The Contingent Valuation Method (CVM) was used to reveal the households` willingness to pay
(WTP) for a water supply system improvement in Kathmandu Valley, Nepal. In-person
interviews of random sample of 240 households were conducted in Kathmandu Metropolitan of
Kathmandu district, Latitpur sub-metropolitan of Lalitpur district and Madyapur Thimi
Municipality of Bhaktapur district of Kathmandu Valley. Cross-sectional ramdom sampling
method is used to collect 80 samples from each district; 20 from each wards of respective
district. Both households that are currently connected (piped) and those that are not (non-piped)
were asked their WTP in terms of the monthly income, water bill, electricity bill, education etc.
Melamchi Water Supply Project (MWSP) is going to complete by June, 2016. Maximum
capacity of the project is 170 mld. It is supposed that MWSP will help to reduce water scarcity
problem by 50% in Kathmandu Valley. So, they would pay for an improvement in the water
supply services. The mean WTP of piped and non-piped households were NRs 562 (US$ 5.9)
and NRs 590 (US$ 6.2) per month, respectively. Currently piped households are paying NRS
225 (US$ 2.4) per month for drinking water and sanitation. According to my research, I found
that piped households are ready to pay 102% more if they will get improved water service of 10
hours per day. On the other hand, I quantified from my analysis that non-piped households are
also willing to pay NRs 590 (US$ 6.2) which is little bit surprising. But ground reality is that
people of Kathmandu Valley, Nepal are facing shortage of more than 200 mld per day. Its shows
that non-piped households are desperately looking for option of consistent water supply service
as compared to present system (i.e well water, jar water, tanker water, tube well etc). Due lack of
purity and consistency in present drinking water system, non-piped households might be higher
WTP than piped households.