Dynamics of Financing, Governance and Socioeconomic Benefits of Melamchi Water Supply Project in Nepal: Lessons Learnt

Abstract

This study assesses the dynamics of multi-sectorial benefits of a top-flagship project which bears tangible benefits of the project and benefits earned by the beneficiaries through nonrelated water pricing mechanism. The paper is based on content analysis and consultation with the stakeholders concerned and beneficiaries. The result reveals huge tangible benefits from the project; however, poor project governance and institutional weakness in managing the project all contributed to delaying the project by nearly 15 years than its scheduled completion date. This has resulted loses of over tens of millions USD annually only due to missing opportunity to obtain water revenue of transferred water, leaving aside other indirect benefits of water scarce urban households of Kathmandu. The lessons learnt from this project provide valuable information and insight for addressing governances and institutional factors in infrastructural project development and project execution in Nepal and also in other developing countries in the region.