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Hi Lisa HDPE tanks of that size should be fine and the life should be comparable to a ferrocement tank. There should be no problems with toxicity. You may want to factor in a sun shade into your costing, black tanks in particular get get quite hot.
HDPE tanks were avaialable outside of Katmandu in 2015, though the maximum sizes that I came across were 1,000 litres, and they were expensive. IF the construction is not time critical and the the skills and materials for a ferrocement tank are readily available I would opt for the ferrocement for a tank that size. As I recall these were commonly used by the District Water Offices in rural schemes, and there were established standards in terms of design, material and construction. The standards should be easily available from your DWO, and they are likely to be able to assist with a technician experienced in constructing ferrocement tankls to standard- you will probably need to provide a per-diem.