The Kathmandu Valley is the most important urban concentration of Nepal enjoying basic amenities like transportation, electricity, telecommunication, roads, water supply, sanitation, security and education. Nepal has been experiencing rapid urbanization. However meeting an international urban standard has become a growing concern. Even though there is rapid urbanization in recent years, Nepal still remains the least urbanized amongst its South Asian counterparts. The speed of urbanization, nevertheless, has put tremendous pressure on the limited resources. Urbanization in Nepal faces numerous challenges including the issues related to lack of health and sanitation, lack of scientific solid waste management, electricity outage, inadequate infrastructure and deteriorating law and order situation. The other major challenge is urban poverty.  The insurgency period led to the highest increase in urban poverty, when people from rural areas started migrating to Kathmandu to secure their lives and property.

The sanitation issue in the valley ranges from unsafe drinking water to insufficient public toilets. Much of the waste water system is in poor condition and has exceeded normal working life. The main reasons for the decline in access to drinking water are increase in urban population, lack of expansion of piped network and loss due to old pipes. The valley emits about 1,000 tons per day of solid waste of which only 900 tons are collected. The urban attitude of throw and forget is a major challenge, and there is no law or policy to penalize such attitudes or the existing legal provisions are not implemented. New houses have been built in Kathmandu without proper planning, which is due to limited intervention of public sector.

However the construction and maintenance of roads remain a major challenge.  Due to narrow and unplanned roads, there are frequent traffic jams. Public transportation is not very reliable and considered unsafe which has added to the congestion. The Kathmandu Valley Road Improvement Project is widening the current lanes. The constructions of these roads are likely to take longer than anticipated, leading to inconvenience for pedestrians.  Urban Governance has been greatly affected due to major   earthquakes of April and May 2015. The Melamchi Water Supply Project would improve Urban Governance through the adequate supply of drinking water in the valley.