Silver lining for Pancheshwar project

Prime Minister Pushpa Kamal Dahal’s India visit last month has rekindled hope that the Pancheshwar Multipurpose Project will finally move ahead. Although there are some contentious issues that remain unsettled despite several rounds of talks between Nepal and India in the past years, the two sides have agreed to expedite the bilateral discussions to finalize the detailed project report (DPR) of the project within three months. They have also agreed to conclude the modalities of the project implementation within one year after the DPR approval. In line with the agreement reached at the top level, a meeting of the Pancheshwar Development Authority (PDA) was held in Pokhara this past week. The meeting produced some positive results. As per the agreement, the two sides agreed to renew the term of the expert panel by six months and to convene the meeting of the panel within 10 days to discuss the technical aspects of the DPR. The meeting of the expert panel has not taken place since 2018. During 2016-2018, there were a series of meetings in an attempt to finalize the DPR, but both sides failed to resolve the differences on certain contentious issues. The panel stopped meeting and the tasks related to the proposed 6,480 MW project on the Mahakali river were halted as a result of the Covid-19 pandemic and the map row between Nepal and India. In 2016, PDA had prepared a draft DPR and submitted it to both countries for feedback. To date a mutually acceptable DPR has not been finalized, which remains one of the major roadblocks hindering the project development. While Nepal and India have shown eagerness to finalize the DPR, there are other contentious issues that remain unsettled. Nepal wants a share of the irrigation benefit that India stands to get from the multipurpose project. But the India side has been insisting that since Nepal has a smaller cultivable area than India, it is natural for India to get greater benefit. It has also pointed out the greater risk of flood and inundation that India will be exposed to due to the project. “We have offered to meet the full cost of the irrigation component. The details are yet to be worked out,” says an Indian official. There are also issues concerning the division of cost between irrigation and power. As Nepal wants to put a lot of cost in the irrigation component, there are differences on how to divide the overall cost. Ranjit Rae, former Indian ambassador to Nepal, says both countries should show flexibility in resolving the outstanding issues, namely sharing of water as well as irrigation benefits and cost, so that the DPR can be finalized within three months as prescribed by two prime ministers. “This will be a huge step towards the implementation of the mega multipurpose project that will not only transform the economies of far-western Nepal and the Kumaon region of Uttarakhand,” Rae says. “It will be a significant pillar of our bilateral cooperation and a global symbol of how two neighboring countries can work together in the sensitive area of water resources and energy.” Pancheshwar Multipurpose Project is a bi-national hydropower project to be developed in Mahakali River bordering Nepal and India. Development of the project is an important centerpiece of the Mahakali Treaty between Nepal and India, which states that equal sizes of underground power houses of 3,240MW will be constructed on each side of the Mahakali river in India and Nepal. The project also offers the benefit of regulated water for irrigation to a vast area of agricultural land in both countries as well as the benefit of flood control downstream. According to officials, there has been gradual progress on these projects. Previously there were more than 500 disputes which now have been narrowed down to 127, according to Madhu Prasad Bhetuaal, joint secretary at the Ministry of Energy and Resources. Over the past few years, there has been good progress in the construction of India-invested hydropower projects as well. A senior Nepali official says that this time India has shown eagerness to finalize the DPR of Pancheshwar project. “We are hopeful that India will adopt flexibility to sort out the key contentious issues,” the official adds. In 2017, too, there had been some serious efforts to finalize the DPR, but they could not yield any progress, mainly due to the internal political situation of Nepal. The Mahakali Treaty is already a contentious issue in Nepal, so there is a need for an all-party consensus while finalizing the content of the DPR. Former Nepali ambassador to India Deep Kumar Upadhyay, who  had played a significant role in sorting out the differences concerning the project during the Sher Bahadur Deuba administration, says Indian Prime Minister Narendra Modi is interested in taking the Pancheshwar project ahead. “Former water resources minister of India Nitin Gadkari had told me that Prime Minister Modi was interested and that a high-level team from both sides must steer the project,” says Upadhyay. “Gadkari had also warned me that the project would not move ahead if the two sides continued to engage in a blame game.” He views the resumption of talks at the bureaucracy level as a positive step, but insists that only the top political leadership can settle the disputed issues. “There should be a strong political will to direct the bureaucracy to sort out the key contentious issues,” adds Upadhyay. Deepak Prakash Bhatt, a CPN-UML leader from the far-western region, says the domestic political situation is favorable to move ahead, as major political parties are not opposing the project despite some reservations. “If the technical teams of both countries work seriously, I believe all contentious issues can be sorted out,” he says.