The Himalayan energy conundrum: Nepal in huge trouble
by Arun Shrivastava on 05 Nov 2012 0 Comment

The energy sector in Nepal is mired in a game known in India variously as 2G, Commonwealth-G, Coal-G, Madam G, and now Mister G, ad nauseum, never ending Geez. This seventh letter of English alphabet has suddenly acquired a very ominous meaning which in Hindi and Nepali is also known as Ghotala-G [the English equivalent of which is ‘embezzlement’].  Recently a British consultant prepared model Project Development Agreement [PDA] was approved by the Nepal Investment Board [NIB] to exploit the hydro-electric potential of Himalayan Rivers. The British consultant forgot to include EIA, EMP and DMP in the model contract document. Even without the three safeguards, three companies - two Indian and a Norwegian - have refused to accept the conditions. The energy scenario in the Himalayan region stinks and the British consultant failed to address the social and environmental issues in his PDA. Purely legalistic approach is a typical British disease.


Nepal is part of the central Himalayan region with hydro-electric potential estimated at around 83,000 Megawatt [MWe] of installed generation capacity. The Himalayan region from Pakistan to Arunachal Pradesh (India) has an estimated hydro-electric potential of 250,000 MW and another 250,000 MW potential in China’s Xijang region. If this potential is tapped, at 70% capacity factor the Himalayan region can generate 250,000MW x 70% or 175,000 Mega Watt of electricity per hour [MWh].  


Sold at Rs. 5 per unit, Nepal’s 83,000 MW hydro-electric potential can generate Rs. 2.54 billion rupees turnover from energy sales every year at 70% capacity factor. If appropriate royalty is fixed for Nepal’s waters, a natural resource that belongs to Nepali people not to any investor and which no corporation should be allowed to own, the moneys generated from energy royalty alone can meet the social and economic development costs for 26 million Nepali citizens in perpetuity, provided the pricing is just, equitable, honestly calculated and provided the environmental impacts are properly assessed and disaster mitigation strategies are in place.


Indian politicians’ stratospheric ambitions of paving the way for seven generations of rulers in the family, an old Hindu joke about corrupt and criminal rulers, might even be emulated by Nepal’s Maoists and their collaborators, with firms registered in NOIDA and shares held by their drivers, nannies and acolytes. That’s where the interests of Neo-conservative Maoists and Washington based Neo-conservative run World Bank interests converge. And the two broad interest segments merge with the third interest group: the George Soros funded INGOs and their floor-sweeper NGOs of Nepal. They won’t let go but dip a finger in this energy pie, nor would, and that is the fourth interest group, the Vatican supported Christians in Nepal who have forgotten that water is life. There is no difference between Holy Water and Pure Glacial Water. Water by any other name would always remain H2O-or two atoms of hydrogen and one of oxygen- holy or unholy but the attempt surely is to secularise water resources too.


These fifth-columnists, as history shows, have paved the way for resource plunder worldwide. They are now paving the way for energy majors, all criminal corporations, of Europe and North America to enter Nepal just as the Maoists tried to privatise Kathmandu water supply under World Bank-Asian Development Bank pressure no sooner they came to power in 2006. Add to that the direct threat posed by US Special Operation Forces now directly operating in over seventy countries including Nepal and American soldiers are on the ground in sensitive areas of Nepal.  


Problems with model Project Development Agreement [PDA] 


The model PDA has three fatal omissions. One, it does not talk of environment impact assessment [EIA]. Two, it does not talk of environment management plan [EMP] as a statutory requirement as is required in India and it should be required in any project based on natural resource exploitation, except natural farming. Three, the PDA does not require project authorities [PA] to prepare Disaster Mitigation Plan [DMP] which is also a statutory requirement in India for large projects. Many Indian project authorities have tried to bypass these requirements and their projects are mired in court cases. Some project authorities in blatant disregard for these provisions have proceeded ahead with their project, got caught and in a few cases even the courts behaved like honest brokers. 


The entire Himalayan region is being pushed up at the rate of 48mm per year from tectonic pressure of the Indian plate ramming into the Eurasian plate. The Himalayan region is highly unstable and prone to major earthquakes and earthquakes can be induced by anthropogenic loads as well.


EIA, EMP and DMP should be prepared as a basis for investment decision and subsequently for statutory approvals subject to full satisfaction of all stakeholders. These provisions are missing from the British Consultant prepared PDA. Ignoring EIA, EMP and DMP would spell disaster for the people of Nepal and the entire Himalayan region and the flood plains of rivers originating from there. This is common sense, not rocket science.


EMP is required to stabilise the catchment area before dams create inundation zones and these zones must be stabilized with hardy trees and bushes which serve the economic interest of local people as well as prevent erosion. Erosion in catchment area threatens a dam’s designed life, but not one private agency in Himachal Pradesh or Uttarakhand has bothered with catchment area stabilization. The second major reason is that roads, residential quarters and other facilities cause as much environmental destruction as dams, which project authorities don’t want people to know.


DMP must be properly prepared and discussed with all stakeholders to apprise them of potential damage and losses in case of dam failure or systemic failure. All public hearings have been farcical and in some even the district administration got involved in pressuring villagers to part with common pool resources, including village commons.


The central issue is this: when people are displaced because of infrastructure projects they lose their traditional rights to resources, access to those resources and benefits. Exclusive right to private promoters in the project areas deprives local communities of traditional rights. This is a global phenomena and Nepal has fallen into that trap. The British consultant has not even documented the traditional rights of local communities and how the PDA plans to protect those traditional rights. The British consultant does not know that once a household is uprooted, all traditional rights of access and benefits from natural resources are permanently extinguished. Acquisition denies basic human rights of poor mountain people without appropriate economic rehabilitation. Since the provisions for economic rehabilitation have not been addressed in the PDA, it should be scrapped or revised.


That brings us to the question of Resettlement and Rehabilitation [R&R] issues. Nepal, like the entire South Asia, is governed by Anglo-Saxon legal system with exclusive right of the state to ‘eminent domain’ invoked in the name of ‘public interest.’ This has brought devastation to South Asia because even after 60 years of freedom from the uncultured Brits, south Asian governments have conveniently failed to define what constitutes ‘public purpose.’ Nepali people should note that over 60 million Indians have been displaced from their lands since 1947 and few, not even 1%, have been economically rehabilitated. They have been displaced from resource rich areas. The PDA of Nepal does not address the issue of R&R. This is a very complex issue and it is impossible to estimate the net worth of a household dependent on natural resources, especially small and marginal hill farmers who feed the nation.


But the real agenda of the fifth columnists is to privatize natural resources in the name of democracy, progress, development, ethnic identity, ethnic sovereignty, regional resource grab, and criminalization of those very resources that sustained Nepal as a civilization. Already much of ethnic minority lands have been stolen by international forces in the name of conservation under Park Areas Act.


Nepal, India and China can generate trillions of watt hours of electricity if they follow science, not politics, and come out with a practical, equitable and just policy to exploit Nepal’s water resources with due regard for ecosystem and conservation and due respect for local community rights.


One last word: both China and India have excellent engineering skill but when engineers are made to achieve absurd profit targets, technological excellence, safety and security is invariably ignored.


Arun Shrivastava is an accredited management consultant and highly experienced researcher and writer. Since 9/11, he has devoted much time to researching New World Order issues. He is South Asia correspondent of Salem-News of Oregon, USA and a regular contributor to Global Research. His email is:  

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