Nepal’s population as a whole harbours the dream of achieving wealth utilising the country’s water resource. As for the political leadership, it desperately wants to make this a reality by building high dams, exporting electricity to India and thus earning millions. This desperation is evident in the words of five-time and current prime minister, Girija Prasad Koirala, “I would like to see not water but dollars flowing through the watercourses of Nepal.” Or as the long-time minister of water affairs under the Panchayat regime and later, Pashupati Shumshere Rana, likes to say, “Once the Mahakali Treaty is implemented and the Pancheswar Project is built, the sun will start rising from the west.” A decade ago, the Mahakali Treaty had been signed by a minority government and endorsed by an otherwise divided Parliament. The exceptional cooperative spirit exhibited by the parliamentary parties at that time has rarely surfaced before or after that treaty.
Across the border, Indian politicians are equally attracted by the prospect of exploiting and managing Nepal’s rivers. Over the last two months, Nitish Kumar and Mayawati, chief ministers of Bihar and Uttar Pradesh have, after visiting the areas submerged by this year’s extraordinary floods, asked the Centre to seek a permanent solution to the flooding by having dams and reservoirs built in Nepal. On occasions when it is pressed thus, New Delhi’s standard response has been, and was, “We are talking to Nepal”. And the talks have in fact taken place for years and years, after which there have been treaties, understandings and detailed studies of proposed projects. But strangely, after five decades, not a single cooperative project of that nature has so far been implemented.
There is no escaping India when talking about utilising Nepal’s water resource, but this is not so only because India is a lower-riparian country with interest in any upstream project. Indeed, the very foundation of Nepal’s water resource planning, its estimates, projections and exploitation strategies, are built on India’s market, its interests and priorities, as well as its financial and technical capabilities. The fact that those rivers which are best suited to India’s flood control, irrigation and energy needs were the first to be studied proves the tie that binds Nepal’s water resource to the Indian political economy. A joint Indo-Nepal team of experts has for the last four years been engaged in a field study of the proposed Kosi High Dam, which was first mooted before India achieved independence in 1947. The study report of the 10,000 megawatt Karnali-Chisapani project is gathering dust these past two decades. Similarly, a decade has passed since the study of the Mahakali-Pancheswar Multipurpose Project was complete and the Mahakali Treaty signed.
For all these detailed studies of India-oriented projects, there has been no methodical attempt to study the electricity, irrigation and other water needs to support the Nepali population on a daily basis. Indeed, Nepali consumers have no hope of directly benefiting from the projects that are the most talked about, whereas the rivers that they hope to utilise for their own benefit have been little studied. This neglect also applies to the Indian populations in the border region, for the scores of rivers which traverse the open frontier from Nepal to India are similarly neglected by both governments. Citizens who could benefit from, or alternatively are harmed by these small water courses, find their interests sidelined in the overwhelming focus on mega-projects for the larger Indian market.
It is clear that there are deep contradictions that afflict the Nepal-India hydro-relationship. The political leadership of the two countries seems ever-ready to build high dams, complex irrigation networks, and massive power houses, and the bureaucrats and technocrats from the two sides are forever putting the finishing touches to one project after another. Neither does it look like the demand for electricity in Uttar Pradesh and Bihar is going to be filled by any other source of energy. The levels of poverty in the two states are also not declining, and the fear is of a massive migration of the rural poor to Delhi and Bombay. Even so, why do Kathmandu and New Delhi only talk and why do the related projects never get implemented? The answer lies not at a particular river or project, but in the domestic political considerations that guide Kathmandu and New Delhi, where priorities are decided not by the demands of the populace on either side of the border but on deeper economic-political-social and strategic considerations.
The hope in the heart of every urban Nepali is to become rich quickly, like Bhutan, by exporting hydroelectricity to India. But this desire is not without conditions, and it is not backed by a proactive attitude. True, they see many lacunae in the hydropower agreements signed by Thimphu, but then the officials cannot find fault with every model, every potential investor, every suggested arrangement, and not come up with any suggestions of their own. When the talks on any project near fruition and the time for implementation arrives, it is then that the technical and economic feasibility surveys are brushed aside, and their space occupied by jingoistic rhetoric. Politics and populism quickly engulfs the project, documents are shelved and the Nepali negotiators go home, having kept the national flag waving but have got nothing for the people in the bargain. The chauvinistic nationalism espoused by King Mahendra (under whose reign the Kosi and Gandak barrage treaties were signed) following his anti-democratic putsch in 1960 has unfortunately remained the lodestone of Nepal’s hydropower sector since.
This self-defeating patriotism has struck such deep roots in the minds of Kathmandu’s intelligentsia and political practitioners alike that it is impossible to develop acumen in management, negotiation and proactive diplomacy, or to develop a long-term research and analysis agenda. As a result, it is hard to find the politician, bureaucrat, technocrat, diplomat, journalist or member of civil society who is willing to face the accusation of ‘traitor’ while seeking what is good for the country. This, then, is the conclusion from studying four decades of Nepal’s hydro history – the waters keep rushing downhill, and the people of Nepal remain as poor as ever.
One reason for the surfeit of scepticism among the public when it comes to dam projects, is that this sector for years was monopolised by a few powerful bosses and families. And the doubt and anger is not limited to projects being implemented by India or with Indian investment. Projects with the involvement of Australia, Norway, the US, Japan and the World Bank also find themselves in similar quagmires of distrust. Take for example the controversial 750 MW West Seti project, which is currently in the news. Thirteen years after the project promoter, Snowy Mountain [Corporation] of Australia, got its license from the Nepal government in 1994, it finally managed to obtain a power purchase agreement (PPA) with India. Snowy Mountain was then able to get the Asian Development Bank, the Chinese and others to come in as financiers, but then the chorus of opposition began as it always does – from the Nepali media, intellectuals, water resource experts and local inhabitants in the Seti region of the west. The main point of concern among all those suddenly interested, is whether the West Seti project is in the “national interest”.
Without doubt there are kernels of truth in every argument for and against West Seti. There is the environmental impact of the 187 m high dam to be considered, and the high value of stored water that can be used as per demand is certainly not transferred to Nepal by the agreement to provide only 10 percent (or 75 MW). This cannot be considered a satisfactory outcome, for Indian private sector developers in Himachal Pradesh are already providing 12 percent electricity for free, and this is becoming the minimum cut-off rate. Further, experts estimate that the West Seti project will increase the dry-season flow of the Karnali (into which the Seti flows) by 40 percent, all of which will be utilised by India’s agriculture through the Sarayu-Sharada Sahayak irrigation canals. Because of the absence of any irrigation structures in Nepal to use the waters of the Karnali, it will be many years before the Nepali peasant can expect to utilise the value-added water emanating from the West Seti sluices. Undoubtedly, Nepal has been short-changed by the West Seti project.
On the other hand, the argument of those who urge building that dam as quickly as possible also seems logical. They know that it was the Kathmandu authorities who gave away the license to West Seti to foreign investors without adequately considering the environmental implications and downstream benefits that would accrue to India. Yet, they claim that the project will help Nepal, arguing that the market for Nepali water and hydroelectricity is, and will remain, India. If India is unwilling to buy, Nepal can never gather the required financing. And New Delhi’s policy till now has been not to buy electricity from free-standing power projects over which it has no control.
The Arun-III project, planned two decades ago as a 402 MW project with the help of the World Bank and Western bilateral aid agencies was brought down to a 201 MW endeavour because of Indian rejection of the electricity offer (in the end the project was shelved because the World Bank could not answer an economic challenge made by activists). On the 650 MW Budi Gandaki, a bilateral understanding was reached back in 1991 that it would be built only with Indian investment. The proposed 360 MW Upper Karnali project was under discussion till a couple of years ago, but then upon Indian government pressure the license for the project was transferred by Kathmandu authorities from the Reliance group of India to the government-owned National Hydropower Corporation (NHPC). None of these projects have proceeded, primarily because of the Indian concerns about security – New Delhi authorities repeat the refrain that they cannot trust the security situation for expensive projects. This need for security harks back to colonial times when the British exchanged 4000 acres on the Mahakali riverside in order to keep the Sharada project completely within their area and control. In line with its security concerns, India managed to place two great barrages on its rivers – the Kosi and Gandaki – on the border, and also retained the right to manage the sluices.
India has now indicated its readiness buy electricity from West Seti. The supporters of the project present this as a change in India’s traditional policy towards projects in Nepal. (Following late in the footsteps of the West Seti project, many Indian private companies are presently queuing up at the Ministry of Water Resources in Kathmandu to pick choice power projects in the remote outreaches). Situated in the hilly hinterland of western Nepal and under Nepali security, this power station would provide significant ‘peaking power’ worth 750 MW to the north Indian electricity grid. With West Seti electricity now allowed to flow down to join the Indian grid, it is possible that projects that were languishing due to lack of access to the Indian market will get a new lease of life – Arun-III, Budi Gandaki, Upper Karnali and a dozen other proposals. This turn of events can also be attributed to India’s growing confidence about Nepal’s political process and associated internal security, a confidence that Nepali opinion-makers have waited for five decades to develop. This might also be an indication of a change in India’s stance on ‘Himalayan security’ in the post-Cold War era.
Need for re-evaluation
Millions of people in Nepal and India, living with the hope that the river waters could improve their future, have not been able to extricate themselves from the morass of poverty, hunger and ill health. The fault for not utilising the watercourse to raise the people’s living standards goes to the weak-kneed, myopic, un-learned and egotistic political leadership in both countries. We should not fail the people now, and for this we must draw on the excruciating experience of the past 50 years. What Nepal should learn from half a century of deadlock is that the people will not benefit by allowing the rivers to flow unimpeded, and, second, it must accept India as the primary market for the efficient export of Nepali waters.
Indian authorities, for their part, should introspect about what has kept Bihar and Uttar Pradesh villages dark and electricity-less all these years, and why the population remains at the mercy of floods. What the politicians and bureaucrats have failed to appreciate is that Nepal is a country as sovereign as India, more so than one-time Sikkim and present-day Bhutan, and India cannot expect to promote water projects that benefit both countries without duly recognising the equal status of Nepal in political, economic and security matters. Howsoever weak Nepal may be as a neighbour in terms of economic strength, geopolitics and technical capacity, New Delhi must recognise that flood control in Bihar and Purbanchal (eastern UP), as well as agricultural and industrial advance in these regions will not be possible without generating trust in Kathmandu.
The construction of levees and embankments along dozens of rivers and streams just south of the Tarai border is a case in point, to indicate Nepali sensitivities that are not sufficiently appreciated in New Delhi. While it is true that these constructions are made by local authorities, the Indian government has not been sufficiently alert to the fact that when waters inundate the upstream region, it not only raises hackles in the smaller neighbour; but also generates prejudiced reportage as a concerted ‘Indian conspiracy’ to keep Nepal down. The issue of border-side construction can enable New Delhi to develop an understanding that can nuance the cooperation on the large dam and reservoir projects of the future. For this, there is a need for Nepal and India to re-evaluate and update their traditional policies regarding each other. As a preliminary step, Nepal needs to rethink it’s own water strategy.
Dam, no dam
Dams are a part and parcel of any discussion of Nepal’s water wealth. Southasia is home to several anti-dam campaigns, which sprang up in the West after all possible rivers had in fact been dammed. To that extent, there has been a top-down opposition to water projects that are based on unrealistic environmental arguments. But the fact is that the negative attitude among the public at large towards dams, embankments and irrigation canals has less to do with the anti-dam environmental positions and more to do with the unsuccessful network of canals and embankments in north Bihar for instance, that have neither saved the populace from floods nor promoted agricultural production. Instead, large fertile tracts have been converted to wasteland through waterlogging created by canals and embankments, which both feed the water and prevent runoff. It should not be surprising if the impoverished Bihari masses who have become labour migrants due to canals and embankments turn against the idea of more technical fixes favoured by politicians and engineers.
The fact is, dams and embankments are not good or bad in themselves. What is important is why they are built and how they are managed. It would be extremism to claim that dams should never be built in Nepal, or that every river must be encased in dams. Without dams of a certain height, it will be impossible to bring benefits of irrigation, flood control and energy. Even though some loud-talking pundits like to claim that Nepal has the second largest hydropower potential in the world after Brazil, the fact is that the dry-season flow in the mountain rivers is so scanty that their volume cannot even feed the national demand for irrigation, and perhaps even electricity. It is essential to re-direct Nepal’s water policy to make it open to dam-and-reservoir schemes, so as to be able to conserve the massive monsoonal largesse for use during the lean season. When agriculture needs irrigation the most, from February to May, is when the rivers are at their lowest. Reservoirs will provide year-around electricity and irrigation, and support flood-control during the summer months – this understanding must guide policy planners in Kathmandu in the years to come, both to take advantage of the water wealth of the country as well as to go into a mature relationship with India.
Furthermore, whether it is to be a dam project or any other, decisions should be taken after analysing the total cost and the total benefit, including not only economic and financial considerations, but also the cost-benefits on the social, cultural, geostrategic, national and local levels. Indeed, it is not enough to say ‘benefit’, but to define ‘benefit to whom?’
Take West Seti – if all the electricity from the river is to be exported to India, all the income in dollars and rupees is to fatten individual bank accounts in Kathmandu, and if the locals of Doti-Dadeldhura districts are to console themselves with gawking at the high dam and transmission towers, then it is certain that such a project should never be allowed to go ahead. It is indeed a ‘new Nepal’ being born out there, and such inequities will not allow a river-exploitation project to proceed. The faster the policy-planners in Kathmandu and New Delhi, as well as the international promoters, recognise this fact, the quicker Nepal’s water wealth will be up for utilisation for the benefit of all.
All said and done, however, whether high dams are to come up on the big rivers of Nepal will depend upon the policy of the Indian government and the attitude of its officials. For all practical purposes, until New Delhi is willing to share the benefits of stored water behind high dams in Nepal, a pro-dam environment cannot develop in Nepal and there will be no interest in Kathmandu. The deep river valleys of Nepal certainly offer attractive and appropriate locales for high dams, to save monsoon water, to general electricity, to irrigate, and ameliorate floods. On the other had, the river valleys are the source of livelihood of hundreds of thousands of inhabitants. Even if on occasion the villages might be located on the hill flanks, the source of food and income are the fields of the besi, or valley floor. It will be ethically unsound and practically impossible to contemplate massive dams and reservoirs without first addressing the concerns of the hill inhabitants who would lose livelihoods and traditions. And the day India is willing to share the downstream benefits – in flood control and irrigation – of river projects in Nepal these challenges will move towards resolution. In other words, even though Nepal may seem to be the spoiler in addressing India’s needs, the key to flood-control, irrigation and electricity via high dams lies not in Kathmandu but Delhi.
For the Indian political leadership to seek genuine resolution, what is required is a shift from perceiving Nepal and its water resources as did the colonial administrators before 1947. The time lag between the Nepali people’s rise in self-awareness and official Indian attitudes must change, and the responsibility for this lies with the latter. Half the problems will be solved when this realisation enters the corridors of power in New Delhi, and the Nepali leadership can help the former achieve this new understanding.
In the newly developing situation, with democracy and the people’s mandate, Kathmandu’s administrators and concerned civil society should be able to place the national needs, priorities and expectations before the Indian public rather than be supplicants before the Government of India. It will not be difficult to convince the liberal, open-minded opinion-makers in India that stability and progress in Nepal are also to India’s benefit. It is Nepal’s failure to take advantage of India’s open society that has allowed the narrow-minded Indian bureaucracy to dominate the bilateral relationship.
Of course, before Kathmandu approaches New Delhi with proposals for a new, equal relationship, Nepalis have to be sure about their own priorities. This cannot be done by official fiat, but through a multi-layered discussion across class, region, caste-ethnicity, and across disciplines. Before Nepal demands openness from India, Nepalis must first be receptive to rigorous debates within their own society. The Constituent Assembly process, which is set to give Nepal a new constitution as well as define the framework for an inclusive, equitable state, provides one more opportunity for the Nepali state and society to be more confident about themselves. When that confidence is up, talking to India will not be a problem.
~ Rajendra Dahal chairs the Nepal Press Council.