Downstream benefit: Stumbling Block

HYDROPOWER SERIES II:Downstream benefit: a stumbling block
BY BIKASH SANGRAULA
KATHMANDU, Oct 9 - Downstream benefit remains the most contentious issue in water resources cooperation between Nepal and India. Dams like Koshi and Gandak, built in the past, benefited India in terms of flood control and irrigation, while large swathes of land was submerged in Nepal, displacing thousands of Nepalis. Today, Gandak is one of the most impoverished regions in Nepal, while Koshi is one of the most impoverished regions in South Asia.
Nepal's rivers, after flowing through Uttar Pradesh, Bihar and West Bengal in India, join the Ganges. The flow of water from these rivers has seasonal fluctuations, with massive flow taking place during the four months of monsoon, flooding Indian territory. The Ganges, in turn, floods Bangladesh before joining the Brahmaputra and Meghna rivers, finally emptying into the Bay of Bengal.
Like high dams, even hydropower projects, especially storage projects, provide downstream benefits to India. Unlike run-of-river projects, storage projects entail the building of massive reservoirs in Nepali territory. Building of a reservoir means inundating land in Nepal and displacing Nepali settlements. Storage projects are meant to collect water in monsoon, thus preventing flood in India. The collected water is released in dry season, when power demand is high, to generate electricity. The released water provides irrigation benefits to India during the dry season.
"India always wants to protect downstream water benefits," says Santa Bahadur Pun, former managing director of Nepal Electricity Authority (NEA). In fact, Article 3 of Part 6 of a treaty drafted by India in 1990, which Nepal eventually did not sign, intended to protect that benefit.
The reason why major projects like the 10,800 MW Karnali Chisapani (storage), and the 6,840 MW Pancheswar High Dam Multipurpose Project failed to make progress was the inability of the two sides to quantify downstream benefits for providing compensation to Nepal. "India does not want to admit downstream benefits," says Ajaya Dixit, chairman of Nepal Water Conservation Foundation.
Government okay with storage projects
Despite the risk of getting entangled in further disputes on water sharing, Nepal government's policy does not shelve storage projects.
"We don't have reservations on awarding storage projects to private investors from India or other countries," said Jay Kishore Mackay, director general of Department of Electricity Development.
Among projects that recently attracted interest from private investors, is the 600 MW Budhi Gandaki, which is a storage project. Government granted license to an Australian company for another sizeable storage project, the 750 MW West Seti, whose construction is yet to commence even 12 years after granting of rights.
Experts against storage projects
While interpretations vary, many experts argue that storage projects, by virtue of involving regulated sharing of water, attract Article 126 of the Constitution of 1990 (also incorporated in the draft of interim constitution), which requires that all treaties that have long-term, serious and pervasive impact need to be ratified by two-third majority of parliament.
Gyanendra Lal Pradhan, general secretary of Independent Power Producers' Association of Nepal (IPPAN), says that storage projects should be left alone.
"We should not touch storage projects. It will entail water sharing. Water will be a valuable asset in a few decades.
The government should award only run-of-river projects to foreign private investors," he says. "Run-of-river projects won't involve water sharing and won't cause displacement as well," Pradhan adds.
Pun also gives a big "NO" to storage projects. "Let's allow the building of run-of-river projects only. Let's open up a little, but not totally," he suggests.
Water sharing issues can be settled
A section of experts, however, suggest a more flexible course.
Energy economist Ratna Sansar Shrestha said that while the time is not right for power export as we have an unstable government and an unstable constitution, storage projects should not be kept out of reach of private investors in the long run.
"After we have a stable government and a stable constitution, we should enter into agreements on storage projects too, negotiating properly on compensation for inundation, relocation and rehabilitation problems in Nepal and flood control and irrigation benefits to India," he says.
According to the World Bank's guidelines, if a family is displaced by a development project, the family should be rehabilitated to a position of better economic status than where it stood previously.
However, Arjun Karki, managing director of NEA, warns that downstream benefits should not be hyped to the extent that they affect cooperation in hydropower generation.
"Storage projects indeed provide downstream benefits. But that is an indirect benefit to India. Unlike electricity, it is difficult to quantify these benefits in monetary terms," he says.
According to Karki, it's unwise to shelve storage projects on the pretext of water sharing issues. "Let's discuss modalities of compensation for downstream benefits and then award the projects," he says.