‘It’s good for the country, but my family may suffer’: Nepalese villagers in limbo as fate of Chinese-built dam hangs in balance

The new government’s decision on whether to revive a major hydroelectric project will have a profound effect on the lives of thousands of local residents

PUBLISHED : Saturday, 23 December, 2017, 4:09pm
UPDATED : Saturday, 23 December, 2017, 11:28pm

For months, Topnarayan Shrestha has waited for certainty about a project that threatens to uproot his family.

For more than four generations, Shrestha’s family has lived in Baseri village, around 60km west of Nepal’s capital Kathmandu , but the 42-year-old father does not know if that will be for much longer.

They await the fate of a proposed 1,200 megawatt dam project on the Budhi Gandaki River that will submerge his home and those of thousands of others.

“We have no other option,” Shrestha said. “You can imagine after living here for so long, obviously we will feel very bad to leave.”

His family is on the front line of a project that has become a political football, a much-needed potential source of electricity and a tangle of environmental and social concerns.

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If it goes through, the project will be one of the country’s biggest hydropower plants and help plug the gap in Nepal’s chronic shortfalls in electricity.

The country struggles with persistent power outages and the United Nations estimates that 15 per cent of its population, mostly in rural areas, are beyond the reach of the electricity grid.

Nepal’s answer is to make better use of its 6,000 or so rivers to expand power generation capacity exponentially and wean it off its reliance on supplies from neighbouring India.

“Hydropower is definitely required for us,” Thakur Prasad Sharma, managing director of Kathmandu-based Full Bright Consultancy, which has a worked on a variety of infrastructure projects in the country including hydro power schemes and railways.

“It’s high time we should focus on development now, infrastructure development, it’s really high time now.”

The Budhi Gandaki project, which is projected to cost nearly US$20.2 billion and will take eight years to build, is a key element of the plan but its future came into question in mid-November when a caretaker government led by the Congress party cancelled a development contract for the dam on the eve of elections.

China’s Gezhouba Group Corporation had signed a US$2.5 billion memorandum of understanding with the previous Maoist-led coalition government.

But that deal was scrapped when the Congress-led authorities terminated the agreement over the “irregular and thoughtless” way in which it was granted.

Nepali Congress senior leader Prakash Sharan Mahat said he had previously raised concerns about Gezhouba’s track record in Nepal, criticising the previous government’s non-transparent process in signing the agreement.

“This is not how you do business,” he said. “These standard rules and procedures were totally disregarded … we should follow the same standards, whether it’s a Chinese company, Indian company, or whatever company.”

But the Nepali Congress went on to lose the elections in a landslide, and the leaders of a coalition of victorious leftist parties – the Communist Party of Nepal (Unified Marxist-Leninist) and CPN-Maoist Centre – said the project would be “revisited”.

“If this government did any illegal and immoral things, we can invalidate this decision in one decision,” Ishwor Pokhrel, general secretary of the CPN-UML party, said. “But we’ll check what are the reasons – the reasons and the hidden reasons.”

The project is also a major component of China’s “Belt and Road Initiative”, a massive push to connect China with Europe via Asia through trade and infrastructure.

The Nepali Congress is seen as having close ties to neighbouring India, which views China’s growing investments in Nepal with increasing wariness. The incoming leftist coalition is seen as friendlier to China.

Analysts said the timing of the outgoing government’s decision could reflect bigger political issues at play.

Bhaskar Koirala, director of the Nepal Institute for Strategic Studies, said that even if there were irregularities in the bidding process, it was questionable for the agreement to be cancelled on the eve of the elections.

“This raises a lot of suspicions that this is political,” he said. “That will trigger a reaction from China as well, from Gezhouba, because that company also feels cheated … They’ve already invested so much money to sign the MOU.”

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Gezhouba said it was caught by surprise by the contract termination, but was hopeful the incoming government will simply invalidate the cancellation.

The company said it was ready to resume the project, having already sent two groups of specialists, including those who worked on China’s signature Three Gorges Dam on the Yangtze River, to visit the dam site.

Activists say that even if it does get the green light, there are other problems with the project.

Building the dam will mean creating a reservoir that will cover up 63 square kilometres in an area not far from the epicentre of the 2015 earthquake that devastated the country and killed nearly 9,000 people.

Ratan Bhandari, a Kathmandu-based water resources activist, said there were also dangers from landslides and erosion, as well as threats downstream to fish migration.

He also warned that it could cause a wider range of social and environment problems, such as flood control, and warned it could affect the downstream habitats of endangered species such as the Indian rhino and Bengal tiger.

The augmented water supply the project will produce will also benefit India, so the Nepalese authorities will have to discuss downstream benefits and royalties to the extra water with New Delhi.

On top of that, Nepal had to negotiate with India over royalties for supplying it with water, he said.

“If you have a big dam, definitely it will create big problems,” Bhandari said.

For residents in the area, including fishermen with little or no rights to land, the big concerns are compensation and whether the project will actually go through.

More than 8,000 households will be affected, according to Krishna Karki, project coordinator for the compensation programme.

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The government compensation will range between US$172-US$273 per square metre.

Karki said residents were hopeful that the dam would turn the area into a tourist hub that could be a boon to local industries.

“Locals are very much excited, they’re just worried about whether it will be happening or not,” Karki said from his office. “It’s a very big project for Nepal.”

Resident Danda Pani Ruwali, 74, said he and his family in Chainpur village were just waiting for the government’s decision on the project.

“We are hopeful that sooner or later, [the dam] will be built,” he said. “We’re also excited for everything, since we’ve never seen this kind of big project.”

But for some long-term Baseri residents such as Shrestha, the compensation process is proving difficult.

The process is also complicated by the fact that much of the land has been held by the same families for generations – meaning they have not had to deal with the process of buying and selling land before – and the exact ownership of fields, trees and water courses is often unclear.

Hundreds turned out in protests demanding more money from the government in December last year, which turned violent and ended with police firing tear gas.

Shrestha, now resigned, said he would only be able to afford to buy one-seventh of the land he owns now with his current compensation, enough to build a small house and raise a few animals.

“It will be a good thing for this country,” he said. “But if my family is not happy, who cares about the country?”

Additional reporting by Pradeep Bashyal