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Implications Of Bulk Water Transfer On Local Water Management Institutions: A Case Study of the Melamchi Water Supply Project in Nepal

January 1, 2008

To mitigate a drinking water crisis in Kathmandu valley, the Government of Nepal initiated the Melamchi Water Supply Project in 1997, which will divert water from the Melamchi River to Kathmandu city's water supply network. In the first phase, the Project will divert 170,000 cubic meters of water per day (at the rate of 1.97M3/sec), which will be tripled using the same infrastructure as city water demand increases in the future. The large scale transfer of water would have farreaching implications in both water supplying and receiving basins. This paper analyzes some of the major changes related to local water management and socioeconomics brought about by the Project and in particular the changes in the local water management institutions in the Melamchi basin. Our study shows that traditional informal water management institutions were effective in regulating present water use practices in the water supplying basin, but the situation will vastly change because of the scale of water transfer, and power inequity between the organized public sector on one side and dispersed and unorganized marginal water users on the other. The small scale of water usage and multiple informal arrangements at the local level have made it difficult for the local users and institutions to collectively bargain and negotiate with the central water transfer authority for a fair share of project benefits and compensation for the losses imposed on them. The process and scale of project compensation for economic losses and equity over resource use are at the heart of the concerns and debates about the Melamchi water transfer decision. The Project has planned for a one-time compensation package of about US$18 million for development infrastructure related investments and is planning to share about one percent of revenue generated from water use in the city with the supplying basin. The main issues here are what forms of water sharing governance, compensation packages, and water rights structures would emerge in relation to the project implementation and whether they are socially acceptable ensuring equitable distribution of the project benefits to all basin communities. In addition, these issues of the Melamchi project discussed in this paper are equally pertinent to other places where rural to urban water transfer projects are under discussion.

The Fluid Mosaic: Water Governance in the Context of Variability, Uncertainty and Change, A Synthesis Paper

January 1, 2003

This report summarises five years of collaborative investigation by Indian and Nepali researchers on water management needs and options in Gujarat, Rajasthan, Tamil Nadu and parts of Nepal. The sections focus on the specific water management issues and challenges in case study areas. The core messages, however, relate to the fluid mosaic of water governance -- how society may be able to address the sharp edged, immediate constraints present at local levels and shaped by local conditions but ordered within a larger, changing, fluid and poorly understood picture.Field research in case study areas was conducted by Nepal Water Conservation Foundation (NWCF, Kathmandu, Nepal), the Madras Institute of Development Studies (MIDS, Chennai, Tamil Nadu), the Institute of Development Studies, Jaipur (IDS, Jaipur, Rajasthan) and the Vikram Sarabhai Centre for Development Interaction (VIKSAT, Ahmedabad, Gujarat). The Institute for Social and Environmental Transition (ISET, Boulder, Colorado) coordinated and supported the project.