Local Water Management Institutions and the Bulk Intersectoral Water Transfer: A Case Study of the Melamchi Water Transfer Project in Nepal

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"To mitigate drinking water crisis in Kathmandu city, the Government of Nepal has recently initiated Melamchi water transfer project, 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 (@ 1.97M3/sec), which will be to triple-using the same infrastructure- as city water demand increases in the future. This paper analyzes some of the major local water management related changes brought by the water transfer project, and the changes in local water governance and CPR institutions in the Melamchi basin. Our study showed that traditional informal water management institutions were effective in regulating present water use practices, but the situation will vastly change because of this scale of water transfer decisions, and inequity in bargaining power due to the involvement of organized public sector at one side and dispersed and unorganized marginal waters users and FMIS institutions at the other end. This has made it difficult for the local farmers (users) and institutions to collectively bargain and negotiate with the central water transfer authority for fair share of the project benefits, and/or, due compensation of the losses imposed to them. The process and scale of project compensation for economic losses and equity over resources uses are at the heart of concerns and debates about the Melamchi water transfer decision. The Melamchi project has plan for one time fixed type of compensation package and about one percent of revenue sharing package from the city collected water revenue with the basin of water origin. The main issues here are what forms of compensation packages and water rights structures would emerge in relation to the project activities that are socially acceptable and also ensure equitable distribution of the project benefits between the two water sharing basin-communities. This paper illustrates some of these issues exclusively in the case of Melamchi water transfer project in Nepal, but these issues are equally applicable to wider regions of other developing countries where such rural to urban water transfer decisions are in discussions."
IASC, water resources, resource management, common pool resources, institutional change, traditional institutions, inequality, water users' associations