In recent years, it’s hard to find any project in Nepal that hasn’t been affected by corruption or a leader free from controversy. The Melamchi Water Supply Project, designed to provide drinking water to the Kathmandu Valley, has been undermined by the greed of both politicians and bureaucrats.
During the monsoon season, the Kathmandu Valley often faces flooding from swollen rivers. Ironically, while the valley experiences inundation, the household water taps remain dry due to the suspension of regular water supply from the ambitious Melamchi Water Supply Project. Authorities attribute this suspension to excessive slurry overload at the project's water headworks during the monsoon. However, another critical issue lies beneath the surface—the pervasive corruption that has plagued the project over its prolonged three-decade span.
The Melamchi Water Supply Project, heralded as a panacea for Kathmandu’s chronic water shortages, stands today as a stark symbol of mismanagement, corruption, and unfulfilled promises. Initiated with grand ambitions in the early 2000s, this ambitious endeavor quickly unraveled amidst a series of contractual disputes and administrative failures.
One of the largest and most significant infrastructure projects in Nepal, the Melamchi Water Supply Project, has been marred by corruption allegations. Initially conceived to alleviate water shortages in the Kathmandu Valley, the project has faced delays and cost overruns due to alleged kickbacks and financial mismanagement. Public outrage peaked when investigations revealed that funds intended for construction were siphoned off through fraudulent means, highlighting deep-seated issues within the public procurement system.
Initially entrusted to a reputable Chinese firm, the project encountered early setbacks due to sluggish progress in critical construction phases. As frustrations mounted among the populace grappling with water scarcity, the government took the drastic step of terminating the contract, plunging the project into uncertainty.
In 2013, hopes were reignited with an Italian company tasked with reviving the project’s fortunes. However, what followed was a saga of alleged financial misconduct and corruption. Reports surfaced of illegal payments made to the contractor without proper adherence to legal protocols, resulting in significant financial losses to the state coffers.
The fallout was swift and severe. The Commission for Investigation of Abuse of Authority (CIAA) intervened, unearthing a web of embezzlement and favoritism implicating former Ministry of Water Supply secretaries and other officials. This legal debacle underscored deep-rooted governance flaws and a lack of oversight that plagued the project from its inception.
As delays mounted and costs soared, public outcry intensified. The project, envisioned to bolster Kathmandu’s water supply by millions of liters daily, instead became a testament to bureaucratic inertia and broken promises. Residents, weary of unreliable water sources and inadequate infrastructure, were left disillusioned by successive failures to deliver on essential public services.
The Melamchi debacle serves as a poignant reminder of the perils of unchecked corruption in infrastructure projects. It underscores the urgent need for stringent regulatory oversight, transparent contract management, and accountability at every stage of implementation. Without these safeguards, ambitious projects risk becoming breeding grounds for malfeasance, squandering public funds meant for critical development.
Looking ahead, Nepal’s government must heed the hard-earned lessons of Melamchi. Reforms are imperative to restore public trust and ensure future projects uphold integrity and efficiency. Only through robust governance reforms and a commitment to transparency can Nepal achieve its sustainable development goals and deliver essential services equitably to its citizens.
While Melamchi was conceived with noble intentions, its journey epitomizes systemic failures in governance and project management. Addressing these shortcomings is not just advisable but essential to forging a path towards a more accountable and resilient infrastructure framework in Nepal.
The Commission for Investigation of Abuse of Authority (CIAA) has filed a corruption case against 17 individuals and entities, including three former secretaries, in connection with alleged irregularities in the Melamchi Water Supply Project. The case was lodged at the Special Court.
High profiles officials including former secretaries of the Government of Nepal, who previously chaired the Melamchi Water Supply Development Board during their tenures as Ministry of Water Supply secretaries, are named as defendants in the chargesheet. Other defendants include board members, and executive directors and the Under-secretaries at the board at different times. According to the CIAA, these individuals and entities are accused of involvement in illegal payments from government resources. The charges against them range from Rs890 million to Rs. 41.13 million each, pertaining to alleged losses caused to the government.
The Melamchi Water Supply Project initially hired the Italian company in July 2013 after terminating a contract with a Chinese company. However, the contract with the Italian firm was also terminated in January 2019 due to unsatisfactory progress. Subsequently, another construction company took over to complete the remaining works, but the project was affected by floods in June 2021.
The CIAA alleges that the Italian contractor received illegal payments on multiple occasions, with advance payments not properly deducted from later payments, resulting in losses for the state. The interest on these illegal payments, amounting to Rs. 110.91 million, was reportedly not recovered after the contractor's bank guarantee was seized upon contract termination.
Additionally, the government is said to have incurred further losses by failing to deduct Rs. 100 million from provisional payments to the Italian contractor and not recovering Rs. 276.64 million for equipment and structures left by the previous Chinese contractor. The CIAA also highlighted payments made without proper approval and full payments for incomplete work, leading to additional losses for the state. Overall, the corruption case filed by the CIAA focuses on these allegations of financial misconduct and mismanagement within the Melamchi Water Supply Project.
(Views are personal. Email: vidhukayastha@gmail.com)