Greetings from Nepal MANAGEMENT OF THE GANGES RIVER BASIN: THE ROLE OF NEPAL. Ratna Sansar Shrestha, FCA

Transcription

1 Greetings from Nepal MANAGEMENT OF THE GANGES RIVER BASIN: THE ROLE OF NEPAL Ratna Sansar Shrestha, FCA

2 Prescription as regards Nepal s role will not be well grounded without a diagnostics Hence, brief ground reality check Richer in water Nepal and Bangladesh are deemed richer in water from the perspective of water availability Water availability per person per year in m 3 Nepal 9,122 Bangladesh 8,809 Pakistan 2,961 Sri Lanka 2,642 China 2,259 India 1,880

3 However, water-water everywhere but not a drop to drink condition exists For example Nepal rich in flood for 4 months and drought for 8 months Rich on the basis of average manifests temporal problem Spatial problem too exists

4 Water and food famine 1. untimely death due to water borne disease for lack of clean/pure water for drinking and sanitation Entails high cost of medication More critical is loss of human resources due to absenteeism and death 2. no water no irrigation no food security Deaths due to famine

5 water table 1 foot/year averaged over Rajasthan, Punjab and Haryana, Delhi, etc. (>438,000 km 2 )* e.g. Pancheshwar could solve this problem Low agricultural productivity in granary of South Asia (UP, Bihar, Bengal in India and Bangladesh) Both Nepal, Bangladesh and India need water in dry season for irrigation For lack of pasture facility Nepal is dependent on imported animals for meat *

6 Elusive nergy security no energy, no industrialization, no employment generation Nepal facing serious crisis of vanishing youth due migration for employment Present supply of energy not meeting even suppressed growth Target: accelerated economic growth Unachievable even normal growth is yet to be attained Bangladesh too is vying to achieve energy security while facing acute shortage of electricity

7 India s energy crisis cascaded over half the country on July 31, 2012 with collapse of 3 regional grids Nepal produces no petroleum product and incurring huge deficit of balances of trade and balance of payment for lack of electrification of transportation Moreover, hydropower and base load from coal, nuclear etc. is excellent match Further, peak-in power from storage hydro rates high avoided cost

8 Besides, petrochemicals needed for more important uses including capsules for drug, fertilizers, etc. besides being nonrenewable Energy from petrochemicals costly in fiscal terms as well as in terms of environment and public health Energy from coal costly in terms of environment and public health

9 Water borne transportation Non-existent in Nepal (except in Kali Gandaki A reservoir) Bangladesh facing problems due Farakka barrage Water borne transport preferred due energy economics energy cost of carrying one ton of freight a distance of one kilometer averages 337 kj for water, 221 kj for rail, 2,000 kj for trucks* *(

10 Ganga basin ravaged by floods Some people in India, mistakenly, blame Nepal for flood in UP, Bihar, etc. for release of water by Nepal into rivers originating from there There are no dams in Nepal except for Koshi barrage, in Indian control Twin positive externalities of flood control and irrigation from Koshi accrues to India Two negative externalities of inundation and involuntary displacement for Nepal

11 Way forward Nepal s potential role Multitude of international events and treaties no signification progress instead of beating around bush Prefer calling a spade a spade Build multipurpose reservoir projects at strategic locations Technically/financially viable only in midhills in Nepal and similar terrain in India Terrain/topography of it not only affords storage space in quantum with least involuntary displacement but also head

12 to augment dry season flows of Ganga at Farakka Joint Committee of Experts from India and Bangladesh in October 1986 proposed to build following in Nepal: Karnali/Chisapani (10,800 MW), Sapta Koshi (3,300 MW), Pancheshwar (6,480 MW), Kaligandaki 1 and 2, Seti and Trisulganga John W Handmer also opined that Kali gandaki 1 and 2, Seti, Trisulganga, Sapta Koshi, etc. may prove more than adequate to meet all the reasonable water demands in Ganges basi covering Nepal, India and Bangladesh

13 Negative externalities: (1) Submergence/inundation and (2) involuntary displacement in Nepal (3) Restriction on consumptive use in upstream areas (both China and Nepal) Points to be noted: Nepal bears high cost and opportunity cost due to submergence/inundation and involuntary displacement Cost due restriction on consumptive use in Nepal may be higher than in China inter alia due to relatively higher density of population

14 Positive externalities: (1) Flood control in rainy season Water Environment Partnership in Asia estimate: approximately 70% of dry season flow and 40% of annual flow of the Ganga River comes through Nepal. Therefore, Projects in Nepal may be able to control roughly 40% flood Thorough calculation imperative Saving in cost due to flood and the cost of rehabilitation afterwards

15 (2) Augmented/regulated flow in dry season for: Drinking water irrigation navigation Generation of peak-in power

16 Develop formulæ to share benefit from positive externalities and to recompense for negative externalities Replicate Columbia treaty or Lesotho Highland Water Project agreement On lines of South Africa paying $ 25 million/year (in 1991 prices) for 18 m 3 /s to Lesotho India and Bangladesh to pay for positive externalities to China and Nepal for accepting negative externalities

17 Specific example of Koshi High Dam Installed capacity 3,300 MW Storage capacity 13 billion m 3 submerge 196 km 2 including one airport, 19 bridges, etc. involuntary displacement of 100,000 people Restriction on consumptive use in upstream areas in Nepal and China

18 Estimated cost $ 2 billion Project company to be jointly owned by Nepal, Bangladesh, China and India based on equity investment Debt $ 1.5 billion Equity $ 0.5 billion Bangladesh and India to pay to upstream countries (not to project Co.) based on positive externalities accruing to them e.g. India will owe $ 300 million/year for irrigation of 1 million hectares For lack of data on flood control no computation done

19 Payment for positive externalities will be shared between Nepal and China based on the proportion of negative externalities Project companies to be viable business proposition based on sale of peak-in power at lower than avoided cost Project companies to pay dividend to owners out of net profit Lesson from cancellation of West Seti Words of caution Dam in seismic region Quality assurance in construction Young mountain high silt-load de-commissioning

20 Impediments and constraints 1. Indian investors in Nepal Fail to ensure optimum exploitation to the detriment of even India e.g. U Karnali higher in both downstream benefits and energy, cost effective too than Koshi high dam 2. bilateral & multilateral Track I, II & III JRC between India & Bangladesh only! India as downstream country seeks right to tail water guarantee from Nepal while ignoring it in dealing with Bangladesh

21 3. Security Issues former secretary of ministry of external affairs of India Mr Jagat Mehta noted that Indian Govt. prefers to ensure security of the project in Nepal by Indian the security personnel * In the context of Karnali Chisapani, 10,800 MW got aborted for that very reason in 70s prefer to eat stone/rock *Chapter on India and Nepal Relations: A victim of Politics in a book titled India-Nepal Relations Challenges Ahead Publisher Observer Research Foundation in 2004

22 Security of the project should be for host country law and government Even now we have people in Nepal who: are willing to emulate Bhutan Don t mind stationing foreign troops on the soils of Nepal Offer to India to take care of Nepal Army Opine that sovereignty should not come in way in minority, though! 4. Data and information Nepal very transparent but CBM imperative for effective cooperation

23 Thanking you for bearing with me