KATHMANDU, An Asian Development Bank (ADB) mission that wrapped up its Kathmandu visit on Sunday will table two key proposals made by Nepal
in connection with the Melamchi project, at the bank's headquarters in Manila, the Philippines.

The mission, headed by former chief of ADB's Nepal Resident Mission Sultan Hafeez Rahman, will table Nepal's proposal to de-link release of ADB funds from appointment of management contractor, according to Laxmi Prasad Devkota, board chairman of Kathmandu Water Supply Corporation (KWSC) that will soon cede rights to manage water distribution inside the Valley. The present funding contract with ADB, the largest donor of the US $ 350 million project, requires appointment of management contractor prior to release of funds for construction of a tunnel, a key component of the project.

The second proposal made by Nepal that the mission will be tabling is autonomy to Kathmandu Upatyeka Khanepani Limited (KUKL), a water utility operator formed as part of institutional
reforms of the Valley's water distribution system, to choose the kind of manager it deems fits for Kathmandu Valley's water supply system, Devkota said.

The current arrangement with ADB, provides no alternative to appointing a private management contractor. During the mission's visit, Nepal asked that alternatives, such as appointing a consultant or strengthening KUKL and allowing it to run the utility on its own, be explored as well.

According to sources, the ADB mission was encouraged by the pace at which institutional reforms are taking place in the Valley's water utility. The government plans to make KUKL fully operational by October 1, the source said. ADB's extended loan commitment to the project expires on November 30.

As part of institutional reforms of the Valley's water utility, Nepal Water Supply Corporation (NWSC) on Monday refused to extend contracts of 250 out of 550 temporary workers of the corporation throughout the country. Raj Kumar Thapa, secretary of NWSC Workers' Union Joint Struggle Committee, said this has set a deep sense of insecurity in NWSC staff, and added that the committee is launching protests from Tuesday. NWSC has over 1,650 permanent staff across the country.

After over a month of protest by the committee in February this year, the government had agreed to accommodate existing NWSC staff and workers on contract in the new bodies to be set up for Melamchi, and to hand over retirement benefits to the remaining staff.