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Uproar in Nepal over Indian energy proposal

Last Updated: Sunday, July 20, 2014 - 19:32

Kathmandu: Days ahead of a visit by External Affairs Minister Sushma Swaraj aimed at further strengthening bilateral ties, an Indian proposal for the development of Nepal`s abundant water resources has triggered a row in the Himalayan nation with many political parties opposing it contending it was not in Nepal`s national interest.
At a closed-door meeting here over the weekend, several former energy ministers of Nepal opposed the Indian proposal to develop
Nepal`s hydro power sector and said "it is a bid to make Nepal another Bhutan".

However, the Indian Embassy here Sunday maintained that the draft proposal in no way constrained Nepal`s sovereign right to
develop its hydropower potential.

The embassy, seeking to refute the charges, said in a statement: "Several Nepali media outlets on Sunday picked the Indian
proposal as dominating stories quoting some energy experts and political leaders that it undermines Nepal`s sovereign right to
develop its hydropower potential in Nepal."

"In no way does the draft constrain Nepal`s sovereign right to develop its hydropower potential."

"The proposal forwarded by India is a draft for discussion and would require bilateral negotiations prior to finalization," said
the statement, adding that both sides are free to propose amendments or modifications.

The proposal was forwarded during the concluding phase of the Manmohan Singh government.

The row comes ahead of Indian External Affairs Minister Sushma Swaraj`s three-day official visit to Kathmandu, beginning July
25. She will lead the Indian delegation at the 3rd Nepal-India Joint Commission meeting to be held July 26-27.

The Indian proposal seems to have drawn flak for at least two reasons.

Firstly, the proposal was kept a secret, even from some cabinet ministers, who were now demanding that the document be made

Second, it is being seen as a proposal that will allow India to dominate the abundant hydropower sector in Nepal.

Nepal is rich in hydropower with 83,000 MW of theoretical and 42,133 MW of technically/financially viable potential. However,
even with this enormous potential and a 100-year history of hydropower development, the total installed capacity, at present, is
a mere 730.47 MW.

Indeed over the past four years there has been a severe electricity deficit, inducing painful load shedding.

The main opposition United Communist Party of Nepal-Maoist (UCPN-M) expressed its concern over the Indian proposal and contended
that some of the provisions were against Nepal`s interest.

It said the provisions on energy generation, cooperation, energy buying and selling and price determination gave exclusive
rights to India. Several other clauses of the proposed draft were also directed at providing benefit to India, alleged the

A meeting of the ruling alliance partner Communist Party of Nepal (Unified Marxist-Leninist) Saturday discussed the Indian
proposal and asked Energy Minister Radha Gyawali to submit "a satisfactory explanation".

The leading ruling partner, Nepali Congress, was still to make its stand clear on the issue clear.

On Saturday, UCPN-M chairman Pushpa Kamal Dahal telephoned Acting Prime Minister Bam Dev Gautam and asked him not to accept any
proposal that will put Nepal`s energy market in Indian hands, said Maoist vice chairman Narayan Kaji Shrestha.

The raging controversy has led to Nepal cancelling the Eight Meeting of the Joint Committee on Water Resources (JCWR) scheduled
to be held in New Delhi Sunday and Monday.

There are numerous barriers constraining hydropower development in Nepal. A lack of political stability, good governance and law
and order issues are important factors hindering progress and economic growth.

Frequent changes of ministers and the government, lack of inter-governmental agency co-ordination, prolonged processes and
procedures for environmental clearances from the government, and a long list of inordinate local demands have been posing a
major threat to hydropower development in Nepal.

First Published: Sunday, July 20, 2014 - 19:32
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