Editorial: Upper Tamakoshi lessons

After spending nearly double the estimated time and money, the 456MW Upper Tamakoshi hydropower project, Nepal’s biggest so far, is finally complete. The electricity it generates will be more than enough to meet the country’s wet season demand, and it will significantly reduce power imports from India in the dry season. Perhaps the best part of the project is that it was financed entirely by domestic investors.

Inaugurating it on July 6, Prime Minister KP Oli said Upper Tamakoshi had given the country greater confidence to undertake projects of national importance by utilizing its own human and financial resources. That is certainly so. Yet the project also offers some cautionary lessons. Its developers seem to have overlooked future hikes in the exchange rate for dollars—used to pay foreign suppliers and consultants—when coming up with the estimate of Rs 35 billion. If interest on the revised additional cost is to be factored in, the eventual bill would come to Rs 85 million.

By contrast, the delay in completing the project was less under their control. Supplies were hindered for many months after the 2015 earthquakes and the subsequent border blockade. Frequent floods and landslides also slowed down the project. Then came Covid-19 and the lockdowns. But, yes, more thought could have gone into choosing the contractors. For instance, the Indian contractor that was initially chosen did not have the expertise to carry out a key task. The developers had to appoint another contractor when 95 percent of the work had already been done. Domestic investors will feel confident, just as the prime minister said, only when their investment yields timely and expected returns.

The completion of Upper Tamakoshi is a huge milestone towards Nepal’s energy sufficiency. Soon, the country may discontinue importing electricity, and instead, export some, all-year-round. We hope Upper Tamakoshi is the final nail in the coffin of the dreaded load-shedding, and cheaper and more reliable electricity will spur economic growth. If we could also learn from its construction and better manage our future projects, the country will be well on its way to achieving its much-vaunted hydropower potential.