Another, after Arun

LESS than a year after winning the battle
to halt the construction of a mammoth
hydropower scheme in Nepal, NGO
activists say the lessons from the "suspended Arun iii megaproject have yet to
be fully learned". After the World Bank
(WB) suspended the more thkn us $1 billion-project in August 1995, all attention turned to improving the country's
energy efficiency and developing smaller hydropower projects as "cheaper and
more locally manageable alternatives".

But activists now seem to be worried
about plans for another hydropower
project - the us $444-million Kali
Gandaki, a scheme in mid-western
Nepal - the construction of which is
expected to start wit4iin this year and be
over by AD 2001.

The Kali Gandaki project would
produce 144 mw of power in a country
where only 13 per cent of the 21 million
people have electricity. Mainly funded
by the Asian Development Bank (ADB)
and the Overseas Economic Cooperation Fund of Japan, the project includes
a 44-m high reservoir for a run-of-the-
river dam along the Kali Gandaki river.
"The project is not burdened with many
impacts typical of large hydroelectric
development projects," said a March
1996 wB summary of the environmental
impact assessment for the project.

But activists cited it as an example of
the ADB'S "mindset of megaprojects" in
energy generation during the w13's
annual meeting which concluded in
Manila in May. "The lessons from Arun
in have not been considered and learned
at all," said Gopal Siwakoti of the
International Institute For Human
Rights, Environment and Development
(INHURED), a Nepalese group that led the
anti-Arun campaign. Siwakoti says that
there is a list of some 20 smaller hydro-
electric projects, powered from one to
60 mw, that are viable for Nepal and do
not need largescale foreign loans.

The WB has also assured that it will
help develop alternative projects after
Arun. But NGO activists say the ADB has
yet to seriously consider this "economically viable alternative framework" for
power generation in Nepal. Some community-based power projects, powered
from one to five megawatts, are already
operational in some parts of the country, said Siwakoti, and informed that
Arun iii was halted as several alternatives were available.

In the 38-page summary of the Kali
@andaki's environment report, the ADB
@ays the project is needed to boost efficiency, or use renewable energy like
,solar or wind energy for which smaller
hydropower schemes are "promising
but supplementary". The WB says that
36 mini and micro hydro projects that
provide power to remote parts of Nepal,
are costly on a per-kilowatt basis,
contribute only a small amount to the
total capacity and are also time-
consuming to build.

Nepal has a huge potential for
hydroelectric power with only 0.3 per
cent of it tapped so far. Power needs are
projected to reach 433 mw by AD 2000.
Current energy production of Nepal
stands at 222 mw, resulting in power
outages in the capital Kathmandu.

The WB says, the project will reduce
adverse impacts' by adopting measures
like relocating 12 households and compensating residents for loss of land and
income, and providing for a fish hatchery and fish entrainment measures. The
WB's environment report adds that thedam height makes sure that holy sites
along the river are not inundated - the
Kali Gandaki being one of the country's
sacred rivers.

INHURED also says that as the cost
estimates climb with more foreign funding, planning and construction would
likely be led by foreign firms and consultants, with little local involvement.
The group wanted more details on
financing plans and electricity costs,
emphasising that Nepal's power rates
are twice that of India's. The worry is that
power from Kali Gandaki would be fed
to urban areas, depriving the rural folk.

The group also seeks greater public
participation in power projects, saying
that people should not only be
informed, but have the right to influence implementation. Siwakoti suggests
that the Nepal government and donor
institutions should use the next few
years to draw up short-term and long-
term policies for energy planning,
including smaller projects, instead of
rushing into the Kali Gandaki project.

Since the WB froze the Arun iii project due to environmental concerns, the
Nepal Electricity Authority has been
looking into smaller power projects,
urging private sector participation and
improving efficiency of electricity supply. The ADB, on the other hand, assures
that Kali Gandaki is "acceptable from
the view of timing, cost, risk and environmental perspectives".

The dam's 'adverse impacts' on
forests and fisheries downstream the
power station will be mitigated, it
added. "In balance, the project provides
a reasonable level of environmental protection and mitigation, serves the
regional desire for development and
meets Nepal's need for electric power,"
the WB report concluded.

Siwakoti and Arjun Kumar Karki of
the NGo, Federation of Nepal, said, "We
hope the government and donors take
the Kali Gandaki as a great challenge
and a unique opportunity to re-establish their credibility and integrity after
Arun III disaster."

Activists opine that the era of
megaprojects is far from over despite
the WB'S freezing of Arun and its 1994
pull-out from the huge Sardar Sardovar
dam project on India's Narmada river.
They need not look far for proof. the
governments of Nepal and India have
agreed to build a 315-m high dam to
harness the Mahakali river, on Nepal's
western border with India. The project,
said to cost us $4 billion, is expected to
churn out 6,450 mw of power, to be finished within eight years. A publilb interest litigation has been filed by NGOS
seeking more information on this
megaproject.