Sweden withdraws aid commitment to Nepal water project

Kathmandu_(dpa) _ Sweden is to withdraw its aid commitment of 25 million US dollars for the ambitious multi-million dollar Melamchi Water Supply Project, a newspaper report said Tuesday.

The Swedish aid was to have gone into the construction of a 26.5 kilometre tunnel to bring 170 million litres of water per day from Melamchi to the Kathmandu Valley.

The English language daily Kathmandu Post, quoting a "high ranking government source," said the decision to terminate the aid commitment was communicated to the Nepalese government by the Swedish International Development Agency.

In July 2005, another European country, Norway, citing lack of democracy in Nepal after King Gyanendra's takeover of power in February, said that it was withdrawing its commitment of 28 million US dollars for the construction of the tunnel.

According to the Kathmandu Post, as both Norway and Sweden have withdrawn their aid commitment, the Nordic Development Fund (NDF) was also likely to walk away from the project. NDF has committed 10 million dollars for the tunnel construction.

The construction of the tunnel, a vital component of the project, is estimated to cost over 70 million dollars.

The Melamchi project is estimated to cost over 450 million dollars to bring drinking water to the Nepalese capital from the Melamchi River, about 50 kilometres north-east of the capital.

Japan and the Asian Development Bank are the main financers of the project. About 57 per cent of the cost of the project was to be met through loans, 16 per cent through grants and 26 per cent to be met by the Nepalese government.

The Kathmandu Valley faces an acute water shortage with the Nepal Water Supply Corporation providing just two hours of piped water on alternate days.

The withdrawal of the Swedish commitment to the project will mean further delay in the completion of the already-delayed project that has been bogged down by allegations of corruption. dpa sb jh