Loan negotiations between the Nepali government and the Asian Development Bank (ADB) concluded in Manila last week in preparation for the Melamchi Water Supply Project to appear before the ADB board in late December.

The loan document will be reviewed by Nepali government and ADB officials before distribution among the ADB board members who will make the final decision. Six other donors and lenders (see Nepali Times #14 27 October) are expected to approve their respective shares for the $441 million project once the ADB board goes ahead with its $120 million loan.

If all goes as expected, the plan is to bring water from the snow-fed Melamchi Khola to the Valley by 2006. A 26.5 km long tunnel through the mountains northeast of Kathmandu will bring 170 million litres of water daily. Before that happens, however, water supply and distribution must be privatised (by 2001), legislation passed to relocate industries that use more water and prevent illegal tapping of ground water, and an independent regulatory body set up, as demanded by the ADB loan.