NEPAL IN HORIFYING IGNORANCE ABOUT WATER EXPORT BENEFITS
AB Thapa
Nepal is pressed hard by foreign hydropower developers and also by our policy makers to speed up the plans to implement major multipurpose storage dam projects taking into consideration only the power benefit, and completely ignoring the benefits to accrue to our country from the export of water. Our country is in horrifying ignorance about too big a share of the water export in total benefit to accrue to our country from large storage dam projects.
Canada has built in its territory storage dams across the Columbia river to generate electricity. It receives from the USA 50% of the total net benefit accruing to the USA from the use of the regulated water flowing across the border into the USA after being used for electricity generation by hydropower stations built inside Canada. Similarly, even the South Africa encircled very weak country, like Lesotho, gets 56% of the net benefits from the South Africa for the use of regulated flow reaching South Africa after hydroelectricity generation in Lesotho.
India Willing to Pay
The net benefit to accrue to our country from the export of water could even exceed the net benefit as royalty from hydropower generation Recently the information provided in the Indian news media clearly suggests that the Government of India is now engaged in developing a policy to obtain the consent of Nepal and Bhutan through a revenue sharing agreements in respect of the regulated waters discharged from the storage reservoirs built inside our countries. Unfortunately, our country is not paying attention to this highly important development that would help to maximize the benefits accruing to our country from the large storage dam projects to be implemented inside our country.
Landlocked Lesotho
Lesotho, formerly Basutoland, is bordered on all sides by South Africa. Lesotho is one of only three nations in the world to be completely encircled by a single country (the others are San Marino and Vatican City). Its dependence on South Africa for access to the outside extends to economic reliance as well, and has deeply affected the development of the country since independence in 1966. The kingdom of Lesotho is mainly mountainous and has a total area of 30,355 sq km. The capital is Maseru, which is the largest city Lesotho was able to reach an agreement to recover a fair share of downstream benefit (water export) despite its complete dependence on South Africa.
South Africa’s Demand for Water
The South Africa requires water to supplement the existing supply in the Vaal Basin catchments area, the principal source of water for the Pretoria- Witwatersrand- Vereening (PWV) area, the country’s commercial and industrial heartland which includes the Greater Johannesburg and Pretoria conurbations. By the year 2000, the PWV was expected to accommodate 42% of South Africa’s population and to generate 56% of all industrial and 79% of all mining output, It was expected that the population of the Vaal River supply area downstream of the Vaal Dam will increase at a rate of 2.4% per year from 5.75 million in 1980 to almost 12 million by the year 2010. This represents an increase of 106%. The corresponding domestic and industrial water demand was expected to increase from 979 million cum to 3803 million cum per year, an average annual growth rate of 4.6%.
Lesotho Highlands Project
The Lesotho Highlands Water Project is one of the largest and the most intricate construction projects currently underway in the world. This project has been conceived to export water to South Africa and also to generate electricity. The first phase of this ambitious long-term master plan was scheduled for completion in 1996. It is planned to deliver 18 cum./s of water to South Africa as well as generate 72 MW of hydroelectricity for Lesotho during the first phase. The cost of the first phase project was US $ 2. 518 billion based on 1991 estimate.. The entire cost of the project ( excluding the hydropower addition that constitutes a small component of the total project cost) was to be borne by South Africa.
The Treaty
Realization of the scheme is made possible under a Treaty signed by the Republic of South Africa and Lesotho in 1986. Under the terms of the Treaty, South Africa agrees to pay a royalty for all water delivered from Lesotho for the duration of the Treaty.
Royalties for the first 50 years are based on historical feasibility studies carried out by South Africa to ensure a reliable water supply for the PVW area. One of the earliest schemes investigated was based solely in South Africa and proposed diverting water from the Orange River and using a combination of gravity and pumping facilities to convey it over abut 500 km of canals and tunnels to the Vaal Dam.
With the Vaal Dam at a higher elevation than the intake, such a scheme would have been expensive both in terms of electricity for consumption for continued pumping requirements and for the ongoing costs of operation and maintenance. Investigation of an alternative scheme proved significantly more cost effective. Under that scheme water would be diverted from the upper reaches of the Orange in Lesotho where it rises as the Senqu River and be gravity fed to the Vaal Dam. It is on this scheme that the current Lesotho Highlands Project is based.
South Africa agrees to pay for the capital cost of structures required for water transfer. As such, South Africa agrees to pay to Lesotho as a lump sum each year $25 million (in 1991 prices) for the first 50 years of the Treaty, subject to various adjustments for inflation and other financial considerations. At that time, the capital cost of building the scheme would have been realized in full and royalties will be renegotiated for the remaining period of the Treaty.
Lesson to Nepal
Nepal must hold negotiations to reach an agreement with India to get a fair share of downstream benefit prior to taking the final decision to implement our storage projects. Else our country would be deprived of such downstream benefit for ever. We all would be failing to protect our legitimate national interest whereas even the most backward landlocked country in Africa like the Lesotho is able to recover 56 percent of such net downstream benefit to accrue to the South African Republic from the use of the regulated flow of rivers after hydroelectricity generation in Lesotho. Lesotho lagging far behind our country in human development index and completely thrown at the mercy of the powerful South Africa has recently demonstrated that it too has a good sense to take full advantage of the opportunity to exploit its water resources to accrue multifold benefits.
