Monday, February 7, 2011

RE: FW: RE: Water Electricity

February 8, 2011
Dr Chiran S Thapa

Chiran jee

I have noted with interest that you too have used the suffix "ju" that we, amongst Newar community, use. Thanks.

Thanks a lot for being impressed with my "formidable grasp of water resources." Coming from you, I take it as words of encouragement, although you aren't fully right; I don’t have formidable grasp of water resources in reality. There is lot more than meets the eye. I am merely doing my level best to learn more and also, at the same time, sharing what I am learning; in so doing I am also able to continue with my "crusade".

At another level, compared to some people, you may be right simply because most of those pontificating on the topic (also including those involved in negotiating/bargaining) so far do so with superficial knowledge (I am being charitable to them!) or do so with latent interest of serving Indian interest for "a few silvers" or some other form of quid pro quo. However, I have learnt from my formal and informal Gurus to look at and opine about things with in depth knowledge. Besides, I have also come to learn that in depth knowledge needs to be complemented with bird's eye view. Because what looks like the correct and logical approach looked at the electricity subsector, or water resource sector in isolation may not be actually beneficial for the country's economy if one is able to look at the things with bird's eye view. A good example is providing tax/duty exemption for an export oriented hydropower project; good from the perspective of implementation of the project (deemed “hydropower development”) but economy ends up losing both ways.

I am pleased to be finally dwelling on the "bargaining" issue that you have been wanting me to opine upon since a long time. First of all, it’s not as if that no bargaining has been taking place so far; from Koshi through to Mahakali people have bargained away Nepal’s interest for their personal and/or political interest. People have been bargaining away Nepal’s precious resources for power or pelf or even for just a foreign jaunt, a scholarship or a job for themselves or their near and dear ones. Basically, people have been surrendering Nepal’s interest in the name of bargaining/negotiating. I am sure that you are not referring to this sort of bargaining.

On the other extreme bargaining/negotiating entails/involves strategic planning which should not be prematurely known to the other party on the “table”. Therefore, at this juncture I will not bother you with too much technical details. Meanwhile, before going any further, I would like to record my wish to applaud shrewdness of Indian negotiators (bargainers!) for their success in serving Indian interest to the hilt and also make affectation as if they have been magnanimous with her small neighbor who actually ends up getting a raw deal but people in Nepal go about crowing that they have bettered Indian negotiators (example: Bharat Mohan Adhikari quoting Indians saying that Nepal benefitted disproportionately from Mahakali treaty in his book). I don’t expect Nepali negotiators to replicate Indian skill in this respect but they should vie to ensure that Nepal gets a fair deal or a level playing field is availed to Nepal; neither a paisa more nor a paisa less but what Nepal is entitled to. Basically, bargaining/negotiating shouldn’t mean/entail compromising national interest, nor expect magnanimity from the other side. In saying all this I am not “begging” for Indian magnanimity.

I will now attempt to highlight important points in bargaining/negotiating with respect to a specific project. As I lack necessary technical details on Naumure project (I am working on collecting/collating it) at this point, I will use another project, west Seti, as an example to drive my point home. Following are the positive externalities of this project:

• generates 3,636 gigawatt-hours (GWh) peak-in (good quality) power at low cost (project feasible even if it is priced at US 5 ¢); avoided cost of such power is more than 25 US ¢
• Results in flood control in lower riparian areas, including India.
• Generates 90 m3/s of augmented flow in dry season (this isn’t the water deemed to be flowing “wastefully” wet season that also creates havoc of flood) worth Rs 5.833 billion per annum
• Results net offset of 3.45 million tons of CO2 worth Rs 2.59 billion per annum.

This project results in following negative externalities:

• Inundation/submergence of 3,004 ha land in project area.
• Additional inundation/submergence of 1,630 ha land completely and 645 ha partially in Banke due to Laxmanpur barrage built by India.
• displaces 18,269 people in project area
• additional displaces 15,174 people in Banke

In the above backdrop, my preferences are as follows from Nepal’s national interest (am prepared to bargain for either of following scenarios):

It should be built as a multipurpose project in order to irrigate land in Nepal and the dam height should be fixed (reduced) according to irrigation need of cultivable land in Nepal, such that the inundation/submergence of land in Nepal will be commensurate to the extent of Nepal’s irrigation requirement only. The electricity should be used to meet Nepal’s need of peak-in energy demand and export only excess energy to India.

Alternately, it could be built as conceived on the condition that India agrees to pay for augmented flow and carbon offset. By way of negotiation, Nepal can consider forgoing payment for flood control benefit in India from this project (Canada does receive payment for flood control from USA under Columbia treaty).

Negotiation on the above lines should be taken as one time and non-precedent setting.

Contrasted with you I don’t believe in bargaining away consumptive use of water for irrigation for benefit from hydropower. Because the quantum of benefit from electricity export will be very limited compared to irrigation, carbon offset and flood control benefit.

Finally I agree with you that flexibility should be combined with principles but I don’t like being flexible at the cost of Nepal’s national interest.

With best regards,


Ratna Sansar Shrestha, FCA
Senior Water Resource Analyst

-----Original Message-----

From: C.S. Thapa [] On Behalf Of C.S. Thapa
Sent: Saturday, January 29, 2011 11:12
To: Ratna Sansar Shrestha
Subject: Re: FW: {Disarmed} RE: Water Electricity
Ratna Sansarju,

Much as I am impessed with your formidable grasp of water resources, I keep on hoping that, particularly with your chartered acctant background, you would focus on realistic 'bargainng'. You could start with our neighbour's offer of gifting the Naumure project. Can we have both Naumure and irrigation of Kapilvastu or contribute a part of our own resources toward Naumure in lieu of irrigation of Kapilvastu - where is the bargan we can strike in development of hydroelectricity and consumptive use of water for irrigation?

Flexibility has to be combined with the best of principles.



On Jan 29 2011, Ratna Sansar Shrestha wrote:

Tilak ju

No need to feel sorry.

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