Maoist chief fails to move ADB


Kathmandu : Persuasion by top Maoists leaders has failed to placate the Asian Development Bank (ADB), that has announced its decision to pull out of Nepal's biggest development project after a Maoist minister refused to honour an old contract.

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Maoist supremo Prachanda, his deputy Baburam Bhattarai and the minister who struck the discordant note, Physical Planning And Infrastructure Minister Hisila Yami, Wednesday met ADB's Nepal director Paul J. Heytens and asked him to reconsider the decision on the nearly $500 million Melamchi Water Supply Project.

When Prachanda Wednesday asked ADB not to abandon the project simply due to differences over a "small component", Heytens reportedly said the Manila headquarters would mull the request.

On Tuesday, Heytens issued a statement in Kathmandu, announcing that the ADB would stop funding the mega project – that would have resolved Kathmandu valley's acute drinking water scarcity – after June 30.

The ADB decision came after Yami refused to honour the commitment made by an earlier government to hand over the management of the drinking water supply to a private company.

British company Severn Trent Water International had been chosen by the Nepal government after the ADB made it a precondition for the loan that a private company be entrusted with the management since the state entities were rife with corruption and mismanagement.

Yami, who was appointed last month after the Maoists joined the government, had opposed awarding the contract to Severn Trent, saying it had a bad track record. She had also expressed confidence that ADB would extend the loan and allow the government to find a replacement.

However, the ADB, that said it had stood by the controversial project during times of crises, decided to pull out, citing that Nepal had vacillated nine times over signing the contract with the private company.

An alarmed Nepal government has begun scrambling for new donors.

Finance Minister Ram Sharan Mahat, Nepal's state media said Thursday, is making "maximum effort" to salvage the ambitious project by looking for new donors among the international community.

According to Mahat, the government is thinking of entering into a fresh agreement with a company, not named by the official media.

Mahat is also likely to make a new request to the ADB once the agreement is complete.

The minister, who had locked horns with Yami over the project, also cautioned that the Melamchi disaster would tarnish Nepal's image before the international community with several donors, including Japan, likely to be influenced by the way the project faired.