Ratna Sansar Shrestha, FCA’, Nepal

Nepal is not endowed with natural resources like fossil fuel, precious metal, high value stones and other minerals.

Nature’s best gift to Nepal is water resource, which has yet to be optimally harnessed. Harnessed properly, it can draw Nepal’s lifeline leading to her prosperity. Water resource is important not only from the perspective of generating hydro power but more so from the perspective of drinking water supply including sanitation, irrigating agricultural land for increased agricultural production and productivity as well as for animal husbandry, fisheries, recreation, inland navigation, etc.

However, harnessing of water resource under bilateral treaties with India so far has resulted in impairment of Nepal’s sovereignty, independence and nationality as these rivers are deemed to be trans boundary.

Then, there is a question of security of foreign investment, which too has bearing on sovereignty, independence and nationality.

Transboundary Rivers:

As Nepal’s major rivers like Koshi, Gandaki, Karnali and Mahakali (Mahakali has been declared to be a border river in the Mahakali Treaty) that originate(s) in China (Tibet) and flow to the Bay of Bengal via India and Bangladesh, these are deemed Transboundary Rivers.

India cannot generate hydro power in significant quantum from these rivers for lack of head (only low head projects are possible in India on these rivers). In reality, India wishes to achieve temporal transfer of water by storing rainwater (damming these rivers) in Nepal to generate lean season augmented flow much more than electricity to meet ever increasing demand for drinking and sanitation and for irrigation to increase food crop production in India for her ballooning population.

Besides, India hopes to control flood in UP, Bihar, West Bengal, etc. by building dams in Nepal. Electricity generated from rivers in Nepal is secondary for India.

The then Indian water resource minister Saifuddin Soz admitted in September 2008, “Our main interest is flood control and irrigation. Those are our first and second priority.

If we get hydroelectricity as byproduct, that will be a bonus for us.”

Therefore, India plans to have these rivers dammed in Nepal to build reservoir projects like Koshi High Dam, Karnali Chisapani Dam, Pancheshwar Dam, 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 how these impinge on Nepal’s sovereignty, independence and nationality.

Koshi Agreement and the Barrage:

The Koshi Agreement was signed on April 25, 1954 between the Governments of Nepal and India and was amended on December 19, 1966. India wished to construct a barrage to tame the Koshi River, known as “sorrow of Bihar” and the basic objective of signing the agreement was to control flood in Bihar and to irrigate land therein. Construction of the barrage had begun in 1958 and completed in 1962.

Article 3 of the Koshi Agreement (title: “Authority for Execution of Works and Occupation of Land and other Property”) undermines Nepal’s sovereignty. The word “occupation” is 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 the Koshi barrage is still under Indian “occupation”.

It impinges on 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!

As a result of late king Mahendra’s effort, Koshi Agreement was amended in December 1966. After the amendment, the title of Article 3 was changed by replacing the word “occupation” by “use” [“Authority for Execution of Works and use of Land and other Property”].

However, the provision related to “occupation” was not tampered with and it was even refurbished a little.

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 respective constructions.”

According to Department of Irrigation, Nepal has availed 9,034 hectares of land for the construction of works related to the Koshi barrage. Effectively, Nepal’s sovereignty over this quantum of land stands impaired and will stay as such till 2153 AD.

Further, this barrage submerges 9,807 hectares of land and 33,000 hectares is water logged in Nepal and forces displacement on local inhabitants every monsoon.

Simply because India doesn’t open gates of the barrage, which, although is in Nepal’s territory, is under Indian control, even when Koshi River is flooded. Of the 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.

Due to construction of this barrage, flood in 2.1 million hectares of land in Bihar is controlled, the value of which has not been worked out.

Flood control has value in terms of curtailment of devastation as well as avoidance of rehabilitation/resettlement subsequent to the flood.

Similarly, 1.3-million-hectare agricultural land is irrigated in India from the water stored in the barrage.

The value of such lean season augmented flow availed to India, based on the rate agreed between Lesotho and South Africa under Lesotho Highland Water Project (25 MUSD/year for 18 cumecs) comes to 611 MUSD/year (equivalent to Rs 66 billion/year).

Logically, India should pay this amount to Nepal by way of sharing benefit (India has not recompensed Nepal for damages either).

While Nepal has borne the opportunity cost of submerged 9,807 ha. land and water logged 33,000 ha. land, the value of such loss to Nepal has neither been calculated nor recompensed.

Similarly, Nepal also suffers incalculable loss due to involuntary displacement. Only benefit to Nepal is about 6.5 MW power from Kataiya powerhouse in Bihar, value of which comes to 1.75 MUSD/year.

Gandak Agreement and Barrage:

The Gandak agreement was signed on December 4, 1959 (revised on April 30, 1964) to, like under the Koshi agreement, control flood in lower riparian areas in India (the barrage is built at the border between Nepal and India) and to irrigate agricultural land there.

The barrage construction, envisaged by the agreement, was completed in 1968, which was started in 1963. Article 6 of Gandak agreement, which is related to “Ownership, Operation and Maintenance of Works”, undermines Nepal’s sovereignty.

There is a provision for “all works connected with the Project in the territory of Nepal will remain the property of and be operated and maintained by the Government of India.”

As the agreement stays in force for an indefinite period and since the project is to be “operated and maintained” by the Government of India (Gol) for indefinite period,

Nepal’s such territory “will remain property of” India for indefinite period of time.

According to Nepal’s Irrigation Department, 542 hectares of land was made available for the project related activities by Nepal.

The sovereignty of Nepal on this quantum of territory is under control of India for perpetuity, which impinges Nepal’s sovereignty, independence and nationality to that extent.

Quantum of flood protection from the Gandak barrage in India is not known, nor is its monetary value.

Water from it irrigates 1.8 million hectares of agricultural land in India and, using Lesotho formula, benefit to India amounts to 820 MUSD (equivalent to Rs. 90 billion) per year, which India should have been paying to Nepal.

India neither recompenses Nepal for inundation nor for the involuntary displacement of local inhabitants.

Project Implementation Modality:

The Koshi and Gandak projects are not under BOOT (build, own, operate and transfer) model.

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 structures.

This arrangement impinges on Nepal’s sovereignty. Since these two barrages are bilateral projects, these should have been operated and maintained jointly by Nepal and India.

Karnali (Chisapani) Multipurpose Project:

Close to 500 students from Nepal were sent to Roorkee College in India to obtain engineering degree in preparation for implementation of Karnali (Chisapani) multipurpose project in 1980s (installed capacity 10,800 MW) under Indian collaboration.

But, it has yet to be implemented. There is no official notation/record as to why it has not been implemented. However, unofficially it has been learnt that late king Birendra decided to shelve the project after learning that India planned to deploy her security force in the project area.

Jagat Mehta, former Indian Foreign Secretary, has confirmed it. 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 can, for example, shut off electricity supply to India.

Pancheshwar Project:

The question is: if Pancheshwar project is to be implemented, will Indian security force be deployed in the powerhouse that will be located in the east bank of the Mahakali River (in Nepal’s territory)?

As India plans to use Nepal’s share of electricity generated by this project, she will become dependent on this project and India suffers from fear psychosis in being dependent on Nepal.

In such a scenario it would be of vital importance for India and, therefore, it is likely that India would demand to deploy her security force in powerhouse in east bank of Mahakali River (Nepal’s territory) too. In which case Nepal’s sovereignty will be undermined there too.

India has never formally broached the idea of deploying Indian security force in Nepal’s territory, but it has already done so in the Koshi and Gandak barrages. In a similar manner, she is highly likely to do so in future projects, too.
Security of Investment:

Nepal’s current member of the Upper House Radheshyam Adhikari, representing Nepali Congress and supported by Bibeksheel Sajha Party, had said in January 2010 that “India can propose to deploy her own security forces 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 endeavoring to attract foreign investment, if this kind of concept is to become a policy, Nepal will be “pockmarked” with areas in which foreign security forces will be deployed and Nepal’s sovereignty in such areas will get impaired. Important question that begs answer is, does this statement reflect the policy of Nepali Congress Party that he represents (including Bibeksheel Sajha Party, which supported him in the election)?

Moreover, it raises another question: do other political parties of Nepal also subscribe to this idea of his? Nepal Communist Party (NCP) is (was…) in the government now and one wonders if NCP too agrees with this “doctrine”! One cannot forget that the NCP was instrumental in signing Mahakali treaty with present PM Mr. KP Oli being one of the main protagonists.

FDI Projects in the Pipeline:

The GMR is planning to implement the Upper Karnali project in Nepal.

Going by Adhikari doctrine, India will have right to deploy her security forces in this project too, impairing sovereignty of Nepal in the project area.

There are innumerable projects in the pipeline with foreign direct investment. In each of such projects, the Adhikari doctrine would mean more foreign security forces in Nepal, and sovereignty over more territory of Nepal would get impaired.

With every water resource project implemented with foreign direct investment, a little bit of Nepal’s sovereignty, independence and nationality will get impinged upon.

Conclusion and Recommendations:

Bilateral projects implemented jointly with India have impinged Nepal’s sovereignty. India wants to implement more projects in Nepal for flood control and irrigation in India. Nepal still has “immense” water resource, mostly untapped.

Implementation of two bilateral treaties has impaired Nepal’s sovereignty on 9,034 hectares of land availed for the Koshi project and 542 hectares of land for the Gandak project, totaling 9,576 hectares.

In this manner, of the 147,181 square kilometers of Nepal’s territory, sovereignty over 95.76 square kilometers has already been impinged.

With the implementation of more projects, sovereignty over more territory of Nepal will get impaired.
Continuing on with the current trajectory of policy and practice of bilateral “development” will mean that Nepal’s water resource potential will be used up to serve Indian interest and Nepal’s sovereignty, independence and nationality will get further undermined with the implementation of each water resource project.

Water resource potential and unimpaired territorial sovereignty will continuously dwindle down with the implementation of each water resource project.

Nepal’s policy makers need to do an introspection to decide if Nepal should allow India to implement projects in Nepal in the model of the Koshi and Gandak barrages.

The Government of Nepal needs to formulate clear and specific policy with regard to the impact of harnessing water resources on her sovereignty, independence and nationality in order to ensure that Nepal’s sovereignty, independence and nationality are not further compromised.

Similarly, the GoN needs to out rightly reject the principle propounded by MP Mr. Adhikari without any delay.
End text.

Text courtesy: From a journal on “Strategies for the Development and Management of Nepal’s Water Resources’ published by the Association of Former Career Ambassadors of Nepal (AFCAN December 2020), and Edited by Dr. Khaga Nath Adhikari.

The author is: A management professional, corporate lawyer and fellow of the Institute of Chartered Accountants of Nepal.
Thanks AFCAN and the author of the article Mr. Ratna Sansar Shretha, Nepal: Editor telegraphnepal.com
Book source: Ambassador Ram Bhakta Thakur, President AFCAN.