Melamchi Water Supply Development Board (MWSDB) terminated its USD 75M contract with a Chinese firm, China Railway 15 Bureau Group, for building the diversion tunnel under the Melamchi Water Supply Project last year. The government decided to scrap the tender and invite fresh tender.

The contract involves the construction of the tunnel to divert 170M liters of water per day from Melamchi to Sundarijal, where the water would undergo treatment before going into the bulk distribution system. China Railway 15 Bureau Group company constructed 6.5km of tunnel over the last three years. The project was supposed to be completed by the end of 2013.