DipakG SAFA Talk 141110 (1)

Draft1 of 121210 Re-thinking Water Development Out of the Doldrums: Accounting of what, by whom and how? 1 Dipak Gyawali The mess we are in… Power cuts in the Integrated Nepal Power System (INPS) are chronic. The last two winters (of 2009/10 and 2008/09) have seen power cuts of twelve to sixteen hours a day and these projections are slated to increase for at least the next five years, as per official pronouncements. It has arrested industrial productivity, commerce, and utilities, and has also extended to social life, including school children unable to do their homework. The current political dispensation, besides engaging in a “rhetoric competition” of generating 10 to 25 thousand megawatts, has done precious little to change ground realities. Given that they have been unsuccessful in their main task of bringing in a new constitution and consolidating peace, it is hardly surprising that ending load-shedding has not been on their radar at all, even less the idea of generating cheap and reliable electricity for Nepali industry and commerce. It is not that there is no money around for investment: those supplying inverters and solar panels as well as small generators are doing a roaring business. The import of petroleum products have doubled in the last three years, primarily for gener ators and vehicles which could have been shifted to the Safa (electric) mode for a far less cost. The question is: why are consumers ready to pay such high prices but are not willing to invest in hydro generation or trust their money with the national utility (the electricity from off-grid sources is double or triple the cost, less reliable and not as multipurpose than what should have been provided by a well-functioning and disciplined grid, both directly in terms of unplanned for additional investments and also indirectly in terms of, say, only about 40% efficiency, meaning higher electricity bill to pay for half the energy dissipated in charging batteries)? The inability of the monopoly state parastatal Nepal Electricity Authority (NEA) – and by default their political masters – to bring forth convincing plans and programs has contributed to consumer distrust. There is, therefore, a need to examine afresh the underlying causes, the views of contending “stakeholders”, as well as to identify po ints of leverage and constructive engagement between them. A useful contrast would be the case of another resource develope d in Nepal, tourism which has see n more successful development through the private sector, with the government acting only as a facilitator. A contrast between the agencies active in the two sectors as well as their histories could provide points of insight for further policy formulation. This re-thinking asks us to get away, and fast, from the stale paradigms of the past, seeing water resources development only in terms of hydropower, failing to examine the upstream-downstream linkages of electricity in the national economy, being blind to the pitfalls of exporting electricity to a monopsony market that insists on bringing price down as close as possible to cost price, and in the modality of state-led “bureaucratic socialist” development that is allergic to the entry of the private sector or allowing any voice to the consumer. In short, it calls for a new accounting paradigm for Nepal’s hydroelectricity if, as the theme of this session has it, a new “ strategy for converting the Himalayan water resources into an energy power house of the region with related economic benefits for Nepal ” is to be formulated. The fact that the much-hyped Mahakali Treaty has remained dead all these 14 years despite the main architects themselves being in power currently should be all the more reason to move away from a hydro-centric paradigm to a new one 1 Talk delivered to the South Asian Federation of Accountants (SAFA) Summit on “Sustainable Development in SAARC Region”, Kathmandu, 11-12 th December 2010. Gyawali is Pragya (Academician), Nepal Academy of Science and Technology, Research Director, Nepal Water Conservation Foundation, UNESCO/UNU-IA S Visiting Professor of Water and Cultural Diversity, and former Minister of Water Resources. 1

DipakG SAFA Talk 141110 (1)

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