Asian Development Bank (ADB) has said that government's inability to award management contract for Kathmandu Valley's water supply has landed the future of the Nepal's mammoth Melamchi project in uncertainty.Issuing a press statement on Tuesday, ADB said it regretted over the fresh wave of uncertainty surrounding the Melamchi Drinking Water Project (MDWP).
ADB’s statement comes a day after the UK firm Severn Trent Water International (STWI) announced withdrawal of its bid following failure of the government to award management contract for Kathmandu valley’s water supply.
The STWI announced withdrawal of its bid on Monday, six days after the expiry of its ninth and final deadline to the government for award of the contract which was stalled by Minister for Physical Planning and Works Hisila Yami.
"The inability of the government to authorize the signing of the duly negotiated management contract at this very late stage creates considerable uncertainty on the way forward. As it stands now, it would not be possible to carry on with project activities, with the project due to close on June 30, 2007," the ADB release said, adding, "In such difficult circumstances, it is now for the government to decide how it wishes to proceed."
ADB is the largest donor to Melamchi project. Apart from its initial commitment of $120 million, the bank had committed an additional $45 million to Melamchi project in March this year when the project was scaled down from $464 million to $350 million owing to fund crunch.
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