India Nepal Water Cooperation Pancheshwar Dam Project

India and Nepal are actively collaborating on water resource projects, most notably the Pancheshwar Multipurpose Dam Project. A revised detailed project report has been prepared, signifying renewed momentum for this bi-national initiative aimed at generating energy and enhancing irrigation in both countries. The dam is proposed on the Mahakali River (known as the Sharda River in India), which forms the international boundary between Nepal and the Indian state of Uttarakhand.

The Mahakali Treaty, signed in 1996, provides the overarching framework for the integrated development of the Mahakali River, encompassing the Sharda barrage, Tanakpur barrage, and the Pancheshwar Dam Project. Beyond Pancheshwar, India and Nepal are engaged in discussions and planning for other significant projects, including the Kamla and Bagmati Multipurpose Projects, the Sapta-Kosi High Dam Project and SUN Kosi storage cum diversion scheme, and the Karnali Multipurpose Project, underscoring the breadth and depth of their cooperation in water resource management.

The Pancheshwar Multipurpose Dam Project: A Cornerstone of India-Nepal Relations

The Pancheshwar Multipurpose Dam Project represents a significant undertaking in the realm of India-Nepal relations, embodying both the potential for enhanced cooperation and the complexities inherent in managing shared water resources. This ambitious project, envisioned as a cornerstone of bilateral ties, aims to harness the waters of the Mahakali River for power generation and irrigation, promising substantial benefits to both nations. However, its journey has been marked by delays and disagreements, underscoring the challenges of implementing large-scale infrastructure projects in a transboundary context. The preparation of a revised detailed project report (DPR) in 2019 signaled a renewed effort to overcome these hurdles and move towards the realization of this long-awaited project.

The Mahakali River, known as the Sharda in India, originates in the Himalayas and flows along the border between Nepal and the Indian state of Uttarakhand. This river is a vital source of water for both countries, supporting agriculture, industry, and domestic needs. Recognizing the importance of this shared resource, India and Nepal signed the Mahakali Treaty in 1996, which laid the foundation for the integrated development of the river, including the Pancheshwar Dam Project.

The Mahakali Treaty: A Foundation for Cooperation

The Mahakali Treaty, formally titled the "Treaty between the Government of India and His Majesty's Government of Nepal concerning the Integrated Development of the Mahakali River (Sharda River) including Sarda Barrage, Tanakpur Barrage and Pancheshwar Multipurpose Project," is a landmark agreement that defines the rights and obligations of India and Nepal with respect to the Mahakali River. The treaty addresses various aspects of water resource management, including water sharing, power generation, and benefit sharing.

The treaty's key provisions include:

• Equal Entitlement: Both India and Nepal are entitled to equal shares of the waters of the Mahakali River.
• Pancheshwar Multipurpose Project: The treaty provides for the construction of the Pancheshwar Multipurpose Project, including a dam, power plant, and irrigation facilities.
• Sharda Barrage and Tanakpur Barrage: The treaty addresses the operation and maintenance of the existing Sharda Barrage and Tanakpur Barrage, which were constructed by India on the Mahakali River.
• Benefit Sharing: The treaty outlines the principles for sharing the benefits of the Pancheshwar Project, including power generation and irrigation.
• Environmental Protection: The treaty emphasizes the importance of protecting the environment and mitigating the adverse impacts of the project.

The Mahakali Treaty was hailed as a significant achievement in India-Nepal relations, as it provided a framework for cooperation on a vital shared resource. However, the treaty has also been subject to criticism and controversy, particularly in Nepal, where some argue that it does not adequately protect Nepal's interests.

The Pancheshwar Multipurpose Dam Project: Aims and Objectives

The Pancheshwar Multipurpose Dam Project is the centerpiece of the Mahakali Treaty. The project aims to:

• Generate Electricity: The project is expected to generate approximately 6,480 megawatts of electricity, which will be shared between India and Nepal.
• Provide Irrigation: The project will provide irrigation to approximately 130,000 hectares of land in India and Nepal.
• Control Floods: The dam will help to control floods in the Mahakali River basin.
• Improve Navigation: The reservoir created by the dam will improve navigation on the river.
• Promote Tourism: The project is expected to attract tourists to the region.

The project is expected to bring significant economic benefits to both India and Nepal, including increased agricultural production, improved energy security, and job creation. However, the project also faces significant challenges, including environmental concerns, resettlement issues, and funding constraints.

Challenges and Delays: A History of Obstacles

Despite its potential benefits, the Pancheshwar Multipurpose Dam Project has been plagued by delays and disagreements since the signing of the Mahakali Treaty in 1996. Several factors have contributed to these challenges, including:

• Detailed Project Report (DPR) Discrepancies: Disagreements over the DPR have been a major stumbling block. The two countries have struggled to reach consensus on key aspects of the project, such as the height of the dam, the installed capacity of the power plant, and the distribution of water and electricity.
• Resettlement and Rehabilitation: The project will require the displacement of thousands of people in both India and Nepal. Ensuring adequate resettlement and rehabilitation for these communities has been a major challenge. Concerns over compensation, land acquisition, and livelihood restoration have led to protests and delays.
• Environmental Concerns: The project will have significant environmental impacts, including the submergence of forests and agricultural land, the disruption of river ecosystems, and the potential for landslides and earthquakes. Addressing these concerns and mitigating the adverse impacts of the project has been a major challenge. Environmental impact assessments have been a source of contention, with disagreements over the scope and methodology of the studies.
• Political Instability: Political instability in both India and Nepal has also contributed to the delays. Changes in government and shifts in political priorities have often stalled progress on the project.
• Funding Constraints: The project is estimated to cost billions of dollars. Securing adequate funding from both India and Nepal has been a major challenge. The two countries have explored various financing options, including loans from international financial institutions.

The preparation of a revised DPR in 2019 was seen as a positive step towards resolving these issues and moving the project forward. However, significant challenges remain, and it is uncertain when the project will finally be completed.

Revised Detailed Project Report (DPR): A Step Forward?

The preparation of a revised DPR for the Pancheshwar Multipurpose Dam Project in 2019 was a significant development, signaling a renewed effort to address the outstanding issues and move towards the implementation of the project. The revised DPR is expected to incorporate the latest data and technological advancements, as well as address the concerns raised by stakeholders, including environmental groups and local communities.

The key objectives of the revised DPR are to:

• Update the project design: The revised DPR will update the project design to reflect the latest technological advancements and address the concerns raised by stakeholders.
• Reassess the project costs and benefits: The revised DPR will reassess the project costs and benefits to ensure that the project is economically viable and provides adequate returns to both India and Nepal.
• Address environmental concerns: The revised DPR will address the environmental concerns raised by stakeholders and propose mitigation measures to minimize the adverse impacts of the project.
• Develop a comprehensive resettlement and rehabilitation plan: The revised DPR will develop a comprehensive resettlement and rehabilitation plan for the communities that will be displaced by the project.
• Secure funding for the project: The revised DPR will provide a basis for securing funding for the project from both India and Nepal, as well as from international financial institutions.

The preparation of the revised DPR is a complex and time-consuming process, involving extensive consultations with stakeholders and detailed technical studies. However, it is a crucial step towards the realization of the Pancheshwar Multipurpose Dam Project.

India-Nepal Water Cooperation: Beyond Pancheshwar

While the Pancheshwar Multipurpose Dam Project is the most prominent example of India-Nepal water cooperation, it is not the only one. The two countries have a long history of working together on water resource management, and several other projects are currently under consideration.

Other significant projects between India and Nepal include:

• Kamla and Bagmati Multipurpose Projects: These projects aim to develop the water resources of the Kamla and Bagmati rivers for irrigation, power generation, and flood control.
• Sapta-Kosi High Dam Project and SUN Kosi Storage cum Diversion Scheme: These projects aim to construct a high dam on the Sapta-Kosi River and divert water to the Sun Kosi River for irrigation and power generation.
• Karnali Multipurpose Project: This project aims to develop the water resources of the Karnali River for irrigation, power generation, and navigation.

These projects have the potential to bring significant benefits to both India and Nepal, including increased agricultural production, improved energy security, and enhanced flood control. However, they also face similar challenges to the Pancheshwar Project, including environmental concerns, resettlement issues, and funding constraints.

The Kosi River Agreement, signed in 1954, serves as a historical precedent for India-Nepal water cooperation. This agreement led to the construction of a barrage on the Kosi River for irrigation and flood control purposes. While the Kosi project has provided benefits to both countries, it has also faced challenges related to implementation and benefit sharing, highlighting the complexities of transboundary water resource management. The lessons learned from the Kosi experience can inform the planning and implementation of future water projects between India and Nepal.

Broader Implications: Political, Diplomatic, and Economic

The Pancheshwar Multipurpose Dam Project has broad implications for India-Nepal relations, as well as for regional stability and economic development.

• Political Implications: The project has the potential to strengthen bilateral relations between India and Nepal by fostering cooperation on a major infrastructure project. However, disagreements over the project could also strain relations.
• Diplomatic Implications: The project demonstrates India's commitment to good neighborly relations and regional cooperation. However, it also highlights the challenges of managing transboundary water resources in a fair and equitable manner.
• Economic Implications: The project has the potential to boost energy production and irrigation capacity in both countries, contributing to economic development. However, it also requires significant investment and careful management to ensure that the benefits are shared equitably.
• Legal Implications: The project reinforces the importance of international treaties and agreements in governing transboundary water resources. The Mahakali Treaty provides the legal framework for the project and governs the rights and obligations of India and Nepal.
• Security Implications: Cooperation on water resource management can help to reduce water-related tensions and promote regional stability. However, disputes over water resources can also exacerbate existing conflicts.
• Environmental Implications: The project requires careful environmental impact assessment and mitigation measures to minimize adverse effects on the river ecosystem. Failure to address environmental concerns could lead to protests and delays.

The successful implementation of the Pancheshwar Multipurpose Dam Project would send a positive signal about India-Nepal relations and demonstrate the potential for cooperation on other shared challenges. However, failure to resolve the outstanding issues could undermine bilateral ties and hinder regional development.

Stakeholder Positions: Divergent Interests and Perspectives

The Pancheshwar Multipurpose Dam Project involves a variety of stakeholders, each with their own interests and perspectives. Understanding these different positions is crucial for navigating the complexities of the project and ensuring that it is implemented in a fair and sustainable manner.

• India: India is committed to cooperating with Nepal on water resource development for mutual benefit. India's underlying interests include securing water resources for irrigation and power generation, strengthening ties with Nepal, and promoting regional stability. India has taken actions to participate in joint project planning, provide funding, and engage in diplomatic negotiations.
• Nepal: Nepal is seeking equitable sharing of water resources and benefits from joint projects. Nepal's underlying interests include boosting energy production, enhancing irrigation, and promoting economic development. Nepal has taken actions to participate in joint project planning, seek financial assistance, and engage in diplomatic negotiations.
• Local Communities: Local communities in both India and Nepal are directly affected by the project. Their concerns include resettlement and rehabilitation, environmental impacts, and access to water resources. These communities often have limited power and influence in decision-making processes.
• Environmental Groups: Environmental groups are concerned about the potential environmental impacts of the project, including the submergence of forests and agricultural land, the disruption of river ecosystems, and the potential for landslides and earthquakes. They advocate for careful environmental impact assessment and mitigation measures.
• International Financial Institutions: International financial institutions may provide funding for the project. Their interests include ensuring that the project is economically viable, environmentally sustainable, and socially responsible.

Addressing the concerns of all stakeholders is crucial for the successful implementation of the Pancheshwar Multipurpose Dam Project. This requires transparent communication, meaningful consultation, and a willingness to compromise.

The Geopolitical Context: China's Influence and Border Disputes

The India-Nepal water cooperation, particularly concerning the Pancheshwar project, exists within a broader geopolitical context. China's growing influence in Nepal and ongoing border disputes between India and Nepal add layers of complexity to the bilateral relationship and can indirectly impact the progress of joint projects.

China's increasing economic and political engagement with Nepal has raised concerns in India about its strategic encirclement. China's Belt and Road Initiative (BRI) has led to increased Chinese investment in Nepal's infrastructure development, offering an alternative source of funding and potentially reducing Nepal's dependence on India. This dynamic can influence Nepal's negotiating position in bilateral projects with India, including the Pancheshwar project.

Furthermore, border disputes between India and Nepal, particularly concerning the Kalapani region, have strained bilateral relations. These disputes can create an atmosphere of mistrust and suspicion, making it more difficult to reach consensus on joint projects. Resolving these border disputes is essential for fostering a more conducive environment for cooperation between India and Nepal.

The Future Outlook: A Path Forward

The future of the Pancheshwar Multipurpose Dam Project and India-Nepal water cooperation hinges on the ability of both countries to overcome the challenges and build on the progress made so far. Several key steps are needed to move forward:

• Finalize the Revised DPR: The two countries need to finalize the revised DPR as soon as possible, addressing the outstanding issues and incorporating the concerns of stakeholders.
• Develop a Comprehensive Resettlement and Rehabilitation Plan: A comprehensive resettlement and rehabilitation plan needs to be developed for the communities that will be displaced by the project, ensuring that they are adequately compensated and provided with alternative livelihoods.
• Address Environmental Concerns: Environmental concerns need to be addressed through careful environmental impact assessment and mitigation measures.
• Secure Funding for the Project: Adequate funding needs to be secured for the project from both India and Nepal, as well as from international financial institutions.
• Enhance Transparency and Communication: Transparency and communication need to be enhanced to build trust and confidence among stakeholders.
• Strengthen Bilateral Relations: Efforts need to be made to strengthen bilateral relations between India and Nepal, addressing the underlying issues that have strained ties in the past.

Continued progress on the Pancheshwar Dam Project, further negotiations on water sharing and benefit sharing, and potential for increased cooperation on other water resource projects are all possible scenarios for the future. The key will be to maintain a spirit of cooperation and mutual respect, recognizing that the shared water resources of the Himalayas are a vital asset for both India and Nepal. The project requires a long-term vision and a commitment to sustainable development. Only through sustained efforts and a willingness to compromise can the Pancheshwar Multipurpose Dam Project fulfill its potential to transform the lives of millions of people in India and Nepal. The project's success hinges not only on technical and economic considerations but also on the ability of both countries to address the social, environmental, and political challenges that lie ahead. A collaborative approach, guided by principles of equity and sustainability, is essential for ensuring a brighter future for India-Nepal water cooperation.