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210 / International Watercourses Law and Its Application in South Asia Prospects and Problems of Nepalese Water Resources / 211rehabilitation and resettlement. In the Nepalese scenario, thefirst question which confronts the planner and policy maker iswho will purchase the electricity. India is the sole buyer so farand without her agreement Nepal cannot export to Bangladeshor Pakistan. Evidently, other optional markets such as China,must be researched. The other issue is whether by building adam in the upper riparian country, the flood problem can bereduced and low water flow increased for irrigation benefit ofthe lower riparian country. The upper riparian state must bepaid by this beneficiary proportionately on the basis of benefitsfrom the construction of a dam and basin management,similarly to the case of the Columbia River Treaty. 91 It shouldbe noted that through building a dam, the upper ripariancountry may obtain hydropower benefit, but will submerge herland and lose other wealth, flora, fauna, fish stocks, andbiological diversity; there will also be a need for rehabilitationand resettlement of the peoples etc. Moreover, after about fiftyyears such sites will be unable to give benefits as a result of thesedimentation, and any chance to reuse them is lost for ever. 92The position of the lower riparian country, however, will bedifferent to that of the upper riparian one; she will be moreconcerned about regulating and increasing low flow, aboutflood control, and about extra irrigation costs. For example, inthe case of the KMP, India is refusing to share irrigation andflood control benefits, stating that she had already constructed acomplete flood protection project along the Karnali by buildingand maintaining embankments on either side of the river athuge cost. 93 However, in practice, these embankments are notable to eliminate or check flood damage in other than normalyears; construction of reservoirs is more successful inimpounding flood waters, such as in the Yangtze River in91 K. Prasad, “Priority and Institutional Development” (1994) in 4 WaterNepal, p. 221.92 Supra note 21, p. 284.93 Supra note 22, p. 345; also see supra note 21, p 284.China. 94 Furthermore, it has been established that even afterconstruction of these embankments, the havoc caused byflooding has not often been mitigated or reduced; on thecontrary, there has been tremendous loss of life and propertyfrom the flood water draining from Nepal during the recentrainy season. It is a proven fact that in Bihar the embankmentcontributed much more to flood damage than it did to anyprotection, and during the peak flood period people actuallydestroyed the so-called flood protection measures in order toprotect their lives and property. 954.8 Problems and Prospects of Nepalese WaterResourcesIn Nepal, it is a known fact that the development of the countrydepends upon the utilisation of her vast water resources, andalso upon tourism. It is also known that in the past, whateverwater projects were carried out in co-operation with India,Nepal did not adequately benefit. It was reported by one author,B. C. Upreti, that King Birendra of Nepal himself onceremarked that his country had been cheated by India in the caseof the Kosi and Gandak. 96 In political elections in Nepal, waterissues have always been a 'hot potato'. It was evident that afterthe conclusion of the Memorandum of Understanding (MOU)in connection with the Tanakpur Barrage, the Nepali CongressGovernment became the target of much political criticism fromwithin Nepal. The dispute was referred to the Supreme Court,which declared that the said MOU is a kind of treaty whichdealt with the sharing and allocation of national resources;hence it falls within the provisions of the constitution of theKingdom of Nepal, 1990, Article 126, and needs to be ratifiedaccordingly. 9794 A.B. Thapa, “Kosi Floods” in 21 Spotlight, Nepal, September, (2002).95 Supra note 48, pp. 87-135.96 Supra note 17, p. 110.97 Judgement of the Nepalese Supreme Court in the case of B. K Neupanev. His Majesty's Government (8 May, 1995), Nepal, including theCouncil of Minster and Ministry of Water Resources.
212 / International Watercourses Law and Its Application in South Asia Prospects and Problems of Nepalese Water Resources / 213It is clearly envisaged in the Ninth (1997-2002) as well as theTenth Plan (2003-2008) that both poverty eradication andinfrastructure development will be accomplished by means ofthe effective and efficient utilisation of water resources.Furthermore, bilateral and regional co-operation will beenhanced in order to achieve these goals; small and mediumhydroelectric projects should be carried out to meet domesticneeds, whereas mega-projects will be undertaken to exportpower to the neighbouring countries with other downstreambenefits being shared. 98 The Nepalese government adoptedpolicies and made laws in this context, 99 and also adopted awater resources strategy recently. 100 The strategy sets out indetail the proposed use of these resources for povertyalleviation and infrastructure development, by exportinghydroelectricity from the mega projects, alongside domesticconsumption from medium and small projects, andimplementation of these resources in the spirit of bilateral aswell as regional co-operation. 101Under the existing arrangement between India and Nepal, up to100 MW of electric power may be traded (in either direction)between the two countries according to requirements. Nepal iswilling to increase this figure to 150 MW, by including power98 His Majesty's Government, Nepal , The Ninth Plan, Kathmandu, 1998,pp. 89-92; also see N. K. Sharma, Planning and Development in Nepaland the Tenth Plan, Kathmandu: Pairibi Pub., (Nepali version), 2003,p. 119.99 Hydropower Development Policy (2049), Irrigation Policy (2060),Industrial Policy (2049), Foreign Investment and One Window Policy,(2049), Establishment of Power Development Fund from the WorldBank /HMG joint Fund, membership of MIGA and New YorkConvention on Foreign Arbitration Award 1958.100 Supra note 2, p. 36.101 Ibid. p. 115: from private sector involvement, the Khimti (60 MW) andthe Bhotekosi (36 MW) projects were implemented; similarly,Indrawati (5 MW) has been developed and also west Seti (750 MW),which is an export oriented project, has been in the implementationstage.generated from the Kali Gandaki A project. 102 However, themajor obstacle to Nepal’s export potential is the noncooperativeattitude of the buyer 103 and the expense of electricitygeneration. 104 If it cannot be harnessed at a competitive price,the chances of export are nil. Private sector involvement maybe required in order to achieve efficiency and competitivetargets. 105 In the Nepalese context, the Independent PowerProducers (IPP) are generating around 100 MW of electricityand the NEA, a governmental entity, has an expensive PowerPurchase Agreement (PPA), about 7 US Cents/kWh; such anexorbitant price would make it unable to use or export power.Even Pakistan has paid the IPPs 6.5 US cents/kWh and is notable to export to India at the same price. Therefore, the pricingpolicy needs to be reviewed. 106In the existing Nepalese energy situation, only 1% of totalenergy consumption comes from hydro-electric source, 68%from wood fuel, 15% from agricultural residues, 8% fromimported petroleum products and 8% from cow dung and coal.Under these circumstances, in order to mitigate the adverse102 The MD of NEA set forth his plan of exporting 150 MW ofhydropower to India; Staff, “NEA exporting electricity to India”, TheKathmandu Post, 16 August 2002; also see A. B. Thapa, “UncertainFuture” in 22 Spotlight, 14-20 March (2003).103 “Nepal-India Power Trade”: while Nepal negotiated to sell her extraelectricity after the completion of the Kaligandaki A project, Indiaoffered Rs 2.50 per unit, which is far below the generation price andalso below the market rate in India. 22 Spotlight, March 21-27, (2003).104 Supra note 25, p. 179: the cost per KW of installing mini-hydro plantsvaries from a low of around US $ 350 in Pakistan to a high of US $2,000 in Nepal; also see D. Gywali, “Himalayan Waters: BetweenEuphoric Dreams and Ground Realities” in K. Bahadur & M. P. Lama(eds), Nepal Perspectives on Indo-Nepal Relations, New Delhi: Har-Anand Pub., 1995, p. 253; due to the international consultant andcontractor investment, Nepalese hydropower generation is four to fivetimes more expensive on a per KW basis than it is in India or Bhutan.105 Ibid.106 S. B. Pun, “The Evolving Role of the Public and Private Institutions inthe Nepalese Power Sector” in Annual Report of Water and EnergyCommission Secretariat, (1999) pp 38-49.
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International WatercoursesLaw and I
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PrefaceIn this book, the author has
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International Treaties and other Do
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ADBAJILAus.JILAYBLADPILALCCASEANAGO
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GlossaryMap of the Ganges BasinThe
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Chapter- ThreeEquitable Utilisation
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Introduction / 1 2 / International
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