DR. AB THAPA
Even the most underdeveloped landlocked country Lesotho, which is also an enclave, was able based on international law (Ref) to reach an agreement with South Africa to use the proceeds from the supply to the latter regulated water discharged after power generation to construct free of cost almost the entire civil works of the Lesotho Highland Water Project (a multipurpose hydro power project) and also to receive annually royalty in substantial amount.
Nepal Ignorant of Vast Hydro Potential
Unfortunately Nepal is proving itself utterly ignorant of the vast economic values of our water resources and thus is seen determined to implement large storage dam projects, like the Buri-Gandaki High Dam Project, West Seti High Dam Project etc., completely discounting our right to a reasonable share in the enormous benefits to accrue to India from the use of regulated water supplied from our country.
Negotiating Skill of Lesotho
According to the World Bank’s published report Lesotho was even able to raise to 56% its share in net benefits accruing to the South Africa from the use of regulated water supplied to the latter whereas such share was limited to 50% only in Columbia River Treaty between the USA and Canada. Lesotho had supplied to South Africa 27.5 cumec regulated water after the completion of the entire First Phase of the multipurpose Lesotho Highland Water Project (LHWP). The multipurpose LHWP project included the construction of two high dams, 72 MW hydropower, 82 kilometers long tunnels, roadways etc.
The South Africa provided US $ 3 billion in 1995 prices to implement the First Phase of the multipurpose LHWP project, which excluded the cost of the hydro-electric component. After the completion of First Phase construction Lesotho started to receive annually US $ 38 million in royalty. The royalty amount is subject to periodic adjustment to cover inflation. The invested amount is expected to be fully recovered within 50 years. After that time a new royalty rate will be fixed.
Acute Water Scarcity in India
In India the demand for agricultural water dominates the total demand for water. India has the second largest population in the world. There are plentiful rains over most of the country but they are concentrated in a few months. Mr. Chaturbedi M.C. had claimed many years back that by 2005 the total ground and surface water would have been assigned to users and thus further irrigation would be restricted. India is now experiencing acute water scarcity.
India Willing to Buy
India is showing a great deal of interest in development of Nepal’s storage dam projects that would help to increase virtually by four times the sustainable flow of our major rivers. Few years back the information provided in the Indian news media clearly indicated that the Government of India was engaged in developing a policy to obtain the consent of Nepal through revenue sharing agreements in respect of the regulated waters discharged from the storage reservoirs built inside our countries.
A special high level commission constituted by the last Bajpee Government of India had even started to function to conduct studies on revenue sharing. Unfortunately, our government is not even as yet paying any attention to this highly important development that would have helped our country to gain access to a totally new stream of enormously large benefits accruing free of cost from the large storage dam projects to be implemented inside our country.
It is quite unfortunate that our government is now bent on granting license to private developers to implement large storage dam projects completely ignoring their vast water export potential. Very soon the West Seti storage dam project and few others are going to be the casualty of our government’s wrong decision.
Bilateral Negotiation on Downstream Benefits
Nepal must immediately initiate negotiation with India on downstream benefit sharing. Nepal is certain to reach satisfactory agreement with India on downstream benefit sharing because India is experiencing acute scarcity of water particularly in dry season. Needless to say that the much praised ROTI-BETI bilateral relation between Nepal and India would be nothing more than empty rhetoric if our two countries failed to agree on downstream benefit sharing principles established under International Law by Canada, USA, Lesotho and South Africa.
Beware of Give Away in Hydro Development
Even for very rich countries like the USA and Canada possessing enormously large water resources the settlement of the issues related to sharing of downstream benefits accruing to lower riparian country from the use of regulated water required direct involvement of the head of government of the country. Three Presidents, Eisenhower, Kennedy and Johnson from the USA side, and two Prime-ministers Diefenbaker and Person from Canadian side were directly involved at various stages in finalization of the decision to implement the project to use the potential of the Columbia river. Unfortunately our country is entrusting FOREIGN INVESTMENT BOARD to look after all aspects of our large storage dam projects solely from the view point of power generation compromising all other very important components of water resources development.
Mishandling of our large water resources projects would lead to their devastation for ever. Paul D. Terrell, Chief Advisor Consult of Karnali Multipurpose Project has written in an article published in magazine HIMAL in May/June 1991 ” Nepal should beware of unintentional give away in hydro development, and not rush to compromise the optimum development for the sake of quick deal. The present institution should be wary of giving away Nepali children’s rightful inheritance.”