What are the pros and cons of the news? .................................................................................................................................................................................................................................................................................
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ADB warns of withdrawal from Melamchi

The Asian Development Bank (ADB) has warned of pulling out of multi-million-dollar Melamchi drinking water project after Minister for Works and Physical Planning Hishila Yami wrote a letter to the Kathmandu Valley Drinking Water Limited expressing the government's inability to sign management contract for valley water distribution.

According to Kantipur daily, Yami, who is a senior Maoist leader, wrote a letter stating that the government does not wish to go for management contract for the time being.

The ADB, when it agreed to provide loan assistance of $140 million to the project, had laid down the precondition that valley's water distribution management should be handed over to foreign private sector company.

The letter signed by acting Secretary at the Ministry Purna Prasad Kadariya states that the government will not provide 'letter of award' since the minister wants to take the proposal to the cabinet for reviewing the management contract.

Earlier, the cabinet had approved awarding the contract to a British company Severn Trent. As per the approval, the Severn Trent should have been handed over the management job by May 15.

On the other hand, the daily quotes sources as saying that Keichi Tamaki, an ADB official who looks after the project, has warned that failure to sign management contract would lead to revocation of the bank's assistance to the project. nepalnews.com sd May 09 07

One of the major things is it will surely burn Yami’s ass. It’s have been very easy to give direction to loot others property and kill others. It’s really tough to do real job. Just wondering how she will manage this.

What a supid person!!! Goddammit!!! Why'd she have to do that now?

Coz she thinks she will make it happen and want to be popular. But its not same as she deal with innocent Nepalese people who are convinced to join her party and who even don't know what is politics and economic development.

ASK THIS GUY who are top level responsible for Melamchi drinking water project...

Dueba.....

This need to be done before American million dollars project.

.

एक जना पूर्बाग्रही मित्र ले मेलम्ची को यो दरिद्र हाल लाई देउबा दम्पतिलाई दोष दिनु भएको रैछ। देउबाले मेलाम्चि ल्याउन काम गरे कि तुहाउन एक् चोटि पुन: अध्ययन गरे हुन्छ। वास्तबिकता बिस्तारै नाङ्गिदै छ। कस्ले किन बिकास होइन बिनाश थोपर्न खोज्दै छ, अन्दाज गर्न अब मुश्किल छैन। बिकास बिरोधि तत्वहरुको झुन्द कस्को इशारामा चल्दो रैछ बुझिंदै छ। बिस्तारै घाम जस्तै हुने छ।
यमी जी, अहिले मन्त्री क्वार्टर् मा बस्नु हुन्छ क्या रे, पानी कुर्ने र भर्ने काम गर्नु पर्दैन होला। न त उहाँको बिदेशमा बस्ने छोरि लाई चिन्ता छ, पानीको। काठमाडौंका पुग न पुग ३७ लाख जनता ( जस्मा २४ लाख अन्यत्रबाट् अस्थायी रुपमा बसाइ सरेका) मध्य १ लाख जनताले पानीको लागि मानसिक र शारिरिक यातना दिन दिनै भोगिरहेकाछन्। क्रान्तिकारि नारी को चक्षुले १८ लाख नारिको क्रन्दन देख्दैन रैछ, केहि मुठ्ठि भर् रातो फेत्तावाला कर्मचारिहरु को संरक्षणार्थ लाखौं जनताको दुख सङ खेलवाड गर्ने महान कार्य गर्नु हुंदो रैछ, सलाम् छ काम्रेड यमी जी लाई।
ए डी बी मात्र होइन, सबै ले हात झिक्ने छन्, ज्ञानेको अहंकार सङ तचुनौती दिए तिनले।
यमी जी त आफै इन्जिनियर, लौ मलाई बताइ दिनुस् ( सके उहाँका चम्चाहरुले), काठ्माडौ को पानीको माग कसरि पुरा गर्नु हुन्छ। कहाँ बाट् ल्याउने दैनिक२० करोड् लिटर पानी?
कुनै उपाय छ, कुनै श्रोत छ? पानी के वाइ सी एल का कार्यकर्ताले त्रीशुलीबाट् बोकेर काठमाडौ पुर्‍याउंछन् कि?
पहिले पहिले त काठ्माडौ लाई बाहिरको मान्छे ( मन्त्री, प्रधान मन्त्री) वास्ता गरेनन् भनेर आरोप् आरोप् लगाइन्थ्यो र कतिपयले यसैमा चित्त बुझाउंथे। अब यमी जी, भुरुङ्खेलमा जन्मी हुर्केकि, अहिले नि मन्त्री क्वार्टरमा न भए त्यतै बस्नु हुन्थ्यो। कति दिन मा कति गाग्रो पानी झर्छ धाराबाट् मजाले थाहा छ उहाँलाई। तै पनि के गर्ने, माओ ले राम्रो कुरा सिकाको भए पो? गरीबलाई सधै गरीब नै राख्नु पर्ने, पीडितलाई झन पीडित नै बानौनु पर्ने सिद्धान्त हो तिनको। नत्र गरीब धनी भए भने, पीडित को पीडा हरण भए भने, तिनको नाम मा राजनीतिको रोटि पाक्न बन्द हुने छ। वा क्या गजबको सोच छ।

Foreign companies mangaing Nepal's drinking water does not sound good at all.

Privatization of water is not an OPTION.

Agree with Rahulbhai.

Emale le Arun dubaayo ra chetyo, Maoists le Melamchi dubaaera chetne holaa. Sabai leftists lai euta 'bhog' chadhaaunu parchha, tinako ideological krodh shanta parna.

Well, First of all COSTS and BENEFITS must be analysed


Arun III Hydroelectric Project In Nepal: Another World Bank Debacle?
By Lori Udall, Washtington Director, International Rivers Network.
1 March, 1995
Despite growing evidence of the unsoundness of the Arun III dam, the World Bank seems determined to approve this massive hydroelectric project to be constructed in a remote pristine valley in western Nepal. The costly Arun III could undermine Nepal's economy, dissipate local indigenous populations and cause irreversible destruction to one of the last remaining intact forests in the Himalayas. Although local Nepali hydro experts have been promoting a series of viable alternatives, and donor governments are raising serious questions about the project, the Bank is worried if it backs down on Arun III it will lose credibility as a financing partner for large scale infrastructure projects.

It's a five day walk from the nearest road to get to the proposed site of the Arun III dam in the Arun river valley. A planned 74.4 mile long access road to be constructed through the valley and the influx of up to 10,000 construction workers and their families will jeopardize the lives and cultures of 450,000 indigenous people and threaten over 100 species of endangered and rare flora and fauna. The Arun III project is the first in a series of three dams to be built in the valley and yet there has been no cumulative environmental impact assessment for the entire scheme. The World Bank is slated to lend $175 million for the project; other major donors include the Asian Development Bank ($127.6 million), Japanese Overseas Economic Cooperation Fund ($163.3 million) and Germany's KFW $124.4).

On October 24th, the Arun Concerned Group, a coalition of Nepali NGOs filed the first claim against the World Bank in the newly created Inspection Panel, an independent appeals mechanism set up to investigate claims from people directly affected by Bank projects. The Arun Concerned Group (ACG) claim charges that the Bank violated its policies and procedures during the preparation of the Arun III hydroelectric project. The ACG believes that there are alternatives to the project that are less expensive, less environmentally and socially damaging, and that would have the advantage of building domestic industrial capacity and developing hydropower more evenly throughout Nepal. While Arun III will be largely dependent on international contractors, a range of small to medium dams could be planned, built and run by domestic companies the NGOs said in the claim. ACG questions the prudence of building the $1 billion project which costs almost one and half times the annual national budget of Nepal. The claim against the Bank submits that the Bank violated its policies on economic evaluation of projects, and other policies such as energy, information disclosure, environment, and indigenous people during the preparation of Arun III.

"It's no exaggeration to say that Nepal's economic future is at stake" warned Gopal Siwakoti a lawyer with the Arun Concerned Group "Nepal is a poor country and this megaproject is completely inappropriate for it. But the World Bank is ignoring viable alternatives that will meet our energy needs at a lower cost".

The Inspection Panel made a preliminary study of the claim and in December 1994 recommended to the World Bank Board of Executive Directors that there be a full scale investigation of the policy violations. The panel noted several policy violations and cited the "absence of a close examination of alternatives [to Arun] " and concluded "There is reason to believe that if a less restrictive assessment, including a wider ranger of hydro resources, could be undertaken it would result in expanding the number of economically and environmentally acceptable options".

Local hydro experts such as Alliance for Energy have been promoting alternatives to Arun III for over a year. Alliance for Energy has put forward to the Bank and the Nepali government a concrete set of alternative proposals which include small and medium scale dam projects of up to 100 MW which could be developed in a number of river basins spread evenly throughout Nepal and could easily met the growing demand for electricity. These projects could be developed and built in less time than Arun III, and have the advantage of providing electricity to rural communities. According to the Alliance, the alternatives would be less damaging environmentally because the proposed sites are already near existing roads. "It is highly risky for a weak economy such as Nepal to put all funding into one costly project" said Bikash Pandey, an engineer with Alliance for Energy.

The U.S. Government has also questioned the wisdom and economics of the project in a recent draft report released by U.S. AID on October 31, 1994. The study contradicted the Bank's analyses of Arun III and concluded that Arun was not the lowest cost solution to the problem of Nepal's future power generation and that at this juncture Arun III would be a risky investment for Nepal. The study raised a series of questions about the Bank's economic analysis and risk assessment and stated "The thrust of all our results is that a prudent planner would postpone the construction of Arun by several years while developing credible responses to these as yet unanswered questions". The study was requested by Jan Piercy, the U.S. Executive Director to the World Bank who will be one of 24 Executive Directors to vote on project approval.

Concerns about the high cost of the project are even a growing controversy inside the Bank. The issue is reported to have polarized the entire the South Asia Country Department which includes Nepal, Bhutan and Bangladesh. Martin Karcher, a World Bank division Chief in that Department quit his job over his strongly held belief that the project would put Nepal at unnecessary economic risk. In a September 9, 1994 interview with Environmental Defense Fund (EDF), Karcher revealed the high cost of the project could prevent important future investments in Nepal in social sectors such as health, education and nutrition. Karcher stated that Bank management gave him little support in attempting to develop a targeted poverty alleviation program in Nepal, while focussing intensively on Arun. "My feeling was that the project was not being handled in an objective and even handed manner" said Karcher in the EDF interview, "Since senior management seemed committed to the project, a serious and open debate was no longer possible, and even common sense questions were being dismissed. All the available energy went into building the case in favor of the project, rather then examining alternatives". The World Bank's responded to Karcher's interview by claiming that Karcher's views were outdated and that the Bank had since revised its economic analysis for Arun III. However, Karcher has stuck to his original charges "The project is not in conformity with the Bank's poverty alleviation strategy for Nepal" said Karcher "Its an unbalanced use of Bank funds with an overemphasis on energy which will crowd out investments in the social sector and other high priorities such as rural infrastructure and agriculture".

In 1993, the World Bank was forced to withdraw from the Sardar Sarovar (Narmada) dam in India after years of intense international and Indian public pressure. The withdrawal was widely viewed as a major victory for environmental and human rights activists. But the Bank wants to be sure the Narmada withdrawal did not set a precedent for major infrastructure projects and is using Arun III as the battle ground. Joe Wood, Vice President for South Asia has made several public statements to the effect that the Bank's credibility as a funding partner for large-scale and controversial infrastructure projects is at stake, and if the Bank backs down on Arun it will become more difficult in the future for Bank management to bring large scale projects before the Board of Executive Directors for approval. "If we don't do it, the signal we'd send out is that the Bank can no longer support infrastructure projects like this" said Wood, in a recent interview with the Wall Street Journal "That would take away what the Bank can do for small counties like Nepal, which have no other source of financing to turn to". But the credibility of the Arun project in the eyes of key bilateral co-funders such as the Japanese and German governments is a more immediate problem for the Bank.

The Japanese government's Overseas Economic Cooperation Fund (OECF), one of the bilateral funders of the Arun III project was also stung by international criticism for its co-financing role in the discredited Sardar Sarovar dam and is now indecisive on Arun III. The Government of Japan jolted Bank confidence in July 1994 by informing Bank officials that it was not ready to publicly commit itself to co-financing Arun, until it did its own independent assessment of the project. This caused the World Bank to postpone the July 26th board approval date, which has not been rescheduled.

In August 1994, in a highly unusual move, the Japanese government sent two separate delegations to Nepal to conduct assessments and meet with Nepali officials and NGOs. One team was from the Overseas Economic Cooperation Fund and the second team included Bureau Directors from the Ministries of Finance, Foreign Affairs and International Trade and Industry. The participation of such high level Japanese officials in this type of investigation is unprecedented. The Bank has been working aggressively behind the scenes to convince the Japanese to fund the project, which has not yet made a commitment.

Controversy over the project has also been growing in Germany, particularly since the release of a report from the German Federal Audit Office in December 1994 which criticized KfW's appraisal. The report questioned the economic viability and risk assessment of Arun III stating "The economic viability of the project which is based on a considerable domestic electricity tariff increase and an intended export of energy to India, is insufficiently secured in various regards, in our view."

NGOs have accused the World Bank of pressuring the Nepali government to approve the Arun III project at a politically volatile time in Nepal and at a time when open public debates about the project were only beginning. Last July, Prime Minister Korirala resigned and disbanded the parliament. Even though there was only a "caretaker" government in place, Bank management was continuing with project preparation. On October 18, 1994, the chief opposition Communist party leader in Nepal, Madhav Kumar Nepal, wrote to Lewis Preston on October 18th, expressing his concern over the perceived attempt to approve Arun III before a permanent government was in place. "Formal and meaningful discussion about the proposed project with the availability of basic project documents and information in advance has not yet taken place in Parliament" he wrote, and added that "Arun III must be reviewed by the new government in light of the ongoing controversies before Nepal makes any commitment to such projects".

National elections inside Nepal took place in November 1994 and UML Communist party won the most seats in parliament and has formed the new Communist government. This has impacted on the debate around Arun III inside the country. On December 30th, an all day parliament session was devoted to Arun in which critical questions were raised about the cost of the project and the location of the access road. The new Minister for Industry and Water Resources, Hari Prasad Pandey, has also indicated he would consider alternatives designs to Arun III. In fact, a Nepali government delegation lead by Minster Pandey came to Washington in early 1995 attempting to re-negotiate certain aspects of the Arun III loan agreement in order to lower project costs, but the World Bank refused to allow any changes in the project. Despite the ongoing debate, the World Bank reportedly gave the Nepali government a January 8th deadline to make up its mind on Arun. The deadline was widely publicized inside Nepal. The Arun Concerned Group was angered by the pressure and in a January 5th letter to Lewis Preston said "the January 8th deadline is considered [an] undue intervention by the Bank in the internal affairs of Nepal in the decision making process on Arun III".

In the same letter the Nepalese NGOs responded to what seemed to be attempts by Bank management to interfere with the Inspection Panel Process. Vice President for South Asia, D. Joseph Wood, had made a statement to the World Bank Executive Directors which misrepresented the panels' preliminary report and recommendations, including the panel's view on project alternatives. The Arun Concerned Group charged "We are alarmed with attempts by Bank management to undermine the mandate of the inspection panel and the inspection process. We are particularly concerned with the fact that the management is attempting to misrepresent and misinterpret the preliminary findings of the panel..." Despite Bank management's interference, the Board of Executive Directors approved the inspection panel investigation on February 2nd which will look at violations of the Bank's environment, resettlement, and indigenous people's policies. The Inspection Panel reportedly felt it was not in their mandate to investigate alternatives to Arun III, although they clearly indicated they believed alternatives had not been adequately investigated and that the World Bank and the Government of Nepal should further look at alternatives. Regardless of this, Nepali NGOs believe that the issue of alternatives is fundamental to any investigation of Arun III, and if conducted comprehensively, the Inspection Panel investigation will undoubtedly raise further questions about the need for alternatives.

Out of all the recent developments around Arun III, one of the most critical for the Bank will be its actions vis-a-vis the inspection panel claim. The inspection panel was set up by Executive Directors in the wake of the Narmada controversy to act as an independent mechanism to investigates complaints about Bank management's violations of policy and procedures. NGOs, donor governments and legislators are all monitoring the development of this untested public accountability mechanism. If the Bank approves the Arun III project before the panel investigates the extensive Arun III complaint, or if Bank management continues its attempt to interfere in the claim process, it could undermine the effectiveness and integrity of the panel and the credibility of the Bank's stated commitment to public accountability

never read International River Networks's paper alone, and make up your mind. This is worldwide anti-dam group, filled with liberals. I mean, these days all the world bank projects are financed after cost benefit analysis.

Here is Hisila Yami's response:

Unhappy with Severn Trent
Yami unperturbed by ADB threat
Kantipur Report

KATHMANDU, May 10 - Dissatisfied with a cabinet decision taken by the previous government to appoint the UK's Severn Trent Water International (STWI) as Kathmandu Valley's water utility manager, Minister for Physical Planning and Construction Hisila Yami said Wednesday that the matter would be reviewed and alternatives explored.

Yami is unperturbed by a threat issued by the Asian Development Bank (ADB) Tuesday to terminate its loan commitment to the Melamchi project in the event the government does not appoint STWI by May 15.

"The next cabinet meeting will decide on this (whether STWI gets appointed)," said Yami, who postponed award of the contract Tuesday. The previous government in a cabinet decision approved the contract award to STWI for a six-year period for a total fee of US $ 8.5 million, fulfilling a major condition set by ADB for release of funds.

ADB's ultimatum

On Tuesday, the ministry issued a notice to Kathmandu Upatyeka Khanepani Ltd (KUKL), a water utility operator constituted by the previous government, directing it not to sign STWI's contract letter, as the matter was under review.

Following this, ADB's Melamchi Mission chief Keiichi Tamaki wrote to KUKL officials stating that if the contract is not awarded to STWI by May 15, ADB would terminate its loan number 1820, worth US $ 120 million, committed to the project. ADB is the largest donor to the project whose cost was restructured last year from US $ 464 million to US $ 350 million.

Yami's reservations

Yami said she took the decision to postpone the contract award and to discuss the matter once again at a cabinet meeting, owing to two concerns.

"Firstly, I am concerned by (the background of) the contractor," she said.

Severn Trent Water, a sister concern of UK firm Severn Trent and which also owns STWI, was fined 42 million pounds in the UK for providing false accounting information that led to the UK's water regulator, Ofwat, agreeing to let the company charge consumers high prices. Meanwhile, STWI earned disrepute in Guyana for non-delivery of promised improvements in water quality and quantity.

"And secondly, I have reservations about privatization. These things can be done through public-private partnership," said Yami.

When asked whether a delay in contract award can be afforded at a time when the project's principal donor has issued an ultimatum, Yami said, "We have seen even the constituent assembly election postponed. These things happen."

According to Melamchi project officials, this is the ninth time the deadline for award of the management contract has been extended. STWI, which hired three water management experts in April 2006 for taking up the Kathmandu job, has also told the ministry that it won't remain interested if the contract is not awarded by May 15.

ADB’s condition and concerns

Appointment of a private management contractor is a condition set by ADB for releasing its fund. According to a consultant at Melamchi project, ADB set the condition in view of the fact that there was no improvement in the water supply situation in Kathmandu Valley from 1990 to 1999, despite US $ 100 million worth of aid, loan and technical support injected for the purpose during that period.

"That proved that loan, aid and technical support would not improve the utility's delivery. Therefore, expertise had to be injected," said the consultant. "Thus the necessity of a management contractor."

The funding commitment originally meant to expire in March 2007, the project's original deadline, was later extended to June-end 2007 as the project was delayed.

Tamaki was scheduled to request the ADB board in Manila, Philippines, in June to extend the funding commitment till 2013, according to the consultant. "However, without appointment of a private management contractor, there will be no ground to persuade extension of the funding commitment," he added.

Funds spent so far

According to project sources, over Rs 4 billion has been spent on the project so far in over six years since commencement of construction in 2001.

However, very little has been used from the ADB loan, which is mainly meant to fund construction of the project's costliest component, the 26.5-km diversion tunnel from Melamchi Valley to Sundarijal in Kathmandu, and for improvement of the bulk distribution system in Kathmandu Valley where leakage stands at 40

percent, going by Nepal Water Supply Corporation's estimate.

The Melamchi project is designed to supply 170 million liters of water to the Valley daily from the Melamchi River in Sindhupalchowk district. The project has future prospects of doubling the volume of supply, with water from the Larke and Yangri Rivers.

Posted on: 2007-05-09 21:13:08 (Server Time)

Newar ko bachcha ho tinle garchhin thik.. sadly she is Maoists... bahun screwed her and taken her into hell.. that's the problem.

well, mr newstudent i wasn't making up my mind just based on the above article. i was only forwarding an argument. here is another. perhaps u might have heard about john perkins. he is the author or Confessions of Economic Hitman

AMY GOODMAN: Well, before we move further, your experience with it? Explain the vantage point you come from. What does it mean to be an economic hit man?

JOHN PERKINS: Well, what we've done -- we use many techniques, but probably the most common is that we'll go to a country that has resources that our corporations covet, like oil, and we'll arrange a huge loan to that country from an organization like the World Bank or one of its sisters, but almost all of the money goes to the U.S. corporations, not to the country itself, corporations like Bechtel and Halliburton, General Motors, General Electric, these types of organizations, and they build huge infrastructure projects in that country: power plants, highways, ports, industrial parks, things that serve the very rich and seldom even reach the poor. In fact, the poor suffer, because the loans have to be repaid, and they're huge loans, and the repayment of them means that the poor won't get education, health, and other social services, and the country is left holding a huge debt, by intention. We go back, we economic hit men, to this country and say, “Look, you owe us a lot of money. You can't repay your debts, so give us a pound of flesh. Sell our oil companies your oil real cheap or vote with us at the next U.N. vote or send troops in support of ours to some place in the world such as Iraq.” And in that way, we've managed to build a world empire with very few people actually knowing that we've done this.

Besides its not anti-dam propoganda or whtsoever.point out 1 country that has sustained its development through the help of world bank loans and i will point out 10 countries that has been screwed by these loans.

corruption. Everywhere corruption. Now maoist turn to do corruption.

I hope Melamchi is not victimized as Arun-II...

jung,

why not you point out 9 countries first, and then I will give you 2 countries that have immensely benefitted from dams.

When you "point out" countries worsened by dam, make sure it is not by some Arundhati Roy's bhashan but an article published in refereed journal. I will do the same. Bhasanko bharamaa guff diera sansar chalaauna sakinna. I don't think countries are so stupid that they take loans if there are so many screwed countries around.

Here is an article by Kenneth Rogoff . He is an economics professor at Harvard University.

By the end of 1990 the world's poor and developing countries owed more than $1.3 trillion to industrialized countries. Among the largest problem debtors were Brazil ($116 billion), Mexico ($97 billion), and Argentina ($61 billion). Of the total developing-country debt, roughly half is owed to private creditors, mainly commercial banks.

The rest consists of obligations to international lending organizations such as the International Monetary Fund (IMF) and the World Bank, and to governments and government agencies—export-import banks, for example. Of the private bank debt, the bulk has been incurred by middle-income countries, especially in Latin America. The world's poorest countries, mostly in Africa and South Asia, were never able to borrow substantial sums from the private sector and most of their debts are to the IMF, World Bank, and other governments.

Third World debt grew dramatically during the seventies, when bankers were eager to lend money to developing countries. Although many Third World governments defaulted on their debts during the thirties, bankers had put that episode out of their minds by the seventies. The mood of the time is perhaps best captured in the famous proclamation by the Citibank chairman at the time, Walter Wriston, that lending to governments is safe banking because sovereign nations do not default on their debts.

The loan pyramid came crashing down in August 1982, when the Mexican government suddenly found itself unable to roll over its private debts (that is, borrow new funds to replace loans that were due) and was unprepared to quickly shift gears from being a net borrower to a net repayer. Soon after, a slew of other sovereign debtors sought rescheduling agreements, and the "debt crisis" was officially under way. Though experts do not really understand why the crisis started precisely when it did, its basic causes are clear. The sharp rise in world interest rates in the early eighties greatly increased the interest burden on debtor countries because most of their borrowings were indexed to short-term interest rates. At the same time, export receipts of developing countries suffered as commodity prices began to fall, reversing their rise of the seventies. More generally, sluggish growth in the industrialized countries made debt servicing much more difficult.

It goes on....But U must have got the jest of the article.