On January 31, 2007, the Nepal government got temporary reprieve in a long-standing controversy over the Kathmandu water supply bill. Its ministry of physical planning and works signed an agreement with the protesting Sanyukta Sangharsh Samiti, a union of employees of the Nepal Water Supply Corporation, the government water supply utility, to break the impasse over the bill. The Nepal government has agreed to bring in changes in the Nepal Water Supply Corporation (Third Amendment) Bill.

The workers' union had been protesting for a month-and-a-half against the bill passed by the House of Representatives on January 4, 2007. Ever since the bill was tabled in parliament, the union had stopped water supply to major government buildings and recently, also to the prime minister's residence, the royal palace and ministers' quarters. Prime minister Girija Prasad Koirala had to intervene and direct the physical planning ministry to sort out the matter.The agreement The important clause in the agreement is the government's promise to amend the bill keeping in mind the interests of consumers. The agreement states that the management switchover to a private company would not result in employee retrenchment and their employment status would remain same. Besides, employees can only be asked to leave through a voluntary retirement scheme. The agreement also said that the employees working on contract basis and as daily wage labourers would be made permanent within 15 days.


The contentious bill Activists call the bill a guise to privatise the water sector under pressure from multilateral development banks like the Asian Development Bank (adb). They allege that privatisation will increase water tariff by about five times. The government has not explored other cheaper alternatives to supply water to the valley, they claim. The bill enables the government to manage Kathmandu valley's water supply system through a semi-autonomous drinking water management board. The point of contention in the bill is the appointment of a private company to look after the day-to-day water supply in the valley. The government has awarded this contract to a controversial British company Severn Trent Water International Limited. In 2004, it was charged for fraud in Europe and in 2005, it was taken to task by the Office of Water Services, an industry regulator in the uk, for overcharging customers (see