Wednesday, November 07, 2007

ADB loan renewal for Melamchi not before January

By: Razen Manandhar
Kathmandu, November 14[2007]
The loan renewal with Asian Development Bank (ADB) for the Melamchi Water Supply Project (MWSP) will be postponed till January 2008 due to a delay in the handing over of Nepal Water Supply Corporation to a semi-private body and other changes in the project infrastructure.

The ADB was supposed to renew the loan agreement for S120 million this month with the Nepal government for the construction of 26.5 Km tunnel in the Melamchi valley.
An ADB mission, which studied the project's progress in the Kathmandu and in the field for the past six days, presented a report to the project. The report said the renewal of the agreement will not be possible before January. The Melamchi's agenda was supposed to be presented to ADB board meeting on November 22. "The mission, in short, told us that the renewal of the loan agreement will be held only in January," said Purna Das Shrestha, deputy executive director of Melamchi Water Supply Development Board. He said that the project was moving forward with temporary extension which has been taking place in every three months. "Now, we cannot approve tender bids for the construction of the tunnel. However, we have been continuing the process for calling the tender," he said adding that as it is a big-scale construction, the bidder do not want to make bids before the loan approval.
He said that a delay in handing over the assets and liabilities of NWSC to the semi-private company—Kathmandu Upatyaka Khanepani Limited (KUKL)—could be the major reason for the delay in the loan agreement. "Due to some changes in KUKL and as NWSC also had some problems to complete its duties, the handover problems to complete its duties, the handover was delayed, which ultimately affected the process of loan renewal," he said.
The ADB had agreed for the loan in December 2000, which will be used mainly in the construction of the tunnel.

Source: The Himalayan Times, November 7, 2007