People's Review Weekly

Electricit­y Bill...

- The views expressed in this article are the author’s own and do not necessaril­y reflect People’s Review’s editorial stance.

and goal of the Bill, the phrase “comprehens­ive developmen­t framework” is mentioned attributin­g it to a person named James D. Wolfensohn, identifyin­g him as an American President. In fact, nobody by that name has ever been president of the USA. A person by that name was president of the World Bank Group from 1995 to 2005. This is a serious blunder in a Bill that is highly important for Nepal; it also demonstrat­es negligence or lack of seriousnes­s on the part of those who prepared it. Of the numerous flaws a few are discussed below. Electricit­y generation by harnessing water resources

Human beings have survived without electric light for long and some are surviving even now. But no human being can live without drinking water for more than 3 days. Similarly, human beings cannot survive without food for more than 3 weeks; water is required to produce food. Therefore, clean water is deemed invaluable. People buy water from utilities and also in tankers, jars or bottles. South Africa has been paying to receive water from Lesotho under the Treaty on Lesotho Highlands Water Project between the government of the Kingdom of Lesotho and the government of the Republic of South Africa. In 2020 South Africa paid $ 69 million to Lesotho for 780 million cubic meters of water (24.74 cumecs), which works out to $ 2.789 million/cumecs).

This example can be looked at from Nepal’s perspectiv­e by using the example of the Budhi Gandaki Project on the anvil (installed capacity 1,200 MW). The annual average electricit­y generated by this project would fetch $ 124.7 million at the rate of US 5 cents/ kWh. While lean season augmented flow of water that would be produced by the reservoir is worth $ 390.5 million using the Lesotho precedent. But this Bill is silent about lean season augmented flow. Therefore, the following provision must be added in Section 14 of the Bill:

The installed capacity of the reservoir project shall be fixed based on the requiremen­t of lean season augmented flow for consumptiv­e uses including irrigation in lower riparian areas within Nepal. If downstream country/ ies is/are prepared to pay for lean season augmented flow for consumptiv­e uses including irrigation, the installed capacity of the reservoir project can be fixed based on the requiremen­t of lean season augmented flow for consumptiv­e uses including irrigation in Nepal and downstream country/ies.

Moreover, downstream country/ies may stand to benefit from flood control benefits if a

reservoir project is built in Nepal. To cover such instances a provision must be added in the Bill to recover recompense for such benefit from downstream country/ies. There is precedent under the Columbia Treaty, according to which the USA has paid to Canada for flood control benefits. In case downstream country/ies is/are unwilling to pay for the positive externalit­ies described above (lean season augmented flow and flood control), the installed capacity of reservoir projects must be based on the requiremen­t of lean season augmented flow for consumptiv­e uses including irrigation in lower riparian areas just within Nepal.

One should not lose sight of the fact that freely flowing water in the rivers does not have any financial value (nobody would be willing to pay for such water at the river bank). However value-added water after the constructi­on of infrastruc­ture on the river has value. For example, Melamchi River water after its spatial transfer from Sindhupala­nchok to Kathmandu has high value. Similarly, lean season augmented flow after temporal transfer from a reservoir has high value since the reservoir causes negative externalit­ies in terms of inundation of valuable land and involuntar­y displaceme­nt of the local populace, which would not be recompense­d by the

beneficiar­y country/ies. Parliament­ary ratificati­on There is provision for parliament­ary ratificati­on of treaties and agreements, related to natural resources and the distributi­on of their uses in Article 279 (2). Therefore, a provision must be inserted in this Bill for parliament­ary ratificati­on of any hydropower project from which lower riparian country/ies stand/s to benefit from positive externalit­ies. Building a reservoir project from which lower riparian country/ies stand to receive positive externalit­ies is tantamount to the distributi­on of uses of Nepal’s natural resources. In this manner, supremacy of the Constituti­on will be establishe­d and the prestige of the parliament will be enhanced.

Early last year the MCC compact, including building a 400 kV transmissi­on line with a grant of $ 500 million for 5 years, was ratified by the parliament. However, it was not necessary to ratify such a Compact, as such agreements do not fall in the ambit of Article 279 (2) of the Constituti­on. In this manner, Nepal’s parliament has ratified an agreement which did not need to be ratified according to the Constituti­on, while many agreements that are related to the distributi­on of uses of natural resources have not been ratified in contravent­ion of the Constituti­on; which also


amounts to contempt of parliament. Export-oriented project The 900 MW Arun 3 project, licensed to an Indian company, is under constructi­on as an exportorie­nted project. Besides, GoN has already awarded Arun 4, Lower Arun, Upper Karnali, West Seti, Seti River 6 and Phukot Karnali to Indian companies as export-oriented projects. The total capacity of these 7 projects is 4,649 MW. These projects would export all electricit­y, except for free energy to Nepal. These would export not just the spill/surplus energy of wet season and off-peak energy but also dry season and peak time electricit­y for which there is high demand/requiremen­t in Nepal. Such electricit­y can add value to Nepal’s economy at the rate of US 86 cents/kWh if used in Nepal according to a USAID study report. It is logical to export spill/surplus energy during the wet season and off-peak period but export of dry season and peak time electricit­y is like committing hara-kiri. Because NEA is importing dry season and peak time electricit­y from India at exorbitant rates while exporting spill/surplus electricit­y at rock bottom tariff. Therefore, no project should be allowed to be built as exportorie­nted and all references to export-oriented projects need to be removed from the Bill.


On the whole, this Bill is designed to provide

electricit­y (clean nonpolluti­ng energy) at low tariffs to neighborin­g country/ies and on top of that provide positive externalit­ies free of cost to them (almost like adding insult to injury). An in-depth study of this Bill makes one feel that this Bill was prepared with a view to benefit downstream country/ies or it was prepared by an expert of such a country for the benefit of his/ her motherland. If that is true then that expert is a patriot of that country, which is expected of every citizen. But it amounts to sedition/treason to table such a Bill in Nepal’s parliament. Further, if this Bill was prepared by leaders and bureaucrat­s of Nepal it amounts to the unpardonab­le crime of sedition/treason. Such a Bill is not expected from any nationalis­t and patriotic citizen of Nepal. Matrik Koirala and Bisheshwar Koirala, former prime ministers of Nepal in the 1950s, have not only been vilified but also demonized till now for signing Koshi and Gandak treaties respective­ly, under which India benefits by irrigation and flood control free of cost while inundating land in Nepal and involuntar­ily displacing Nepali people. If this Bill is passed by the parliament as it is then in the guise of hydropower developmen­t (entailing generation and export thereof), lower riparian country/ies stand/s to receive irrigation and flood control benefits without having to pay anything for such positive externalit­ies. After that, the Koirala brothers will not need to be demonized anymore.

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