Dawa Sherpa and his friends relax by the rushing rapids of the Melamchi after a hard day's work in the fields. The vegetation is lush, the air is clean and cool, and they watch the frothing water tumble over huge boulders as it flows down from the mountains.
Nearby, Shyam Nepali and his dalit friends also take a break from weeding the paddy terraces, pausing to exchange cold stares with the Sherpas. Last month, the dalits picked a fight with the Sherpas for calling them "untouchable" and preventing the dalits from entering their homes. The compromise was a Catch 22. "Eat beef, and we'll even let you dine in our kitchen," the Sherpas told the dalits. Tension simmers. But there is one thing the Sherpas and dalits agree on: their deep resentment of the Melamchi Water Supply Project (MWSP).
The $441 million project supported with a loan from the Asian Development Bank, and aided by the Norwegian, Swedish and Japanese governments will take water from the Melamchi Khola through a 26.5km tunnel to Sundarijal. The project was originally slated for completion in 2006, but is now hopelessly delayed. When, and if, it is completed, Kathmandu Valley will get about 170 million litres of water every day.
Before that happens, the project has to hand over water distribution and supply in the Valley on a management contract to make the scheme viable. The government also agreed to relocate polluting industries from Kathmandu, illegal tapping of ground water and set up an independent water regulatory agency. All of these prerequisites have been delayed by three years. Project staff blame political uncertainty in Kathmandu and Maoist activities in Melamchi.
But it is here in Melamchi itself that a visitor sees major obstacles ahead. About the only item of good news here is that a 5km dirt road from Melamchi Bazar to Timbubesi and eight bridges have been completed. The contractors in charge of road and bridge construction have earned a bad reputation with local communities. Contractors say they have been harassed and extorted by Maoists. Lately, the project has handed over road construction to the military, and since then there has been even less progress on the road because of security concerns.
Four years ago, a group of consultants and staff from MWSP came from Kathmandu to try and convince Melamchi villagers that the project would benefit them, not just the pampered residents of Kathmandu. They were promised jobs, electricity, health clinics and training programs. "We were really stupid to believe them," rues Dawa Sherpa. "All these years have gone by and we never saw those people again." He has reason to be bitter. Dawa offered free food and stay for an engineer and even lent him Rs 150,000 for workers' wages. It took him seven months in Kathmandu before he got the money back. "They should never make the mistake of coming back to my village," fumes Dawa. 
Voices of resentment can be heard right from the bus top at Melamchi to the villages in the hills of Helambu. "I'm beginning to worry about the project, because these people from Kathmandu have not paid any attention to local concerns. There will be a public outburst soon," predicts Dinesh Lama, ward chairman of Helambu 8. "What's in it for us?" is a commonly heard question. Every villager is convinced the project is for Kathmandu, and their water is being stolen. Saila Tamang, a local hotelier, attempts a little perspective: "I'm sure they have limitations, but they can at least start by giving jobs to some people."
Locals say there are qualified builders in Melamchi, but all contracts went directly to Valley-based companies. Contrary to earlier promises, it seems the project has deliberately kept locals out, not hiring them even as labourers. "They were trying to get away really cheap, paying Rs 100 per day," says Shyam Nepali. "We maybe poor but we're not that desperate."
After enormous pressure from local activists, the project has pledged jobs for three people from each VDC, an empty gesture considering Helambu alone has 5,000 households. "That was really ridiculous. What were they up to?" asks local politician Krishna Lamichhane from Gyalthum. So far, only two people from Sindhupalchok
have got jobs as road supervisors, he says.
The other complaint is compensation for the displaced. At least 20 families have lost their fields to road access, and most of them don't know how, where or when they can get compensated. "The project people don't even care to come here and see if anyone is missing from the compensation list," says Lamichhane.
Chandra Bahadur Karki is among those who lost his farm. Project staff told him he was not eligible for compensation because his name was not noted prior to the construction of the road. Several houses at Dhungri Bazar damaged by project bulldozers are still waiting for reimbursement.
The Melamchi project has a 'social upliftment program' in about 14 VDCs in the valley and $6.2 million was allocated for health, education, income generation, electrification with local community participation. Jagat Basnet of the local group, Community Self Reliance Centre, told us, "There is no local participation at all. A lot of villagers don't even know that the program exists." Basnet does say the project distributed mosquito nets and condoms as part of its health improvement program.
In Kiul village, an hour's walk from Melamchi Bazar, Ram Krishna Sapkota and his friends worry about the future. "We have plenty of clean water and fresh air, I don't think my grandchildren will have it," says Sapkota, fearing the diversion of water will adversely affect the environment. Sixty-year-old Baburam Chettri nods: "We hope this project never gets off the ground. Let them finish the road and go away."
Almost everyone else is either ignorant or indifferent. At the Melamchi Diversion Scheme Office here, there is no consultant or engineer. "There's no work at the moment. So, it is not necessary for them to be here," says a peon, the unofficial spokesperson. The locals say a public relations consultant hired to smooth things between the community and the project spends all his time in Kathmandu instead.
"Most of the local people become furious as soon as they see any project staff. Both try to stay out of the others way," says Raju Pandit Chettri, a member of Melamchi Local Concern Group. Chhetri has tried to find out how much water will be left in the river once the tunnel starts taking it away to Kathmandu, but says no one bothers to give him that information.
It is clear the Melamchi project has a major public relations problem here at the headworks. But it is also evident that honesty, transparency and a genuine effort to redress local grievances can address local concerns. The real challenge is to ensure that the local Maoists do not obstruct future activities. So far, the Maoists have not created many obstacles to the construction work, say the local people. "It's surprising because they never bombed or destroyed any of the bridges," says a local activist, requesting anonymity. He believes that the contractors have paid them a good deal of money on a regular basis and even given explosives to the Maoists.
Square one?
Forget the Melamchi project's crucial 28km tunnel, the initial key condition hasn't been met. At the very beginning, the donors of Nepal's biggest drinking water project had put forward a condition: they wanted a private operator at the Nepal Water Supply Corporation (NWSC). Although the World Bank took the responsibility of fixing the new management at NWSC, they had not fulfilled it when they exited the project nearly two years ago. Now the Asian Development Bank (ADB) is attempting to pick up where the World Bank left off.
A fact-finding mission from the Manila-based multilateral agency arrived in the Valley recently to finetune the Melamchi sub-project. The ADB will finance the $19 million Kathmandu Valley Water Management Support Project, which will award the NWSC management contract to a private party, restructure the corporation and form a drinking water regulatory board and the Kathmandu Valley Water Authority.
Even after the ADB finishes its work, Melamchi Water Supply Project officials believe handing over the NWSC management will take at least another year, if the bidding process ends conclusively. Two previous attempts proved inconclusive-both times only one applicant, the French company Vivendi, ended up as the final bidder.
