5 km long tunnel to bring the water to a treatment plant to be built at Mahankal near Sundarijal. The tunnel will have a cross section of 10 sq metres and will be a major feat of engineering. Although the new tunnel alignment is shorter, geologists involved with the project say it will involve boring through unstable rock and the tunnel may actually be more difficult to construct.

The project also has "downstream" components of treatment and distribution once the water arrives in Kathmandu Valley. The existing distribution system will be overhauled to ensure reliable and adequate supply. A private operator will be hired by 2001 to improve operation, management and

rehabilitation of Kathmandu's existing urban water supply and sewerage facilities. One way is to ensure people pay for water they use and improve the efficiency of the system.

Supporters of the project say that although expensive, Kathmandu Valley residents will be paying for reliable water supply just like they pay for electricity. Water tariffs in Kathmandu could increase to Rs 23 per cubic metre when Melamchi water is piped to homes and neighbourhoods. At present, water is sold at a subsidised rate of Rs 8 per cubic metre, even though the costs involved in supplying it is Rs 16 per cubic metre. Says the ADB's Nepal representative Richard Vokes: "Melamchi is a least-cost option, and private management has been brought in to ensure people pay for water. Tariffs have to be significant to ensure cost recovery, otherwise it will be difficult to justify subsidies for a rich valley population."

What will remain to be seen is if just charging money will make Kathmandu's water supply dependable and regular and of acceptable quality. The argument is that if it is expensive, people will not waste; this would hold water if Kathmandu citizens showed the same frugality about using expensive electricity, or if electricity pilferage was cut. Says Vokes: "To bring water to Kathmandu, water has to be conserved and treated as a precious resource." For a final approval by the ADB board, the government will have to commit to the following conditionalities:

. Implementation of a Kathmandu valley water and wastewater strategy

. Policy on groundwater extraction, licensing and monitoring

. Formulation of a Kathmandu valley development

plan-including relocating more water-consuming industries

. Establishment of an autonomous Kathmandu valley water authority (KVWA) by 2002 for water resource management

. Establishment of a regulatory body to control tariff adjustments, monitor performance of water operators and protect consumer interests.

. A clearly defined tariff policy has to be prepared before the loan approval.

The Melamchi headworks are close to the Langtang National Park, and its access tunnels are located within the Shivapuri Watershed and Nature Reserve. ADB says it has mitigation plans to address the negative environmental impact of the tunnels and the social effects of the influx of thousands of construction workers from outside. The plan is to ensure that a minimum water supply level will be maintained in the Melamchi for downstream irrigation, water supply, water mill operation and for maintaining the habitat of aquatic life. A social uplift programme is also planned for 14 village development committees (VDCs) in the Melamchi valley, for which the project has allocated $5 million. The plan is to ensure that a certain percentage of the water tariff paid by the people of Kathmandu will be made available to the 14 VDCs. ADB has also prepared a resettlement policy, for people displaced by the tunnel, which is awaiting government approval. The Melamchi Board is so conscious of its image and wary of negative press that they are in the process of hiring a public relations consultant.

Critics of the Melamchi project, and there are still some in the woodwork, admit that the plan for resettlement and the plough-back of part of the tariffs to the Melamchi villagers looks good on paper, but doubt whether future governments will keep that promise. "Nepal is full of development refugees who have suffered because the government didn't keep its word," says one activist. Besides, what are the people of Kathmandu going to do till 2006? Some of the immediately do-able activities like improving the storage capacity and upgrading the mains should have been incorporated right away, they say.