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Comparison: Lesotho and Nepal

Even the most underdeveloped landlocked country Lesotho, which is also an enclave, was able based on international law (Ref) to reach an agreement with South Africa to use the proceeds from the supply to the latter regulated water discharged after power generation to construct free of cost almost the entire civil works of the Lesotho Highland Water Project (a multipurpose hydro power project) and also to receive annually royalty in substantial amount.
Nepal Ignorant of Vast Hydro Potential
Unfortunately Nepal is proving itself utterly ignorant of the vast economic  values  of our water resources and thus is  seen determined to implement large storage dam projects, like the Buri-Gandaki High Dam Project, West Seti High Dam Project etc., completely discounting  our right to a reasonable share in the enormous benefits to accrue  to  India  from the use of regulated water supplied  from our country.
Negotiating Skill of Lesotho
According to the World Bank’s published report Lesotho was even able to raise  to 56% its share in net benefits accruing to the South Africa from the use of regulated water supplied to the latter whereas such share was limited to 50% only in Columbia River Treaty  between the USA and Canada.  Lesotho had supplied to South Africa  27.5 cumec  regulated water after the completion of the entire First Phase of the multipurpose Lesotho Highland Water Project (LHWP). The multipurpose LHWP project included the construction of two high dams, 72 MW hydropower, 82 kilometers long tunnels, roadways etc.
Financial Aspects
The South Africa provided US $ 3 billion in 1995 prices to implement the First Phase of the  multipurpose LHWP project, which excluded the cost of  the hydro-electric component. After the completion of First Phase construction Lesotho started to receive annually US $ 38 million in royalty. The royalty amount is subject to periodic adjustment to cover inflation. The invested amount is expected to be fully recovered within 50 years. After that time a new royalty rate will be fixed.
Acute  Water  Scarcity in India
In India the  demand  for  agricultural  water  dominates  the  total  demand  for  water.  India  has  the  second  largest  population  in  the  world.   There  are plentiful  rains over  most  of  the country  but  they  are  concentrated  in  a  few  months.   Mr. Chaturbedi M.C. had  claimed many years back  that  by  2005  the  total ground  and  surface  water  would  have  been  assigned  to  users  and  thus  further  irrigation  would  be  restricted.  India is now experiencing acute water scarcity.
India Willing to Buy
India is showing a great deal of  interest in development of  Nepal’s storage dam projects  that would help to increase virtually  by four times the sustainable flow of our major rivers.  Few  years  back the information  provided   in  the  Indian  news  media  clearly  indicated  that   the  Government  of  India  was engaged  in  developing  a   policy  to  obtain  the  consent  of  Nepal  through   revenue  sharing  agreements  in respect of the regulated waters discharged from the storage reservoirs built inside our countries.
A special high level commission constituted by the last Bajpee Government of India had even started to function to conduct studies on revenue sharing. Unfortunately, our government  is not even  as  yet  paying  any attention to this highly important development  that would have helped  our country to gain access  to a  totally new  stream of enormously large benefits accruing  free of cost from  the large storage dam projects to be implemented inside our country.
It is quite unfortunate that our government is now bent on  granting  license to   private developers  to implement large storage dam projects completely ignoring  their  vast water  export potential. Very soon the West Seti storage dam  project and few others  are  going to be the casualty of our government’s  wrong  decision.
Bilateral  Negotiation on Downstream Benefits
Nepal must immediately initiate negotiation with India on downstream benefit sharing. Nepal is certain to reach satisfactory agreement with India on downstream benefit sharing because India is experiencing acute scarcity of water particularly in dry season. Needless to say that the much praised ROTI-BETI bilateral relation between Nepal and India would be nothing more than empty rhetoric if our two countries  failed to agree on downstream benefit sharing principles established under International Law  by Canada, USA, Lesotho and South Africa.
Beware of Give Away in Hydro Development
Even for very rich countries like the USA and Canada possessing enormously large water resources  the settlement of the issues related to sharing of downstream benefits accruing to lower riparian country from the use of regulated water required direct involvement of the head of  government of the country. Three Presidents, Eisenhower, Kennedy and Johnson from the USA side, and   two  Prime-ministers Diefenbaker and Person from Canadian side were directly  involved at various stages in finalization of the decision to implement the project to use the potential of the Columbia river.  Unfortunately our country is entrusting FOREIGN INVESTMENT BOARD to look after all aspects of our large storage dam projects solely from the view point of power generation compromising all other very important components of water resources development.
Mishandling of our large water resources projects would lead  to their devastation for ever.  Paul D. Terrell, Chief Advisor Consult of Karnali Multipurpose Project has written in an article published in magazine HIMAL in May/June 1991 ” Nepal should beware of unintentional give away in hydro development, and not rush to compromise the optimum development for the sake of quick deal.  The present institution should be wary of giving away Nepali children’s rightful inheritance.”

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