Kathmandu, January 23:

The Mission of Asian Development Bank, which left Kathmandu today after days of visits and consultations, has finally agreed to extend loan till 2013 for the Melamchi Water Supply Project. A decision to this effect will be made during its board meeting, which will be held in Manila on February 8.

Earlier, government and some non-governmental organisations had expressed doubts over whether the ADB will extend the loan, following the stand of the Ministry of Physical Planning and Works to prohibit Severn Trent Company, the single bidder for the position of management contractor from managing water for the Kathmandu Valley.

Minister for Physical Planning and Works Hisila Yami said today that the mission has been very positive and flexible to the ministry’s demands and proposes.

“I’m happy to say that the ADB mission has been very positive towards the current development of the project and government’s steps. It has promised to extend the loan on February 8, in the bank’s board meeting,” she said, addressing a press conference organised at the ministry.

She said that the project to bring 170 million litres of water per day from the Melamchi valley will be divided into two sub-projects and locals of the valley will be mobilised to win their cooperation for the smooth commissioning of the project.

The Manila-based bank has agreed to extend the loan for revised detail estimated cost for Melamchi Valley (Sub-project 1) and Kathmandu Valley (Sub-project 2). According to new cost estimation, $195 million will be spent on infrastructure development, which will include $96 million for tunnel and headwork, $38 million for access road construction and $61 million for the construction of a water treatment plant.

Also, $9.22 million is allocated for social and environment support programmes. This includes $6.02 million for Social upliftment Programme, while $45.6 million is allocated for Project Implementation Support.

“We have convinced the ADB mission that there will be no hike in water tariff till the constituent assembly polls. It is another victory for the Nepali government,” she said. Meantime, Minister Yami said the government has decided to drastically cut project expenses. “We have decided to move the project’s Kathmandu office to the abandoned building of Nepal Trolley Bus Service Office. The rent for the office has been a major target for criticism,” she said.

Currently, the Melamchi Water Supply Project has been using a rented building at Baneshwor, which has cost the project Rs 300,000 per month. The number of project staffers has also been reduced from 133 to 85 and two-third of them have been sent to the site office at Melamchi, she added.

She said the idea of adding hydroelectricity and irrigation components in the Melamchi project is not practical. “The idea itself is not wrong. But at the present context, we have to be more practical and do away with available resources than looking for new additions,” she said.