Big dams, Bad economics.
Why build high dams if you're going to waste water and electricity?
On 5 and 6 April 1997, six hundred activists from all over Bihar and various parts of India gathered at the small hamlet of Nirmali, fast by the banks of the Kosi in north Bihar. They had come together to protest a process that had begun 50 years earlier at this very place the selling of fantastic dreams.
On 6 April 1947, politicians and technocrats from Patna and Delhi had assembled at Nirmali to announce a high dam on the Kosi, at a site some miles upstream in the hills of Nepal. The 230-metre engineering wonder would rid Bihar of its woe of flood and provide "regulated" water for year-round irrigation. The Kosi would be converted from a river of sorrow to a watercourse of hope.
The Kosi High mantra is still being chanted by politicians and technocrats today, even though over the half century the public has transformed from gullible consumers of development dreams to people who will study their own interest in what the politicians, bureaucrats and businessmen/contractors promise. Big dams, wide highways, and large industries do not necessarily leave them salivating any more. The public now knows to look a gift dam in the mouth, but in their oblivious arrogance power brokers continue to promise the panacea of high dams to the floodplain residents everywhere.
When the state and establishment raided their fields, forests and valleys in earlier decades saying they had to suffer for the sake of the common good, the peasantry was at a loss to react. Today, however, there is awareness and reaction everywhere, with the villagers able to use the law, academia and public sympathy to their advantage. The poorest peasants today know that water and energy have been mismanaged by the Sarkar, although they may not fully understand the ungainly model that is riddled with pilferage and inefficiency.
The urban population of India has expanded manifold over the last five decades. This population demands reliability in its drinking water and energy supply. The same is true for the middle-class peasantry which needs electricity to run tubewells for irrigation. But the electricity grid is just as inefficient as the canal systems of India. And so the politicians, bureaucrats and engineers choose what was till very recently the path of least resistance – construct dams, barrages and reservoirs.
The establishment, so used to riding roughshod over local sensibilities, has been unable to respond to the changed context. It has not yet even begun to consider the only two solutions available: firstly, conserve water and energy in the plains; secondly, when demand is still not satiated, negotiate fair payment for water and energy used with the upstream "stakeholders". Until the establishment makes this adjustment to its worldview and tactics, dam projects will continue to flounder from the Narmada basin to the Himalayan valleys. The public now knows, and until the power brokers know that it knows, and responds accordingly, there is no high dam going to be built on the Kosi or any other river.
Evolution of a paradigm
There was a time when South Asians knew how to manage water skilfully, as one can see from Sri Lanka and the weirs constructed in South India by the Chola Kings to divert river water into artificial tanks. It was the colonial period, however, which shaped the region´s modern-day approach to water management. The British, without any experience of barrage-building on their own rivers, opened up the Subcontinent to what is called the American model of massive impoundment, which had evolved in the United States in the early years of the century.
Many of the storage projects in India were built after the British had left, but the technology should never have been transplanted blindly. The North American terrain and society where the model was developed were quite different from South Asia´s. The rivers there carry relatively little silt in comparison to the Himalayan torrents; the demography of water and electricity consumers itself was quite different; and the New World was hardly likely to see anti-dam activism when the native populations had been decimated.
In the colonial era and even later, the canals and barrages ´succeeded´ mainly because of the political hegemony of the managerial class. The management of large water infrastructures was guided by three objectives: revenue generation, administrative control and protective irrigation. Independence came, but the new rulers not only inherited a civil service but also the legal arrangements of the earlier era, some of which contradicted the very democratic aspirations fostered by self-rule. The Canal Act enacted in the 1870s, for example, gave sweeping and centralised powers to the Irrigation Department, which could ignore the farmers´ sentiments with impunity.
In pre- and immediately post-independence India, resource-management decisions were dominated by the peddlers of technology. Inherited water development models were pushed without much reference to social realities. The path to national development began with the conceptualisation and construction of projects like Bhakra Nangal, Hirakud and the Damodar Valley Corporation. Several barrages, which include the Farakka, Kosi, Gandak, and Girjapur were built, all between 1950-1970, on the Sapta Kosi, Narayani, and Karnali rivers, copying the Sarada Barrage model, built by the British on the Mahakali in 1920.
In the later years, economics, equity and even technology were sacrificed on the altar of populism. There are cases aplenty to prove the point. Only a few years ago, the new government in prosperous Punjab promised its farmers water and energy for free. In Andhra Pradesh, power which costs INR 2.85 per unit to generate is sold to farmers at 13 paisa, prompting Chief Minister Chandrababu Naidu to remark, "What more do the people want?"
It was not long before a socially aware, vocal and articulate lobby emerged to highlight the aspects neglected by the state-guided path to national wellbeing. This lobby emerged from the accumulation of painful experiences in the shadow of the 1600 dams and barrages that have been built in India over the course of the century. These include the pain of those evicted from dam and reservoir sites, the suffering of those left within embankments at the mercy of the flood, and the uncalculated devastation wrought across the land by waterlogging and salination. The activists who spoke for the people refused to be dazzled by the sweep and curve of concrete, or be carried away by the sight of a full reservoir reaching far into the horizon. Government was in trouble.
Well, well, well
And so the activists challenged high dams on the basis of social equity; ecologists contested them on environmental grounds; and seismologists on the very instability of the ground. But the strongest ammunition against the high dam is economic.
Big dams as they are presently formulated and sought to be built simply ignore market principles. They are too quick to generate supply even when the demand is ´fake´. For, when discussing the economics of water and energy, there is no getting away from the wastage and leakage, nor the fact that the high urban and rural demand is propped up by subsidies. And there is no ignoring ground-water: a primary reason to dam rivers in the hills today is so that the farmers of the plains can extract groundwater. This dam-to-tubewell linkage is very real, but rarely discussed.
Indeed, much of India´s success in food self-sufficiency over the decades is ascribed to the emergence of mechanised pumps which pull up water from underground tables for use in agriculture. In order to make this resource available to peasantry all over, both the central and state governments have seized every opportunity to extend rural electrification, providing subsidies for purchase of pumps and laying flat tariff rates for electricity. There is a Million Wells Scheme in place today, under which small and marginal farmers can own their own pumps.
The cost of pumping is thus made negligible in comparison to the cost of electricity production, which leads to profligate use and high wastage, both of electricity and of the precious aquifers. Wells dry up, and salinity invades the underground tables. More significantly, however, the populist policy of subsidised access and flat tariff delivers a highly rigid system that no politician seeking public office dares meddle with. A well-intentioned measure soon becomes unrecognisable, a mass-based boondoggle.
Between 1970 and the mid-1990s, there was a quantum jump in the power consumed by Indian agriculture, from a mere 6 percent of the national electricity consumption to nearly 40 percent. The low operating efficiency of pumps availiable in the market – less than 15 percent compared to an achievable 60 percent -made electricity use conspicuously wasteful. The blatant thefts, under-pricing and high "technical losses" (in transmission and distribution) have created what looks 1 like an unbridgeable gap between the supply of and the demand for energy.
The gap between generation volume and the amount of electricity available itself is quite large. Writes B.S.K. Naidu, Director of winrock, India´s energy programme: "We generate 4 kwh of electricity for end use of 1 kwh, 25 percent being transmission losses, and 66.7 percent end conversion losses." The upshot of such an arrangement, according to government estimates, was commercial losses amounting to INR 40 billion in 1991-92. By 1996-97, this figure had skyrocketed to INR 109.41 billion.
The handmaidens of malfeasance and maladministration in all this are the state electricity boards of each of the Indian states, which have been used by the political class as the agencies to placate the water- and electricity-using public.
200 million toilets
Besides mechanised pumps for ground water, the other major consumer of power in India is the rapidly expanding urban population and, within it, the multiplying middle class. The growth of demand has occurred with very little thought to wastage and the need to pay fairly for the supply. Hellbent upon emulating a Western lifestyle in South Asia, as now shown on television, the middle class is given to ever-more intensive use of water and electricity, in its air-conditioners, refrigerators, bathtubs and toilet cisterns. The demand for water and power is set to just grow and grow.
Unlike drinking water, consumerist demands for water and electricity are highly income elastic. One can imagine what will happen to demand for water when the additional 200 million homes in the Ganga plain begin to use the flush toilet, which converts 15 litres of treated water into sewage at the turn of a handle. This alone would require a storage reservoir in the Himalaya all by itself. There is no economic justification for not introducing the market principle into the pricing of water and power.
The demand for high dams, thus, is the result of bad economics and unrepresentative politics, reflecting a situation where no one wants to tamper with the vote. It has not helped that these macro issues relating to poor targetting and leakage in subsidy have never been highlighted by the mainstream media, nor by activists who have tended to pay attention only to equity and environmental issues.
Projecting the rise in population, agriculture and industrial demands as well as household use as the population gentrifies, one estimate has it that there will be a 20,000 megawatt shortfall in the North Indian Grid by the year 2020. There is no way out but to produce more energy, say the planners. Thus, the path to bridge the supply and demand gap of water and energy is seen to have only one formula, and that is "augmentation of supply". There is apparently no consideration of the fact that correct and market-based pricing structure would lower consumption and hence demand. The demand for power and water is artificial because it would not exist if the pricing were realistic. In fact, at zero price, demand would be infinite constrained only by the physical limit to consumption.
Without management of both demand and supply, forecast of future demand merely reflects the position of those making the projection. It simply becomes an elegant statement of how the forecaster feels the world "ought to be". One thing is clear, besides the fact that existing projections of power and water demand are just too far off the mark to justify the investment of billions of dollars to augment supply, building high dams to provide water and electricity at present would be doing nothing more than rewarding the profligate.
Nature of debate
The entire debate with regard to water and energy policy in India has been waylaid because of the diversionary option of large vs small. That is not where the discussion should rest, for the answer lies in correct economics rather than in being a pure breed environmentalist or marketeer. Instead, even those who prefer to discuss the genuine issues of energy and water are often pegged into predetermined slots as those for or against large dams.
On the one hand is the mainstream political system, its functionaries and minions, whose analytical framework treats burgeoning population as a given, and the time-proven path of "augmentation of supply" as the only option to fulfill water and energy needs. This is the hierarchical model of business as usual, buttressed by the business interests that gain from the building of large structures with rocks, steel and concrete. Speaking the language of extreme real-politik, they will confide that even though they understand that subsidies, for example, are only palliatives, the system itself is powerless to do anything about it.
At the other extreme stands the egalitarian critique of large-scale water development as a path based on excessive and unsustainable consumption. High social costs, environmental disruptions, risks due to seismicity, and excessive sedimentation are used as forceful arguments against the chosen path, by activists such as Sundar Lal Bahuguna, Medha Patkar and sympathetic scholars who recommend that local people try to stop projects in any which way they can.
Instead of synergism, there is tension between the activists and scholars who speak of equity, efficiency and ecology in water and energy management, and the political, bureaucratic and engineering leadership. In this highly acrimonious debate few are addressing the highly inefficient end use and uncertainty of supply.
Future pathways
When it comes to power, how can new dams in the hills be justified when only a third of the total energy that is generated presently reaches the end user. It would be more rational to first deal with the existing massive loss before thinking of building dams.
There is then the question of curtailing demand by pricing the energy and water according to the cost of production. Indeed, high dams could be built and need to be built (seismic, environmental, social and other concerns having been addressed) as long as the demand is not artificial, and as long as the locals in the hills are able to negotiate from a position of strength for maximum benefit.
In the meantime, there are options. On the energy front, reducing pilferage and tariff rationalisation alone can save almost 4000-5000 MW from within India´s existing supply system. This is equivalent to some of the large storage dams proposed. Vigorous end-use conservation measures, and grid management would bring additional gains.
Plugging leaks and promoting efficiency in water use through a policy of proper targeting of subsidy, and tariff that reflect the actual social and environmental cost would finally rationalise demand. Water consumption could also be reduced through, for example, promoting affordable low-volume flush cisterns. In the urban and industrial sectors, conservation and recycling would also make a dent in the demand.
These suggestions seem Utopian when one looks at the political reality in the plains – made that much more stark during this election season. But there is no way around it: institutional innovation must be made in water and energy management. We must, for the moment, emphasise scarcity instead of plenitude, rehabilitation instead of new construction and institutions instead of technology. Governments, first of all, must invert the current hierarchy of users so that those who expropriate water and energy supplies are made to pay the price.
The real issue about the management of water and energy in India is therefore about how these challenges are met. It is about bringing back an accountable and visionary body politic that seeks and promotes solutions that upturns the status quo. The over-consumptive approach that is steamrolling all of India, and also its neighbours, is most unhealthy.