Thursday, January 28, 2010

[NNSD] Nepal's water resource sector, Pancheshar project and Nepal's future

This scribe is resigned to being the most misunderstood person by a big section of Nepali populace because when he writes critical articles, as he is wont to, people brand him “anti development.” But there are a few that seem to understand what he is trying to do; be positively critical. However, even amongst this group there are people whom this scribe has not succeeded to get the message across that it is possible to harness our enormous hydropower potential (actually the water resources) to our benefit during our lifetime. They have started to believe that there is no mega project which is feasible enough that would benefit Nepal more. This made him feel that he has succeeded only partly and the lesson that he has learnt from this is that he needs to be further clear; say things more explicitly and without mincing words, even bluntly (which makes some people uncomfortable due to the tone and tenor of the writings; in order to ensure that the hydrocracy gets the message).

He has written lengthy articles on optimum exploitation of the water resources to Nepal’s benefit, which need not be repeated here (already available in his blog). He firmly believes that it is possible to turn around this country and water resource can be the DRIVER for all this; metamorphosis of Nepal is possible if water resource, not just hydropower, sector is correctly handled. As regards the question of whether it will be possible depends on answers to a range of questions like:

* What kind of leadership (with proper vision or like the current crop of leaders that we have to bear with) we chose? We need to remember that we, “the people,” deserve to be blamed for the rottenness of the leadership as “people get the leadership they deserve.” People need to speak up loudly and clearly so that they are heard as well as understood. We need to ensure that we are heard more resoundingly; forcing the leadership to get their act together. We need to emulate what PEOPLE did in Bangkok and Manila.

* What type of policies they formulate? He has written many articles on the subject. As long as we have policy, for example, geared to solve load shedding problem in India, instead of Nepal, we will continue to have load shedding in Nepal and nobody should be surprised by this. If a parent feeds the limited food available to the members of another family, then it will not be surprising if his family has to go hungry. If this crop of leaders do not understand this, then it is futile to expect anything from them.

* Whether the policies (only if appropriate) will be sincerely implemented. We, unfortunately, have a track record of policies getting distorted during implementation and in such circumstance; even good policies will throw up bad result.

* Whether we will have institutional mechanism conducive for the purpose. We are now looking at institutions created to fit the kith and kin of the leadership (to generate employment for them) instead of being instrumental in the formulation of sound policies and implementation thereof.

* Whether there will be investment friendly environment. 9th five year plan targeted to add 293 MW in the system and it actually succeeded to add 268 MW (91.5% achievement – an unprecedented success so far and will be rare in future too) but during 10th plan only 40 MW was added while the target was 314 MW, a case of plan failure. The single biggest problem behind it was lack of investment friendly environment due to Maoists insurgency and political instability, including law and order problem.

* Whether currently rampant corruption will continue to rule (some people opine that a minimum level of corruption is unavoidable and actually works as lubricant for things to move smoothly). It seems that Nepal has become a haven for corrupt people; not just Nepali people, but we seem to have magnetic force that attracts corrupt people from all over the world.

* and ….

Reading my latest article on Pancheshwar people have jumped to the conclusion that “there is no mega project which is feasible enough that would benefit Nepal more.” This is not correct. It’s merely a matter of how the project is structured and packaged. We can structure and package even Pancheshwar project for the larger benefit of Nepal and Nepali. A simple table below should be able to drive the point home. The cost and benefit of this project gets apportioned as follows under current structure and packaging of this project:

This scribe is against implementation of this project due to lop sided distribution of cost and benefit; Nepal to bear cost (in terms of inundation and displacement) more than commensurate benefit (accruing from flood control and augmented flow). In the computation of cost benefit analysis above, electricity is neutral as Nepal is to benefit from it in proportion to her investment. Besides, it’s not prudent for a country like Nepal to invest Rs 111 billion of its scarce resources to alleviate load shedding problem in India.

There are two options with regards to how should this project be structured and packaged to optimize benefit for Nepal:

Option one: we can implement this project as it is, if India agrees to recompense Nepal for additional benefit from flood control and augmented flow that she gets more than one-half share that she is entitled to. Following the principle set forth in the agreement between Lesotho and South Africa, India will have to pay Rs 17 billion per year as she stands to get over 200 m3/s of water belonging to Nepal; the reference here is not the water during rainy season but water stored in the reservoir built by submerging Nepal’s land and displacing Nepali people. Assuming that annual flood control benefit is worth Rs 3 billion (authorities have yet to release data about it); India will have to pay to Nepal Rs 1.2 billion/year (for 40% that belongs to Nepal) on this account. The total revenue stream as such of 6 years will suffice to invest in this project expected to cost Rs 111 billion to Nepal; without having to mobilize funding by Nepal.

Option two: if the above formula is unacceptable to India, then the project should be downsized to just enable it to store enough water to irrigate 93,000 hectares land on Nepal’s side which will bring down the submergence in Nepal to about 1,000 hectares only and commensurate reduction in displacement of people in Nepal will also occur.

People also use the term “India phobia” in this context and current energy minister, Dr Mahat also used it in a parliamentary committee hearing where his scribe was invited as an “expert”. This scribe has not written as such because of any such complex. These articles have been written for the love of motherland. Our politicos misled Nepali people saying that with the signing of Mahakali treaty (hence this project too) Nepal has gained as the principle of equality was enshrined in this treaty. Unfortunately, there is no equality as has been pointed out above. Therefore, this scribe is critical of this treaty and the project. Not because of India phobia. People have also referred to “fear psychosis” about mega projects. That is not true at all. There is no need to fear mega projects, nor to have any such psychosis. But benefit commensurate to cost (entire life cycle cost, not just financial investment but also cost in terms of human displacement and submergence of Nepal’s land) is what we should seek.

People say that we need to learn from Bhutan. Bhutan model is successful in Bhutan because she is Bhutan – a protectorate of India – and will not be successful in Nepal. Simple reason is India takes care of her security which also means hydropower projects there are secured by India. Same will not be possible in Nepal simply because we cannot have Indian security force on our soil; although we already have them in Koshi and Gandak project from where they needs to be evicted forthwith. There is already Indian design to have Indian security force stationed in Kathmandu, manifest in Hisila Yami, in the capacity of tourism minister, reportedly agreeing to station Indian security at our international airport. This scribe has written a number of articles on this subjects which have been uploaded in his blog.

People also lament the cancellation of Arun III project in 1995 and blamed UML for it. This scribe firmly believes that Nepal was fortunate to have this project cancelled at that time and UML doesn’t deserve the credit for Nepal’s good fortune as such. GoN is again trying to do disservice to Nepal by planning to implement it such that load shedding in India will be mitigated and leave Nepal in the darkness. An in-depth analysis about it done by this scribe can be perused by following the link below:

With best regards,


Ratna Sansar Shrestha

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