This is probably another late save for the blighted Melamchi Water Supply Project.

Nepal's largest infrastructure undertaking in history will probably survive this latest tussle between the government and the Asian Development Bank (ADB) simply because neither the Maoist minister Hisila Yami nor the ADB want to be the one to pull the plug.

Yami is from Kathmandu, and her constituents who are reeling from unprecedented water shortage even for drinking are not going to forgive her. The ADB has too much invested in this and too much at stake to pull back now. The challenge for both is how to do that without losing face.

The bank's statement last week announcing the planned closure of the project on 30 June began with the conditional "as it stands now'. Yami, who insists that the contract to manage Kathmandu's water supply to the British firm Severn Trent was not transparent, says she is reading between the lines.

"The bank would not have put out that kind of statement if it simply wanted to wash its hands of the project," she said, "the bank knows these are abnormal days for Nepal and would certainly reconsider its decision."

ADB officials in Manila who spoke to us on condition of anonymity say they want to send a strong message the government. "It's schooling time for them," one said, "we have waited long enough, it's time to learn to play by the rules."

And those rules are precisely what Yami has problems with. She has questioned ADB's procedure for selecting Severn Trent, which she says was flawed. The Maoist minister has dramatically toned down her rhetoric this week and made conciliatory statements about having no problem with the project or the ADB, just Severn Trent and the way it got the contract.

The alternative, she says, is a public-private partnership to manage the capital's water supply until Melamchi kicks in. The project will take five years to build and involves digging a 26 km tunnel from a mountain river north of Kathmandu.

"We aren't asking for much," Yami says, "it's just about whether the ADB accepts the initiatives we are trying to take."

The meeting on Wednesday between Maoist chairman Pushpa Kamal Dahal and ADB's country director Paul Heytens was inconclusive. But it came hot on the heels of a meeting between Dahal and Prime Minister Girija Prasad Koirala on Tuesday at which Koirala is said to have warned Dahal to sort out his minister's mess as a precondition to improved conditions at the 'PLA' cantonments.

Yami admitted that the two issues were related. "Our main concern is that the peace process should move ahead," she said, "only if that happens can we talk about construction projects like Melamchi. But you know that the peace process is heading nowhere, and neither are the elections."

Senior ADB officials are wary. "If we listen to what Yami is saying, tomorrow we will have to listen to another disgruntled minister of another party, and it would go on like that forever," said the official from Manila.

Related Article: Not a drop to drink