Ratna Sansar Shrestha, FCA
The author of this article is a management professional and corporate lawyer and also Fellow of Institute of Chartered Accountant of Nepal. He is Chair of Nepal Hydro & Electric Ltd. He was a member of Water Supply Tariff Fixation Commission from 2007 to 2011 and member of Board of Directors of Nepal Electricity Authority from 2002 to 2004. Similarly, he also worked as a member of Board of Directors of Everest Bank Ltd. from 2006 to 2010 and of Butwal Power Company Ltd. from 2001 to 2015.
Nepal is not endowed with natural resources like fossil fuel, minerals, etc. However, nature’s best gift to Nepal is water resources, which has yet to be properly harnessed. Harnessed properly, it can draw Nepal’s lifeline leading to prosperity. Water resource is important not only from the perspective of generating hydropower but also from the perspective of water supply for drinking
and sanitation, to irrigate agricultural land for increased agricultural production and productivity as well as for animal husbandry, fisheries, recreation, navigation, etc.
However, harnessing water resource at bilateral level with india is seen to be fraught with security ramifications. Bilateral exploitation of water resource with India has compromised Nepal’s security at several levels due to transboundary nature of rivers. Then there is question of security of foreign investment.
Transboundary Rivers
India cannot generate much hydropower from rivers that flow from Nepal to India for lack of head (only low head projects are possible in India on these rivers). In reality, India hankers after 
stored water much more than electricity due to high population growth for drinking and sanitation and for irrigation to increase food crop production to feed over a billion mouths. Besides, India hopes to control flood in UP, Bihar, West Bengal, etc. by building dams in Nepal. Electricity to be generated by these is secondary for India. The then Indian water resource minister Saifudin Soz has admitted in September 2008, “Our main interest is flood control and irrigation. Those are our first and second priority. If we get hydroelectricity as by product, that will be a bonus for us.”
Therefore, India plans to have rivers in Nepal harnessed by having reservoir projects built, like Koshi High Dam, Karnali Chisapani Dam, Pancheshwar project, etc. and her wish is to have them
implemented in the format of Koshi and Gandak barrages, which are analyzed below to throw light on their security ramifications.
Koshi Agreement and the Barrage
Koshi Agreement was signed on April 25, 1954 between Governments of Nepal and India and it was amended on December 19, 1966. India wished to construct a barrage to tame Koshi River,
known as “sorrow of Bihar” at that time and the basic objective of signing the agreement was to control flood in Bihar and to irrigate land therein and other lower riparian areas. Construction of the barrage was begun in 1958 and completed in 1962. Security ramification of the agreement lies in Article 3 of Koshi Agreement, Subtitle of which is “Authority for Execution of Works and Occupation of Land and other Property”. The word “occupation” has been used unabashedly. It is stipulated in this Article that Nepal “shall permit the occupation, for such period as may be necessary of all such lands and places as may be required for the proper execution of the Project.” The project area of Koshi barrage is still under Indian “occupation”. It impinges national security as well as sovereignty, nationality and independence of Nepal. As the term of the Agreement is 199 years, according to Article 16(i), such “occupation” will last for more than another millennium!
This barrage submerges Nepal’s territory and forces displacement on local inhabitants every monsoon. Simply because India doesn’t open gates on the barrage, which, although in Nepali’s territory, is under Indian control, even when Koshi River is flooded. Of 56 gates hardly a few are opened even when flood crests the barrage. India “obliges” Nepal after repeated requests to open less than half of the gates.
As a result of late king Mahindra’s effort, Koshi Agreement was amended in December 1966. After its revision the title of Article 3 was changed by replacing word “occupation” with “use”
[“Authority for Execution of Works and occupation use of Land and other Property”]. However the provision related to it was untampered (with regard to occupation) and it was refurbished a little.
Revised provision has retained the world “occupation”. Post revision, the provision reads: Nepal “shall permit the occupation, for such period as may be necessary of all such lands and places as may be required for the proper execution of the Project respective constructions.”
Gandak agreement and barrage
Gandak agreement was signed on December 4, 1959 (revised on April 30, 1964) to control flood in lower riparian area in India (the barrage is built at the border between Nepal and India) and to
irrigate agricultural land, similar as under Koshi agreement. The barrage construction, envisaged by the agreement, was completed in 1968, which was started in 1963. Security ramification of this agreement lies in Article 6 of Gandak agreement, which is related to “Ownership, Operation and Maintenance of Works”. There is provision for “all works connected with the Project in the
territory of Nepal will (to) remain the property of and be operated and maintained by the Government of India.” As the agreement stays in force for an indefinite period, the project is to be
“operated and maintained” by Government of India (GoI) for indefinite period. A case of territory of a sovereign country under control of foreign nation for indefinite period, which impinges Nepal’s security as well as sovereignty, independence and nationality.
Like Koshi barrage, Gandaki barrage too is not opened to allow floodwater during monsoon with the same effect: submergence and involuntary displacement in Nepal.
Project implementation modality Koshi and Gandak projects are not under BOOT (build, own, operate and transfer) modality. These are bilateral projects of the governments of Nepal and India, financed by India. However, full control is exercised solely by India in the territory of sovereign Nepal. Nepal has no say in the operation and maintenance of these projects. This arrangement impinges Nepal’s sovereignty. Since these two barrages are bilateral projects, these should have been operated and maintained jointly.
Karnali (Chisapani) Multipurpose Project
Over 400 students from Nepal were sent to Roorkee College in preparation of implementation of Karnali (Chisapani)) multipurpose project in 1980s (its installed capacity is 10,800 MW) with
Indian collaboration. But it has yet to be implemented. There is no official notation/record in this respect. However, unofficially it has been learnt that late king Birendra decided to shelve the project after learning that India planned to deploy Indian security force in the project area. It can also be deduced from the writing of Jagat Mehta, former Indian external affairs secretary too.
He has written that “Stray suggestions such that Karnali would be of such vital importance for India that it might have to be protected by Indian security forces only deepened the apprehensions that cooperation with India could jeopardize Nepal’s sovereignty” in his paper titled “India-Nepal relations: a victim of politics” included in the book titled “India-Nepal Relations – The Challenge
Ahead”, published by Observer Research Foundation in 2004. This statement reflects fear psychosis on the part of India. India doesn’t wish to be dependent on Nepal and is apprehensive that Nepal too can, for example, shut off electricity supply to India. India has never formally broached the idea of deploying Indian security force in Nepal’s territory,but it has already done so in Koshi and Gandak barrages. In similar manner she is highly likely to do so in future projects.
Security of investment
Nepal’s current federal MP Radheshyam Adhikari, representing Nepali Congress and Bibeksheel Sajha party, in Upper House had opined in January 2010 that “India can propose to deploy her own security force to protect her investment in Nepal” and he didn’t deem such proposal unnatural, in an article published in a vernacular weekly named “Yo Sata”.
By extension every country that invests in nepal will be entitled to same security facility. This amounts to issuing rain cheque to all countries that invest in Nepal to deploy their security force to
protect their investment. While Nepal is endeavouring to attract foreign investment, if this kind of concept is to become policy, foreign security force will swarm Nepal.
Important question that begs answer is, does this statement reflect policy of Nepali Congress party that he represents in the parliament (including Bibeksheek Sajha party)? Moreover, it raises another question: do other political parties of Nepal also subscribe to this idea of his? Nepal Communist Party is in the government now and one wonders if NCP too is agreeable to this sentiment! One cannot forget that NCP was instrumental in signing Mahakali treaty with present PM Mr KP Oli being one of the main protagonists. Will Indian security force be deployed in the powerhouse of Pancheshwar project that will be located in the east bank of Mahakali River (in Nepali territory)? As India plans to use Nepal’s share of electricity generated by this project, she will become
dependent on this project and India doesn’t like being dependent on Nepal.
Conclusion
Bilateral projects implemented jointly with India have impinged Nepal’s sovereignty. India wants to implement more of such projects in Nepal for flood control and irrigation in India. Nepal’s policy makers need to do introspection if Nepal should allow India to implement projects in Nepal in the manner of Koshi and Gandak barrages. Government of Nepal needs formulate clear and specific policy with regard to security ramification of harnessing water resources in order to ensure that Nepal’s sovereignty, independence and nationality is not compromised.
Paper presented by the auhor at a seminar on Development Strategy for Water Resources Management in Nepal, Friday, June 29, 2018 (Ashad 15, 2075) Organised by the Association of Former Career Ambassadors of Nepal (AFCAN). Thanks AFCAN-Ed