Water from Melamchi River in Sindhupalchok reached Sundarijal in Kathmandu on Saturday after a decades-long wait. While the general public has welcomed the move expecting respite from the water crisis in the Capital, Helambu Rural Municipality, where the Melamchi Water Supply Project is located, has accused the project contractor of non-payment of local tax.

The rural municipality says Sinohydro Corporation Ltd, the Chinese contractor company of the project, has not paid for natural resources—slates, stones, soil and other riverbed materials—used while constructing Ambathan dam and other infrastructures in Helambu Rural Municipality Ward No. 1.

According to Nimagyaljen Sherpa, chairman of the rural municipality, the company owes the local unit over Rs 50 million in tax.

“Riverbed materials, including slate, stones and soil, were used in constructing the water intake area and other infrastructures in Helambu. But the contractor has not paid tax levied on the resources it used,” said Sherpa. “We have notified the project officials about the non-payment but we haven’t received any answer yet.”

According to the Local Government Operation Act (2017), the local unit has the authority to extract, use and sell riverbed materials. According to the act, the local unit can sell riverbed materials for Rs 9 per cubic metre.

“Under the same provision, we have been demanding tax for the construction materials used by the contractor since 2018. We have also been requesting the project officials to coordinate with us for tax clearance,” said Sherpa.

Construction works of the water intake area, Gayalthum-Adit road and other infrastructure are still ongoing, he said.

“We have notified Sinohydro about the request of the rural municipality. The contractor company has to pay tax for using the natural resources of Helambu,” said Tiresh Prasad Khatri, executive director of the Melamchi Water Supply Development Board.

The project officials however refute the allegations made by Helambu administration. The company paid all the vendors and suppliers for the materials they supplied, said officials. “Sinohydro began completing the uncompleted infrastructures of Melamchi Water Supply Project after making formal agreement with the concerned agencies of the government of Nepal. We have signed the terms and conditions and we assure you that we abide by the clauses mentioned in the agreement,” said Project Manager Wang Wei, said in a letter to the Post.

Meanwhile, the local people of Helambu Rural Municipality Ward No. 1 have been requesting the project officials to supply water to Kathmandu only after releasing sufficient water in the Melamchi River for their use.

Helambu residents use water from the river to operate fisheries, water mills and other irrigation purposes.

According to the recent survey carried out by the rural municipality, 1,190 litres of water (per second) is needed to conduct six irrigation projects and 14 farms in the rural municipality.

“We have also notified the project about the request of Helambu residents. The executive meeting of the rural municipality has decided to take 25 percent of the income generated from the water supply project,” said Sherpa.

Uttam Mani Bhandari, who operates a fish farm in Kiul, Helambu, said there should be enough water left in the Melamchi river for the local residents to operate fish farms and other agricultural businesses.

“We won’t be able to make a living if the local unit does not look into our problem,” Bhandari said.

This article has been updated to include input from the project officials.