Major Mile stones on Development Pathways of Melamchi Project


For the first time water transfer from Melamchi river was identified as a possible agenda to meet the growing water demands of Kathmandu Valley.


Few Studies were carried out on Melamchi water transfer scheme, as one of few alternate options to resolve growing water needs of Kathmandu city. Water transfer with hydropower plant (higher dam) scheme was discussed by development partners in Nepal UNDP, ADB, and WB. No consensus reached on exact modality of its construction till late 1990s. To install hydropower plan in upstream of Melamchi or not was a long -held debate attached with this Melamchi water transfer project in early 1990.


Govt. of Nepal started feasibility study for a project with transferring of water from the upstream located Melamchi River to Kathmandu city, keeping open also for other alternate options for supplying water in the city


Prime Minister of Nepal then, late K P Bhattarai, announced in a public forum that water from Melamchi Project (River) will be brought to meet the drinking water needs of Kathmandu city.


Australian based Consulting Company did feasibility study of Melamchi water transfer project.


Melamchi water supply ltd a public company, was established by Govt. of Nepal to manage water supply systems in Kathmandu city


Melamchi Development Committee was established by Govt. of Nepal to secure funding and manage the water transfer scheme between Melamchi river and Kathmandu.


ADB-led consortium secures full funding of the project and approved by the government of Nepal to initiate the project with creation of Melamchi Water Transfer Project (MWTP), with a target of completion of the project by 2007.

In early


Privatization of city water system attached as a precondition for financing becomes source of contention among government agencies, NGOs, civil societies, and external donors (WB, ADB, and other partners). Full privatization is regarded as difficult by the government.


Withdrawal of World Bank (due to failure to appoint a foreign private operator to manage water supply).


Withdrawal of funding to the Melamchi project by Norwegian Agency for International Cooperation (NORAD) and Swedish International Development Cooperation Agency (SIDA) due to failure to appoint a foreign private operator to manage water supply.


Kathmandu Upatyaka Khanepani Limited (KUKL) is established PPP to manage city water supply system (under precondition for full of financing).


Restructuring of project cost done. The project cost estimates reduced to 317 million US$ from 464 million US$.


Tunnel construction contract awarded to China Railway 15 Bureau Group Corporation (CR15G) on 19 February 2009 for 4.5 years under contract of US$ 66 million. Local groups padlock project office, which was then unlocked in January 2010.


MWSDB terminates the contract with CR15G on 25 September 2012. Physical progress (i.e. tunnel excavation) is only 22% (6.3 km out of 27.5 km).


New contract awarded to an Italic company, Cooperativa Muratorie Cementisti (CMC) di Ravenna, in July 2013 with contract of 98.7 million US$, resulting in an estimated cost overrun of 32.7 million US$.


Cost again re-estimated to 355 million US$ with additional financing committed by ADB.


Earthquake of 8 rector scale pushes back work to 2020.


City water pipe replacement work starts replacement/rehabilitation (some pipe lines are more than 50 years old).


Second extension was given in summer of 2016 for completion data for the project, which is then pushed back to June of 2020.


Italian Company (CMS) filed a case at International Arbitration Court for variation order of the Melamchi Water Project (specially tunnel construction work)


A major break through on the project as construction of 26 km tunnel was completed, and remaining of only limning and finishing task of the tunnel.


On 16 December 2018, the CMS company officials submitted a letter to Melamchi Project and the government about its decision to discontinue with the Melamchi water project, due to liquidity problems in its parent company in Italy, and with lack of fund for day-to-day work at the project site. The project status is in limbo again at the end of 2018, until a new negotiation takes place between the CMS and the Melamchi project authority in early 2019.

June 2020

Expected date of completion (as of Aug 2016).