The initially predominantly state-centric water management and governance model in Nepal has gradually shifted towards community-based management practices. This shift is now increasingly embracing the neoliberal framework through the commoditization and privatization of services, facilitated by larger water infrastructures and institutional change. This profound transformation has significantly altered the landscape of water access, particularly in rapidly urbanizing small towns. This study explores the process of neoliberalizing water in these emerging towns and critically examines its impacts on water access for marginalized communities. The analysis covers three key dimensions—infrastructure, institutions and access, and demonstrates how they are interlinked and co-shape access to water. I specifically analyze how access to water is socio-economically and spatially differentiated among different users. Using Diktel and Dhulikhel as two cases study towns in Nepal, I first assess their newly built water infrastructures and critically explain how these developments impose financial burdens on water users, keeping the urban poor away from access. Secondly, I examine how the expansion of larger infrastructure entails institutional rearrangements in water governance. My analysis highlights how traditional community-based water management institutions are being challenged by the emerging neoliberal approach to resource management. Thirdly, I explore how this infrastructure and institutional rearrangement territorializes water access among certain users and often failing to ensure equitable access. The preliminary findings from two case study towns reveal that, while the implementation of larger water infrastructure introduces novel possibilities, it simultaneously disrupts established norms and traditions related to water distribution. These changes do not only create indebted water users but also commodify water, thereby disrupting the fair distribution and weakening the institutional mechanism for water governance. As a result, the ensuing dynamics contribute to growing inequality in water access, placing a disproportionate burden on marginalized communities, particularly the urban poor, periphery dwellers and communal tap users.
