In Nepal, water institutions have played a very significant role, and in Tansen and Damauli, the presence of user groups has indicated that proper management of water can help people avert critical water shortages. However, although in both Tansen and Damauli the user groups have been operating for a long time, their performances vary. In Tansen, infrastructural constraints tend to throw up challenges, although operational hazards associated with the supply systems are no less threatening. Moreover, there is large-scale corruption in the systems' upkeep and maintenance, allowing low grade vendors to operate in place of readily available efficient institutions. In Damauli, the systems have been rather perfectly managed, except for minor glitches from time to time. Funding has been good and community bonding has paid off. This paper delves into the community managed water systems in the two cities and how the performance varies across them and the factors that play a role.