Opinion (Spotlight Weekly)

NDF Meeting And Melamchi Project

By Dr. AB Thapa

It was reported in one of the newspapers published on April 19, 2004 that on that very day the Asian Development Bank (ADB) demanded the government to increase water tariff long before the dream of bringing Melamchi water materializes. Addressing an interaction here , the team leader of the ADB delegate Keilchi Tamaki has said that water tariff must be increased from July 2004. This news does not come as a great surprise to anyone. It had been reported in several past issues of this journal that the Melamchi Project is going to be a big liability to the inhabitants of the Kathmandu valley. It is unfortunate that nowadays the ADB is too keen on pressing hard on the government to raise the tariff to cover the growing expenditures. As in earlier years, the ADB is not seen to be seriously concerned to check scrupulously the possibility of bringing down the costs of the projects to be financed by them. Sometimes back an article was published in this journal to draw the attention of the ADB of gross negligence in the preparation of the final plan of the Melamchi project, which could result in steep hike of the water tariff The project is surely going to be an expensive white elephant. So far, the ADB is not seen to be trying to conduct investigation into this matter. Luckily, it is not still too late to correct the Melamchi blunder.. It is hoped that the forthcoming NDF meeting would look into this matter seriously.

The ADB’s Past Role

The Asian Development Bank had played very important role in the past in Nepal’s socio-economic development. Nepal had started to receive generous financial assistance right after the establishment of the ADB in late 1960s. The ADB always tried to help Nepal to ensure that the projects financed by the Bank would be in the genuine interest of the people of Nepal. The Bank used its capable manpower to confirm that every dollar borrowed from the Bank would be spent to yield maximum return to Nepal. The Bank authorities always wholeheartedly supported the move to enhance the effectiveness of the projects financed by them despite the fact that such task could be very difficult and to a certain extent even embarrassing to the Bank. The perfect example to illustrate such policy of the ADB could be the Kankai Irrigation Project implemented in Nepal with the financial assistance of the Bank in 1970s. The ADB, despite the fact that it was already too late, had agreed to approve Nepal’s proposal to change completely the design of the Kankai Irrigation Project - after the contractors had already started the main civil works construction. According to the new design, the irrigation capacity of various structures and canals could be further raised by about 60%, despite the fact that there would not be any increase in project cost. Such design revision was highly embarrassing to the ADB because the feasibility study including the detailed design, tender document preparation works etc. had been done under the direct supervision of the Bank at the headquarters by the foreign consultants far away from Nepal without the participation of a single Nepali engineer. Despite such uneasiness, the ADB had endorsed our proposal to revise totally the design of the Kankai Irrigation Project.

Lack of ADB Concern

In recent years there is a growing apprehension that the ADB is showing very little concern for the viability of the projects it is financing on water resources sector. As a result, Nepal’s power sector is already in a big crisis. Among the projects already financed by the Bank, the 60 MW Khimti Hydroelectric Project built by a private developer under the ADB loan is the best example to illustrate why the electricity tariff in Nepal had to skyrocket in recent years. At present the customers of Nepal Electricity Authority are forced to buy electricity at a price, which is perhaps the highest in our region, despite the fact that the electricity supply is irregular and the voltage fluctuates abnormally.

This author had cautioned, in writing, against making a decision to implement the Khimti Hydropower Project. It was sure that such decision was going to be extremely harmful to the NEA. I had explained about it in a report submitted in early 1990s entitled “ENDING THE PRESENT POWER SHORTAGE CRISIS: Presentation of an option to resolve quickly the present power crisis at a cost perhaps ten times cheaper”. The findings of that report have been published in some of the newspapers and journals.. The report can be still traced in the WECS library. Unfortunately, nobody was concerned about the terrible consequences for the future of the Nepal Electricity Authority. The ADB without any hesitation ( though the World Bank is said to have declined) sanctioned the loan to private developer to implement the Khimti Project. The extremely harmful decision of the ADB to provide loan to implement the Khimti Project opened floodgates to implement many more similar hydropower projects. Private hydropower developers were eager to grab this opportunity to quickly enrich themselves by selling the disproportionately large seasonal energy that is going to be totally wasted at the price of firm energy.

Unfortunately, the Melamchi Project could be the next casualty of the Bank’s feeble supervision. People want to know why the Yangri and Larke rivers specially reserved for augmenting the Melamchi flow to meet the growing demand for water supply in Kathmandu valley onward 2011 had to be leased out to private developers to build hydropower projects.

Why Yangri and Larke Were Leased Out?

The UNDP supported feasibility study report of the Melamchi Project explains that around the time of 2011 the total system demand for water supply ( in Kathmandu valley) is expected to reach the total supply from in-valley surface sources and Melamchi. Thereafter, the next stage of the development of Melamchi will be required. This entails diversion from the YANGRI and LARKE rivers that flow to the east of the Melamchi. Water would be diverted by tunnels to a point upstream of the Melamchi intake. The total length of the delivery tunnels is expected to be over 12 kilometers. The Larke and the Yangri are the main tributaries of the Indrawati River. After the diversion of the Yangri and Larke rivers into the Melamchi there would hardly be any flow in the upper reach of the Indrawati River during the dry season.

It confuses a common man why it was very recently allowed to lease out the Indrawati River to private developers to build a cascade of hydropower projects in all probability with the tacit consent of the Asian Development Bank. One hydropower project is going to be completed very soon and others are at the planning stage. Concerned agencies at the policy making level in the government and the Asian Development Bank deeply involved in Nepal’s power sector should be able to explain the rationale behind the decision to lease the Indrawati River to private developers to build a cascade of hydropower projects. Couldn’t we have found some other suitable rivers any where in Nepal to be leased out to private hydropower developers?

Why Hydropower Component was Dropped?

There exists a big potential to generate cheap electricity by using the diverted flow of the Melamchi River The elevation of the Melamchi intake weir is 1715 m and the inlet to the treatment works near Sundarijal is 1409 m. Thus there is an enormously big gross head of 306 m. The UNDP report has clearly stated that the net increment in investment ( the cost of the powerhouse located near Sundarijal with electromechanical equipment) needed to implement the hydropower element is relatively small as the intake headrace tunnel and penstock are already in place for conveying water to the treatment works. According to the feasibility report of the Arun-3 Project, operating at a head of about 300 meters ( same as the Melamchi Hydropower ) the cost of electromechanical equipments and power station civil works is only about 30% of the total project cost. The UNDP study has concluded that it would be worth constructing the hydropower and it could contribute to reducing the cost of drinking water to Kathmandu. The UNDP report explains that even before the diversion of the Yangri and Larke rivers the total annual generation of the Melamchi hydropower would be 60 GWh and out of it the firm power generation would be 40.5 GWh. The Melamchi hydroelectricity generation would have been close to 50% of the annual generation of the Kulekhani No.1 hydropower project. After the diversion of the Yangri and Larke the electricity generation of the Melamchi hydropower plant would be further increased. It is surprising to learn that the Melamchi hydropower component has been dropped. The Asian Development Bank should seriously look into this matter to find out why the power component of the Melamchi project was allowed to be dropped despite the fact that the UNDP report has concluded that the power station would be worth constructing and could make a contribution to reducing the cost of drinking water to Kathmandu residents. It is still not too late to reintroduce the hydropower component if there is not strong justification for the hydropower component to be dropped.

A New Vision of the Melamchi Development

Water and Energy Commission of HMG has put forward a new vision of the Melamchi development. It would allow delivering Melamchi water free to the inhabitants of the Kathmandu valley. The Yangri and Larke diversion problem would also be automatically resolved. Apart from the reintroduction of hydropower component, no big change of the original design of the Melamchi project would be required at this stage.

The way the Melamchi project has been planned clearly shows that the planners of this project were unfamiliar with the water resources potential of the Melamchi River. A Melamchi project conceived primarily as a power project linked with the existing Kulekhani hydropower - acutely suffering from water shortages - and also with the Langtang projects could provide Kathmandu people with water almost for free. A Melamchi project exclusively for water supply is obviously very expensive. The project involves the construction of a 28 km long delivery tunnel. Thus, the Melamchi tunnel is, too, long. Apart from it, the tunnel size adopted based on the construction requirement is also very big for a scanty dry season flow of only about 1.5 cu. m/sec. The proposed tunnel could be used as a transit route for the passage of surplus Melamchi and Langtang waters into the Kulekhani storage reservoir acutely suffering from water shortage.

After the Langtang diversion the Melamchi tunnel could be expected to run in full capacity of about 15 cumecs throughout the year. It would permit a 35 MW Melamchi tunnel hydropower operating at a head of about 300 meters to generate annually up to 300 GWh firm electric energy, which would be 50% more than the electricity generation of both Kulekhani No-1 and No-2 hydropower stations put together. After the diversion of the Langtang into the Melamchi, it would not be necessary for augmenting the dry season flow of the Melamchi to divert the Yangri and Larke rivers which have already been leased out to private developers for the generation of electricity. It would also be possible to set aside a large proportion of the dry season flow of the Melamchi river for the use of the local people. As a result, the future supply of Melamchi water to the local inhabitants would not have to be unduly restricted.

Opportunity To Get Melamchi Water For Free

At present, the Nepal Electricity Authority is also interested to divert the Langtang water for the generation of electricity. Unfortunately, they are conducting a study to discharge the Langtang flow after power generation into the Trisuli River, despite the fact that the cost and benefit to NEA from such diversion into the Melamchi would also have been very much the same. However, neither the NEA nor the Water Supply Agency has any appetite to work together. It is hoped that the forthcoming NDF meeting would recommend the Asian Development Bank, involved in coordination of the Melamchi Project to ensure that this project would not be implemented in a way detrimental to the true interest of the residents of the Kathmandu valley. We do hope that the residents of the Kathmandu valley would not be denied the opportunity to get almost for free the Melamchi and Langtang waters.

(Dr. Thapa writes on water resources)