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Nepal, India to continue marathon for cementing giant Pancheshwar hydro-project

Nepal and India failed to achieve breakthrough on finalising the Detailed Project Report (DPR) of Pancheshwar Multipurpose Project to be developed on the Mahakali river, which borders India from Nepal’s western side.

Kathmandu: Nepal and India failed to achieve breakthrough on finalising the Detailed Project Report (DPR) of Pancheshwar Multipurpose Project to be developed on the Mahakali river, which borders India from Nepal’s western side.

Nepal’s Ministry of Energy, Water Resources and Irrigation said in a statement on Sunday that the issue of water sharing and determining the benefit from the project to each side, remained unresolved during the fifth meeting of a team of experts held in Kathmandu, on October 6-7. The minutes of the decisions taken by the meeting were prepared on Sunday after a marathon two-day meeting, officials said.

“The next meeting of the team of experts would soon be organised to exchange detailed opinions regarding the sharing of water and determining the benefits from the project to finalise DPR,” the ministry said.

Nepali officials participating in the meeting said that most other issues have been resolved but these two contentious issues required further detailed discussions.

“Most of the initial opinions of both sides regarding the DPR have already been incorporated in the draft of the DPR,” the ministry said.

The multipurpose project to be developed in the border river aims to generate 6,480MW of power, irrigate lands of both sides and control floods.

The project is an integral part of the Mahakali Treaty signed in 1996 between the two countries and its delayed implementation has invited criticism in Nepal as proponents of the treaty have nothing to show for the benefit of the treaty that they had claimed during the signing of the treaty.

The DPR of the project, which was supposed to be prepared within six months from the date of signing of treaty, has remained pending for nearly three decades, raising questions about the seriousness of both sides to develop the project.

However, lately two sides are moving forward to resolve the differences so that the project could be developed.

Bilateral negotiations have accelerated at different levels since two sides agreed to finalise the DPR within three months when Nepali Prime Minister Pushpa Kamal Dahal visited India from late May to early June.

As instructed by the fourth meeting of the team of experts in July, the Indian company—state-owned Water and Power Consultancy Services (WAPCOS) updated the DPR which was first prepared by it in 2016, according to the ministry officials.

“Nepal and India differed over whether to include the issue of existing use of water by India in the DPR,” a member of Nepali delegation told India Narrative.

As per the Mahakali Treaty, two countries had agreed to share water equally after leaving aside the existing use of water by both sides.

This has enabled India to receive more water from the river as it has been irrigating its large swathes of lands from the river’s water.

Nepal on ther other hand, has failed to utilise its water on a large scale as it is a tiny country and does not have much land to be irrigated and the country has also failed to develop irrigation facilities.

“Our stance remains that the DPR is a technical report where the issue of existing use of water should not be included,” the Nepali delegation member said.

Currently, India has been using the water of Mahakali which is also known as Kali or Sharada river in India through downstream Sharada barrage.

The difference over whether to include this issue in the DPR has also affected bilateral negotiations over determining the benefit of the project to either side, Nepali officials said.

“There is no issue with regard to determination of benefits from hydropower generation as it will be equally shared between the two sides,” Nabin Raj Singh, spokesperson at the ministry told India Narrative “But there is still a gap in understanding when it comes to determining who gets how much benefits from irrigation and flood control.”

Nepali officials said that Nepal’s understanding is that Kathmandu gets negligible benefits from irrigation and flood control because Nepal has little land available to irrigate and flood control and India will almost fully benefit from flood control.

A senior ministry official said that both sides are on the same page to keep Nepal’s benefit less than 20 percent of total benefit to both countries from irrigation and flood control. “But Nepal’s claim is that its benefit should be in the range of only five percent only,” the official said.

Madhu Bhetuwal, chief executive officer of Pancheshwar Development Authority earlier told the India Narrative that Nepal could irrigate a maximum of 100,000 hectares of land following the completion of this project while India could irrigate as much as 3.5 million hectares of land.

India has a larger land mass to irrigate its land from the water of Mahakali. The dam to be erected to develop the hydroelectric project will help to regulate the flow of water minimising the flood risks for India as a downstream country.

Quantifying the benefit for each side is important because investments will also be shared by two sides based on benefits.

As per the Mahakali Treaty signed in 1996, the two sides have agreed in principle that the cost would be shared based on the benefits to each side in the areas of power, irrigation and flood control.

According to the Mahakali Treaty, the project will be designed to produce the maximum total net benefit. All benefits accruing to both the Parties with the development of the Project in the forms of power, irrigation, flood, control etc., shall be assessed, article 3 of the Mahakali Treaty says. “The cost of the project shall be borne by the parties in proportion to the benefits accruing to them. Both The Parties shall jointly endeavour to mobilise the finance required for the implementation of the project.”

After the signing of the Mahakali Treaty, the two countries had prepared separate DPR of the project. Later, the WAPCOS had prepared and submitted the DPR of the project in 2016 by merging the two separate DPR. Still, two sides were not on the same page on several issues of the merged DPR, consequently delaying the finalisation of the DPR.

After the DPR is finalised, the next step will be to generate necessary resources to implement the project and acquire the land to develop the project.

“Acquiring land will also be complicated as the cost of land acquisition has been growing rapidly in recent years,” Bhetuwal Told India Narrative recently. “About 20-25 percent of the total cost is expected to be covered by land acquisition.”

Also Read: Nepal, India could tie up loose ends as talks on Pancheshwar hydro-project kick off in Kathmandu