Shashibhusan Kumar Yadav Review of feasibility study on Kathmandu Valley Water Distribution, Sewerage, and Urban Development Project Group 4 Anil Achyra Krishna Raj Pantha Manish Kumar Das Radha Krishna Thapa Shashibhusan Kumar Yadav Suman Regmi

Goal and Objectives Goal To contribute towards social-economic development, improved health and well-being of all urban population of Kathmandu Valley, in particular, the poor. Objectives Out the various objectives main objectives are: To provide effective and equitable water distribution from the water supplied under the Melamchi Water Supply Subproject 1 and fro the in-valley water sources To improve collection and conveyance of the off-site sewerage system and waste water treatment So the objectives are compatible with the goal but not well addressed poor particularly

National Priorities The goal of Three Year Interim Plan emphasizes the need to maintain regional balance in urban development by considering it as a promoter of rural development and as market centers as a means to expand rural-urban linkages. The goal of National Urban Water Supply and Sanitation Sector Policy (2009) is to ensure socio-economic development, improved health status and quality of life to urban populations, including poor and marginalized, through the provision of sustainable water supply and sanitation services and protection of the environment. The goal of the project is compatible with the national development policy

Project Components Melamchi Water Supply Project (MWSP) is implemented under two subproject. Subproject-1 delivers bulk potable water to head of Kathmandu Valley Subproject-2 consists water distribution system and wastewater system improvement in the valley Water supply Bulk Distribution System (35 KM pipeline from 600 to 1500 mm diameter) Services reservoirs (5 no. with total 68,000 m³ capacity) Distribution Network Improvement (427 KM of mains 80 to 600 mm diameter) Equipment vehicle and materials (Trench excavator, maintenance vehicles, spare pipes and fittings) Wastewater System Sewerage Network Rehabilitation Sewerage Network Development Wastewater treatment plant upgrading (84 m³ per day) Equipment vehicles and materials

Market and Demand Aspect The data are collected by interviewing with 5.5 % of population of DNI pilot area (ward no. 7 and some part of ward no. 8 of KMC and only 249 households) . So reliability of the available data is questionable Water demand is calculated only for the population by 2025. Water demand has not been calculated considering the factors like price, household income availability and accessibility of water supply. Only 70 lcpd has been considered hypothetically considering probable supply. People living in rental are not estimated any appropriate method(30% assumed)

Technical Aspect Detailed design and estimate of the project components are not available in this report. Location of treatment plants, area required and its disposal plan are not mentioned in the report. So difficult to review technically. Probably the capacity of distribution system and treatment plant has been designed for the demand of population by 2025.The scope of design is limited. Waste water treatment plant has been proposed but quality after treatment and disposal plan has not been mentioned

Institutional and Management Aspect Existing institutional capacity of KUKL has been analyzed. Capacity building for the operation of phase has been proposed.(In collaboration with CBP Team)

Environment Aspect According to ADB Guideline for the Economic Analysis of Projects(1997) Environmental benefits is not considered. Sample size small(5.5% of the DNA pilot area-) Comments EI is not quantified. Issues of unplanned urbanization have been raised but no activities are proposed Ground water recharge issue has not been raised Environmental impact of treatment plant not considered

Financial Aspect Cost estimate of the project = $ 129.33 million (ADB 72 % and GON 28 %) Investment duration = 2012-2016 (5 years) FIRR are calculated 13.6%, 20.3%, 13.31% and 13.9% respectively for water supply, waste water, combined and on-lend situation Sensitivity analysis done based on all cost increased by 10 % and benefit decreased by 10% Comments Tax to be paid by KUKL has been assumed 30% of gross income(assumption based), modality-??? Financial analysis does not take account over all financial liabilities of KUKL such as license fees, cost of water from Melamchi Water Supply Development Board (MWSDB)

Economic Aspect EIRR are calculated 36.9%, 30.8%, 26.1% and 26.9% respectively for water supply, waste water, combined and on-lend situation Without project situation Tariffs are very low due to non-reliable supply Consumers have to pay high cost to purify, pumping and storage as well as tankers Considerable time for fetching and carrying water Deteriorating situation in terms of social life, health hazards, income poverty and environmental consequences Extra amount for cleaning septic tank Average per capita water consumption of utility service water is 35 litres

Economic Aspect(contd..) With project The water supply will be sufficient and continue daily for at least 2 hours. Water supply will be increased to 70 lpccd. Expenditure on health and sanitation will be reduced. Cost saving in terms of time saving to collect water Better environment and living conditions and reduction in public health risks in the project area.

Economic Aspect(Contd..) Comments Economic analysis does not take account over Cost of future investment required to meet 2025 service demand. Avoided cost ( cost of water purification has not been considered) but septic tank cleaning cost has been considered (50 % cost of 25 % household will be reduced)  Opportunity cost of water provided to the project is considered zero i.e. "benefit foregone" use of water in agriculture is not considered. Institutional strengthening and capacity building components related to the project has not been considered in economic analysis. Effect on tourist and tourist related business has not been considered.

Social Aspect Loss of income Road closure and traffic diversion Dust, noise and waste disposal Issues of indigenous people and gender are raised but no analysis made Comments except loss of income, mitigation measures are not recommended for other issues

Risk Aspect Institutional and government risk Policy risk Physical component risk Social Risk Environmental risk Financial risk Economic risk Comment Associated project-1 risk is not considered.

Conclusion Study based on assumption Overall scope is limited in present context Detail analysis is missing Project it self feasible but further analysis needed.