NATIONAL 8 (Spotlight Weekly)

Policy Perplexity

Nepal needs greater clarity in its approach to hydropower development

By AKSHAY SHARMA

Extending from the Vindhyas in the south to the Himalayas in the north — and beyond Tibet — and the Aravallis in the west to the borders of Myanmar in the east, the Ganga-Bramhaputra-Bharak Medna is a single, sprawling, integrated system with common drainage and terminus.

Considered one of the largest river basins in the world, it extends over Bhutan, India and Nepal in South Asia and the Tibet region of China north of the Himalayan divide. Many tributaries flow to form the basin.

Nepalese policymakers have long believed that the country's salvation rested on exporting hydropower. But there are others who challenge such thinking. "Those who believe hydropower is an export commodity are wrong," asserts Ratna Sansar Shrestha, prominent Nepalese water resources expert. "Hydropower is a raw material and no country has benefited from the sale of raw materials."

Other experts dispute the assumption that India would be interested in buying electricity from Nepal when it can import vast amounts of gas from Bangladesh and energy the tapped regions of Bhutan. Then there are those who argue that the Ganges and Bramaputra should be harnessed jointly by Nepal, Bangladesh, India, and Bhutan.

Shrestha sees holes in this concept as well. "Among the countries involved in the sub-regional cooperation concept, Bhutan has been selling excess energy to India. Bangladesh has an abundance of gas to enable it to extract energy at a cheaper rate. India has plenty of hydropower resource that can be developed in the north and northeast. In such a scenario, it is unlikely that other countries will invest meaningfully in expensive hydro projects in Nepal."

Hydropower and the wider issue of water resources have assumed political colors over the decades. "The plans of hydro projects in Nepal got caught in internal politics with some favouring a more flexible and accommodating approach to India in the need of a fair settlement," Indian analyst B.G. Verghese says in "Waters of Hope".

But Shrestha feels Indian security interests go contrary to the concept of sub-regional use of hydropower projects in Nepal, especially since India knows it cannot influence Nepal in the way it has been influencing Bhutan.

Despite the acknowledgement of a tremendous scope for Nepal to generate income by investing in hydro projects, minuscule investment has stood in the way of any significant income. "Investment in hydro projects is definite to yield income. There is foreign direct investment in hydro projects in Nepal, but the returns go back to the country from where the investment originates," says Shrestha. He cites the example of Khimti project, where 95 percent of the investment was foreign, which generated income and employment mainly for the investors.

Policy analysts say the government should first work toward fine-tuning its approach to hydropower development. They say hydro projects can be utilized for multiple purposes. In the long run, hydropower is capable of creating value addition and could ensure better gains for the country.

B.M. Abbas was a part of a team of Bangladeshis who had proposed Nepal join efforts to harness its immense storage of hydro energy. "I met King Birendra in Surkhet on February 28, 1978 and I outlined to him the possibly of a navigational route through India," Abbas recounts. "In 1978, the Indian side proposed adding Nepal to the new plan as they had studied the Bangladeshi report. They would like to know the precise dimensions of approaching Nepal."

But regional cooperation poses other questions as well. "China, too, may have a stake in these matters because the waters trickle from their side too," says an expert. "It's time to stop focusing on issues of geographic ownership and focus on ensuring tangible benefits to the people."