Nepal has been going through interesting times, not only on the political front. One such development relates to the management of ailing public corporations, a tendency to entrust responsibility to foreigners, which began with putting the Rastriya Banijya Bank and the Nepal Bank Ltd. â€” the former is a fully state-owned bank and the latter partly-owned â€” under the care of foreign management consultants. The third in line is the Nepal Drinking Water Corporation. A British firm, Severn Trent-Water International, is reported to be virtually certain to obtain the management contract for the Kathmandu Valleyâ€™s water supply system. The existing water office will look after its jurisdiction beyond the valley. According to this model, which is to come into operation next month, the new company, Kathmandu Valley Water Ltd (KVWL), will have a composite ownership â€” the municipalities of Kathmandu, Lalitpur and Bhaktapur (50 per cent), the government (30 per cent), civil society and business community (15 per cent), and an employeesâ€™ trust (5 per cent).
The new companyâ€™s total share capital of Rs.30 million is in sharp contrast to the six-year management fee for the foreign firm at $8.5 million â€” the fact that even one yearâ€™s management fee far exceeds the total share capital sounds somewhat incongruous. The rationale for the participation of various sectors in the new companyâ€™s equity is to ensure smooth water supply and reduce leakage by 40 per cent â€” under the new system each of the Valleyâ€™s 147,000 taps is to be guaranteed at least one hourâ€™s daily water supply. Though policy formulation, capital budgeting decisions and tariff fixation will remain in Nepali hands, the question arises whether Nepalis are not capable of setting things right themselves as the problems of water supply management and their solutions are already known.
Or is it just because the government wants to acquire loans for the Melamchi drinking water project from the Asian Development Bank (ADB) that foreigners are being hired at a hefty fee to meet the loan conditionality of management reform? A similar conditionality from multinational donors had the management of the two banks transferred to foreigners. But it is not just these two banks and the water corporation that are the victims of poor management. The great majority of public corporations are similarly placed, so are the government ministries and departments. The judiciary, constitutional organs and security agencies are not free from this malaise, either. Does it mean this kind of contractual arrangement should be extended to other sectors too? The service delivery of almost all public agencies is sorely in need of reform. But it is a shame that Nepalis cannot even clean up the mess they themselves have created. While there is no denying the necessity of overhauling the valleyâ€™s water supply system, Nepalis ought to be able to think beyond the donor-driven reform projects, and set about improving things in general with a strong political will.