Retrogressive Bill Compared to Koshi/Gandak Treaties
In order to test if Electricity Bill 2080 is in national interest, a comparison between this Bill and Koshi/Gandak treaties signed in 1950s with India is warranted, which will enable to discern the water resource harnessing policy enshrined in this Bill.
Most of Nepal’s politicos, bureaucrats, intellectuals, etc. mistakenly believe that use of rivers is limited to electricity generation. In reality, important uses of rivers are drinking water, irrigation, animal husbandry and fisheries. Because homo sapiens have survived without electricity since eons and a substantial number of people are still surviving without electricity even now. However, people cannot survive without drinking water and eating, production of food requires water for irrigation. River water is used for irrigation by spatial transfer (diverting river in rainy season) and also by temporal transfer (storing river water in a reservoir behind a dam and releasing it in dry season). From both spatial and temporal transfer, lower riparian areas benefit from flood control and by receiving value added water, both together called positive externalities. There are international precedents under which downstream beneficiary nations have paid upper riparian nations for positive externalities.
In 2020 South Africa paid Lesotho for supplying water at the rate of $ 2.789 million per cumecs. Latter had built physical structures on the Senqu River to supply water to the former under a treaty signed in 1986. Such water is deemed to be value added water.
Similarly, under Columbia Treaty, USA was afforded flood control benefit by Canada, where physical structures were built, and former had paid $ 64 million for 60 years in 1964 to latter for the benefit; the treaty is subject to renewal in 2024. Flood control benefit to lower riparian areas entails negative externalities like inundation of valuable land and involuntary displacement of populace of upper riparian area. This Bill is compared with Koshi/Gandak treaties in the light of these two international precedents below.
Koshi River was renowned as “sorrow of Bihar”. It used to flow near Purnia in Bihar province of India 200 years ago and now it flows near Nirmali, after shifting 133 kilometers east. As it was not possible to build physical structures in India to control floods, she had been trying to build physical structures in Nepal for a long time.
Bir Shamsher Rana, the then Prime Minister of Nepal, had consented to Indian proposal to build a barrage in Chatara in 1897, which got shelved. Again in 1947 the then prime minister of Nepal, Padma Shamsher Rana agreed to allow India to build a barrage near Barahchhetra. This too was not implemented. Finally, first commoner prime minister of Nepal, Matrika Prasad Koirala signed the Koshi treaty in 1954 and under which Koshi River was diverted to irrigate about 1 million hectares in Bihar, and also to control floods there. But there was no provision to irrigate even a small parcel of land in Nepal. While Nepal suffered negative externalities.
Simply because India had invested in the project, she has appropriated positive externalities for 6 decades already without paying a rupee to Nepal. Nepal is still suffering from inundation and involuntary displacement every rainy season, besides the land which is submerged due to the barrage. Hence, this treaty is against Nepal’s national interest.
British India had planned to construct physical structures there to irrigate in UP and Bihar from the Gandak river and control flood in 1874, when Jang Bahadur Rana was prime minister in Nepal; which wasn’t implemented. In 1903 construction of a canal network commenced, when Chandra Shamsher Rana was prime minister in Nepal, which was called Tribeni canal system; it became operational in 1909, but was ineffective. Because without building a barrage in Nepal, spatial transfer of water from Gandak River is not possible. Hence, irrigation from Gandak did not materialize for 9 decades since the time the idea was conceived.
In 1956 Nepal’s prime minister Tanka Prasad Acharya turned down an Indian request to sign the Gandak treaty. When India repeated it to prime minister Dr. K.I. Singh in 1957, he constituted an Enquiry Commission which came up with seventeen conditions, which were inter alia Nepal to have full right on water upstream of the barrage, India to pay Nepal at the rate of one rupee per acre of land irrigated (Nepal expected to earn Rs 2.5 million/year: equivalent to US $ 525,000 at that time, which is equal to US $ 5.75 million at 2023 price level), and so forth. This time India refused.
This treaty was signed in 1959 when B.P. Koirala became Nepal’s first elected prime minister, ignoring the fact that the Acharya government had refused to sign it and the Singh government had imposed 17 conditions. India irrigates 3.4 million hectares. Although Nepal was supposed to receive 40 cusecs to irrigate 143,500 acres (58,000 hectares), we receive very little water, while India also benefits from flood control.
Merely because India bore the cost, she has hogged positive externalities for 6 decades without paying anything to Nepal, while Nepal suffered from negative externalities due to construction of the barrage and suffers more flooding every rainy season. Hence, this treaty too is anti-national.
Only rainy season water is diverted from Koshi and Gandak barrages for irrigation in India. In other words, India receives value added water only in the rainy season (about 4 months) from these barrages.
There is provision for construction of reservoir projects in this Bill. If reservoir projects like Budhi Gandaki, Sapta Koshi High Dam, Karnali Chisapani High Dam are built in Nepal in the guise of hydropower projects, India would stand to receive water not only in the rainy season but also in the dry season (about 8 months). It would mean water would be availed to India for multiple crops, more than 4 crops/year.
Meaning, if this Bill is passed by the parliament without requisite amendments, India would not only benefit from flood control in the rainy season, but also would receive value added water around the year. Unfortunately, there is no provision in the Bill to receive payment for flood control benefit and value added water that India stands to receive in accordance with extant international precedents.
Budhi Gandaki reservoir project, 1,200 MW, can be cited as an example. The value of electricity generated by it would amount to US $ 124.75 million at US 5 cents/kWh, while the value of just lean season augmented flow is US $ 390.5 million per year (Rs 52 billion/year at current exchange rate). Since the Bill is silent about recovering the value of lean season augmented flow from the beneficiary, India stands to receive such value added water for free from this and all reservoir projects.
Similarly, India would also benefit from flood control from most of the reservoir projects that would be built in Nepal. Unfortunately, this Bill is also silent about receiving payment for flood control benefits based on international precedents.
On the other hand, Nepal would suffer from inundation of land and involuntary displacement if reservoir projects are built. But there is no provision in this Bill to receive recompense for such negative externalities from India that benefits from positive externalities. Inundation entails opportunity cost in terms of lost agricultural produce and forest product from inundated agricultural land and forest for the life of the reservoir. Similarly, involuntary displacement will require Nepal to bear the cost of resettlement and rehabilitation.
It becomes obvious from the above discussion that this Bill is not in Nepal’s national interest. Two separate treaties had to be signed to provide flood control and irrigation benefits to India from Koshi and Gandaki rivers. But if this Bill is passed without any amendment, no such treaty will have to be signed and India will receive regulated water not only in the rainy season but also in dry season with the construction of each reservoir project in Nepal, including flood control benefit without having to pay a rupee. India may not even have to invest to receive such positive externalities, if projects were to be built in the lines of Budhi Gandaki at Nepal’s own cost. Therefore, this bill is retrogressive even compared to Koshi and Gandak treaties.
Denounce anti-national activity
The then president of Nepali Congress, B.P. Koirala had denounced Koshi treaty, signed by his elder brother’s government being detrimental to Nepal and Ganesh Man Singh had opined that the treaty amounted to national suicide. When an Indian parliamentary delegation came to visit Nepal to quell the protest, the protesters blocked Kathmandu airport, which was forcibly opened by the army. Number of protesters including Mrigendra Shamsher, a Leader of Gorkha Dal were arrested in this episode. Six months before his death, even Matrika Koirala confessed that the Koshi treaty was detrimental to Nepal.
Gandak treaty was signed when B.P. Koirala was prime minister and Ganesh Man Singh was construction, communication and canal minister; the duo that had denounced the Koshi treaty. The Gandak treaty was also denounced as anti-national and the communist party lodged a complaint with the Indian embassy, called general strike and celebrated black day.
GoN has tabled this Bill which is a lot more damaging to Nepal than Koshi and Gandak treaties. But not a single word of protest was heard in the parliament, neither from the intelligentsia as regards the anti-national nature of this Bill, which is highly surprising. In the 1950s people rose up against Koshi and Gandak treaties. It is surprising that people have been apathetic to anti-national activity in the twenty-first century.
All legislation prepared for promulgation in Nepal should benefit the country, her people and the economy. But it is clear from the above discussion that this Bill is formulated to benefit India and harm Nepal’s national interest. Hope Nepal’s sovereign parliament would not pass this Bill in the present form.
Published in People's Review of November 9, 2023.
Ratna Sansar Shrestha, FCA