The Nepal Digest - Jan 16, 1995 (2 Magh 2051 BkSm)

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The Nepal Digest Monday 16 Jan 95: Magh 2 2051 BkSm Volume 35 Issue 9

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********************************************************************** Date: Fri, 13 Jan 1995 19:04:59 -0600 (CST) From: RKP6723@UTARLG.UTA.EDU Subject: Shakti (Energy) To: Nepal@cs.niu.edu

                            SHAKTI (ENREGY)
                            ---------------

                     All these materials around me
                     My heart is still empty
                     I think about Forbidden One
                     She is so innocent and pure
                     I close my eyes and see
                     The light bright yet peaceful

                     I don't even move an inch
                     I look at my face in the mirror
                     I know My SHAKTI (ENERGY)
                     Is no longer with me

                     I hear thunderstorm
                     I do not dance with it
                     I know my NATARAJ (LORD OF DANCE)
                     Is no longer with me

                     Hey Forbidden Beauty
                     Will you sit beside me
                     I will dance and move for you

By Robin "Swayumbhu" Pandey Arlington, TX

**************************************************************** From: psubedi@site.gmu.edu (Purushottam Subedi (CS 555)) Subject: NEPAL TODAY - A publication of NHRC-USA To: nepal@cs.niu.edu Date: Sun, 15 Jan 1995 00:30:51 -0500 (EST)

                               NEPAL TODAY
           PUBLICATION OF THE NEPAL HUMAN RIGHTS COMMITTEE-USA
                          Washington, DC 20009
                             (703) 683-7501
                               Summar 1994
 TODAY EDITORIAL BOARD:
                        Roshan Pokharel
                        Kabindra Sitoula
                        Purushottam Subedi <psubedi@osf1.gmu.edu> NHRC-USA EXECUTIVE COMMITTEE: President: Dr. Balram Aryal Vice President: Dr. S.D. Shah Secretary: Kabindra Sitoula Treasurer: Shanker Shrestha Members: Suresh Baral, Puru Ghimire, Bhaskar Giri,
                        Ganesh Lal Kayastha, Hom Nath Subedi,
                        Deepa K.C., Anup Pahari, Brinda Sitoula
                        Gopal Siwakoti, Bir Thapa, Shail Upadhyaya,
                        Raja Upadhayaya, Gopi Upreti Honorary Members: Kathleen Johnson, Clifford Philipps, Kimberly Smith
                        Linda Shrestha, Mark Zuckerman, Karmit Zysman

(Views expressed in this newsletters are strictly personal)

Latest copy of Nepal Today and other information about NHRC-USA and its activities can be found in THE NEPALI LITERATURE HOME PAGE on WWW at the following http address:
                http://www.site.gmu.edu/~psubedi

DEAR MEMBERS AND WELL-WISHERS,
                                          WE WOULD LIKE TO EXPRESS OUR APOLOGY FOR NOT BEING ABLE TO POST NEPAL TODAY ON TIME DUE TO SOME TECHNICAL DIFFICULTY.

EDITORIAL
        MID-TERM ELECTION IN NEPAL AND ARUN III CONTROVERSY Mid-term election in Nepal
                                    
  The people of Nepal will go for the mid-term elections on November 13, 1994 which is about year and a half before the five- year term of the dissolved Parliament. Last general elections were held in May 1993. Serious questions have been raised in Nepal and around the world regarding the way the Parliament has been dissolved and the unpopular method that the King chose to form a care-taker government to conduct elections. The questions is being asked: Is Nepal's democracy in danger?

  The violent pro-democracy struggle of 1990 abolished the partyless Panchayat dictatorship and reduced the absolute power of the king. The people of Nepal hoped that the new political process will begin a new era of democratization and economic development, the Nepali Congress government established with people's mandate will take strong measures against corruption and nepotism and implement basic reforms in education, health care, and other social programs. On the contrary, corruption has increased, education and social sectors have suffered, economic situation has worsened and human rights abuse has not stopped. However, our view is that the present leadership rather than 'democracy' is responsible for this unhappy situation.

  The main problem is that our democratic leaders continue to work with outdated vision and attitude. In fact, during 30 years of struggle for democracy, the current old and family-style leadership never did enough homework to run the state affairs, and they are only fighting among themselves for their self-interests after the installation of democracy. Neither the new Constitution nor the party workers and ordinary citizens are responsible for the inter- leadership fight. The infighting within the Nepali Congress reached an anti-climax when the democrats and like-minded youths of the ruling party voted out their own leader, Mr. Koirala, in the Parliament in July.

  But, instead of resigning from the government and giving his own party and the opposition an opportunity to form a new government, Mr. Koirala chose to surrender the constitutional powers to the king to dissolve the "sovereign" Parliament whichmade it possible for him to remain as the care-taker Prime Minister to conduct mid- term elections. The anger in the ruling party, the oppositions and the people have reached to such level that they are calling for protests and demonstrations around the country and demanding for the all-party government to ensure free and fair elections. The worst victims of PM Koirala's unpopular step are the ruling party itself and also the king who may use Mr. Koirala as a conduit to regain absolute power against the will of the people and political parties in the Parliament.

  It is a sad moment for Nepal and its people that they may have to undergo further suffering because of the personal infighting of the ruling party leaders who seem to have lost touch with peoples. What Nepal needs now is a new generation leadership with visions for democratic Nepal, and who can work with all democratic forces to meet the needs of the Nepali people and prepare the country to enter twenty-first century as an equal partner with other dynamic countries of the world.

  For this, Nepal Human Rights Committee-USA would like to send its best wishes to all the leaders to resolve the present crisis through constitutional means and ensure free and fair elections. The forthcoming election, if not canceled due to the Supreme Court verdict on the controversy in near future, will provide an opportunity to finally get rid of the country out of corrupt and feudal elements which, hopefully, will make it possible for a trusted and democratic leadership to emerge for the betterment of Nepali people and their democratic future.

Arun III Controversy

  "I am a bit disappointed with the World Bank because sometimes they say one thing and sometimes another. They say they prefer democracy to be maintained in the countries receiving their aid, and yet they impose such conditions which put democracies like ours in trouble. I feel they are themselves not sure of what they want." Prime Minister Girija Prasad Koirala in an interview to SUNDAY, Calcutta, as published in WEEKEND, May 28, 1993, Kathmandu.

Koirala's above remarks, the Koirala Government has pushed hard for the Arun III project which will use huge amount of foreign aid money. However, the Arun III project has generated a great deal of controversy and the future of the project looks uncertain.

 Some young activists calling themselves the Arun Concerned Group had brought a civil suit against the Nepali Government to force it to disclose information concerning the Arun III Project and clarify issues that the Group considers as vital for the long-term interest of the country. An article on the Arun controversy appears in this issue of Nepal Today which, in our view, makes a fair assessment of the concerns raised by the Arun Group.

 From our point of view, the Arun controversy presents a test case for the Government to extend the concept of democracy from the realm of politics to economics. We have fought for democracy to bring transparency and accountability to political decision-making; debates such as for Arun will help us extend the concept of transparency and accountability to economic spheres.

 We are not for or against the Arun Project per se. What we desire is that the issue be debated in press and parliament in order to reach a national consensus. The small group of bureaucrats and cabinet officials making decisions on the project will be long gone before the mistakes are discovered and then the Nepalese public will be left holding the bag. It should be noted that some US$500 million of the project costs will be financed by multilateral loans. There is no forgiveness for such loans and multilateral creditors never take responsibility if the investment fails.

 Most pertinent issues highlighted in this issue of Nepal Today by Gopal Siwakoti and Vijaya Shah provide the detailed background of the project, and the efficiency of public sector investment in the energy sector respectively. Our view is that the Government must find ways to achieve at least a comparable level of efficiency as in the neighboring countries before it takes up another rupee worth of investment in this sector.

CONTROVERSIAL ARUN III PROJECT: MAJOR ISSUES AND CONCERNS

Compiled by Gopal Siwakoti Executive Director, INHURED International

      (The following information are based on issues and concerns that have been raised by the Arun Concerned Group, the Alliance for Energy and other INGOs in Nepal and at the World Bank.)

      The World Bank has postponed the vote on the controversial Arun III hydroelectric project in Nepal up to October 1994. Reportedly this is because the Japanese Government is reluctant to be listed as a donor until it is fully satisfied with the project, and has completed a study mission to Nepal recently.
     Other reasons may be that Nepal is facing a political crisis due to the resignation of Prime Minister and dissolution of the Parliament; the mid-term elections are scheduled for November 13, 1994. There is widespread concern both inside and outside the World Bank that the project should be fully debated and approved by the Parliament before it gets a go ahead.
     Recently, NGOs from Nepal and others have raised a series of issues and concerns at the World Bank. These include the denial of basic project information to the public, violations of the Bank's operational standards and policies, and lack of study on alternatives to Arun III.
     Nepali NGOs say that since the release of information process has just began after the Supreme Court verdict of May 8, 1994, there can be several issues to be taken to the Court in future for review and consideration according to the Constitution and laws of Nepal.
     Due to the effect of campaign on issues and concerns on Arun III at national and international levels, this is the first time that the World Bank invited representatives of the Arun Concerned Group, the Alliance for Energy and other NGOs/INGOs to express their concerns at a one-day consultation on June 28, 1994 pertaining to long-term repercussions of the proposed project.
(Members of the Nepali non-governmental delegation included: Gopi Upreti, Ganesh Ghimire, Gopal Siwakoti and Arjun Karki from the Arun Concerned Group and Bikash Panday, Dr. Pitambar Chhetri, Rajendra Dahal, Ravi Pradhan from the Allinace for Energy, including Deepak Gyawali as independent), and Lori Udall of the International Rivers Network in Washington, DC has been active as the key facilitator for local and international NGOs.

FUNDAMENTAL ISSUES

1. Adequate Analysis of Alternatives

     The very high unit cost of construction and the corresponding high tariff that consumers of the energy from Arun III will have to pay remain a serious concern. Lack of study of the alternatives during the eight years of preparation of this project continues to be a major criticism of this project. The Least Cost Expansion Generation Plan exercise that has been used to justify the project to date has been admitted by Bank Management not to show conclusively the superiority of the Plan A option (the Arun project as currently designed) over Plan B (which proposes to have the project come on line in the year 2009 after the construction of a number of small and medium hydropower schemes) to supply the national grid. The cost of the plan B projects compared with the Plan A option are extremely preliminary. The study 'Arun III - Cheaper Energy for Nepal' put to Bank management in April 1994 indicates that hydropower schemes in the under 100MW range that have been studied in greater detail in the last year have all come up with energy costs lower than Arun III. There has been no response to this document from the Bank.
     In the interests of generating energy for Nepal at least cost, it is imperative that the study of the alternatives be taken to atleast the feasibility level to allow a proper comparison with the Arun project before the project is taken to the board for a vote. Unless this is done the Bank will not have fulfilled its policy requirement to compute the Least Cost analysis for additional power generation for Nepal.

2. Public Participation and Access to Information

A. Public Participation and Consultation:
     Public Participation in the project has not been adequate. The project is being portrayed by the government of Nepal as having been chosen through a transparent and open democratic process. However, only in the last six months (with project preparation almost at completion) has there been any serious discussion in Parliament or with the public with the benefit of accurate information. Prior to that, Arun III was consistently presented to the public as a fait accompli. The discussions that have taken place have been forced by concerned groups rather than at the instigation of the Government of Nepal or the World Bank. For example NGOs organized a public hearing in February 1993 which was boycotted by the Ministries of Water Resources and Finance and by the National Planning Association, which meant there was no opportunity to challenge the government about project.
     The alternatives to the project (along the lines of Plan B) that are available to Nepal have never been presented to the people or the Parliament. The Nepali government claims to have held 23 public meetings, 11 of which were in the Arun Valley. While it is true that there was one public hearing in Tumlingtar, many of the other meeting being classified as public hearings were meetings strictly to inform people about compensation rates for their land. NGOs who tried to raise issues in the meetings about the adverse environmental and social impacts of the project were prevented from doing so. The Government has also misinformed people in the Arun Valley about the project, leading them to believe they will receive jobs and electricity. In reality there has been no concrete commitment to supply electricity to the people in the Arun Valley and only a small number of jobs will be created for local people, because outside workers will be brought in.
     This lack of consultation represents a violation of the Bank's Operational Directive on Environmental Assessment, which requires that the government take into account the views of affected groups and NGOs in the preparation of project design and implementation
(OD 4.01, para 19) and to publicly release the draft environmental assessment.
      B. Failure to Release Information
     Despite repeated requests over several years, only in the last few months have any project documents been made available to the Nepali public. Their release only came about following a court case filed by NGOs which led to a Supreme Court decision demanding their disclosure. Despite the ruling, which demanded the release of all documents related to the Arun III project, many of the key documents are still being withheld bythe Nepalese Government, precluding any meaningful debate.
     The library which was established by the Nepal Electricity Authority after the law suit was filed in the Supreme Court does not contain many key documents such as the Memorandum of Understanding between the Government of Nepal and the World Bank or the draft project appraisal documents. In a project of this size and cost which will affect the whole nation of Nepal, the public should be able to access information about existing agreements between the Government and the World Bank. The full environmental impact assessment has not been made available in Nepali, which is a requirement of Bank policy.

C. Failure to Release Bank Documents
     Both the Bank's Environmental Assessment Policy (OD 4.01) and the Information Policy (BP 17.50) require the timely release of information about the project, especially before public consultations take place. This has been violated consistently throughout all project planning and design. The Bank's new information policy requires the release of the Project Information Document and the release of all factual technical information about the project. While the project information document was readily available in Washington, it has not been available in Nepal. Requests for factual technical information on the project, including studies on alternatives to the project were denied until June 10th, when the Bank released a study on alternatives by Argonne National Laboratories. NGOs have not had sufficient time to analyze this document and many of the assumptions used in the document are not explained.
     Requests for the green-cover staff appraisal report, and other technical information such as hydrological studies have also been withheld. The staff appraisal report is the basic technical document of a project which contains the project justification and rationale for the Bank's involvement in the project. It is critical that this document be released, before it becomes final. While we realize there may be a small portion of confidential information within, we believe these sections should be excised, and the rest of the document should be released. The Project Information Document has never been updated and it contains so little information that it is useless for NGOs who are questioning the basic assumptions and objectives of the project.

3. Environmental And Social Issues

A. The Regional Action Plan Must Be Completed
     The King Mahendra Trust follow-up study to the MBEIS report, which is essential groundwork for the Regional Action Plan, will not be completed for at least six months. The World Bank Board date and Road construction must be postponed until all portions of the Regional Action Plan are completed and are in place. Previous Bank experience in which project construction was started before to environmental studies were completed and implemented have failed as in the case of Narmada. B. A Realistic Implementation Program and Timetable for the Regional Action Plan and Road Construction must be Established
     Road construction is currently planned at a rapid rate, which will adversely impact on the 450,000 indigenous people living in the valley, through an influx of up to 10,000 construction workers, which will put pressure on precious food and water resources. There are no mitigation measures in place to ensure that these people are safeguarded. The people of the Arun valley fit the Bank's definition of "indigenous people" in its operational directive OD 4.20. OD 4.20 states that "successful planning for indigenous peoples frequently requires long lead times, as well as arrangements for extended follow-up". For the Regional Action Plan to be effective, it must be started well in advance of the project. The rapid speed of road construction will further undermine the Regional Action Plan's ability to cushion this sensitive region from the long-term and indirect impacts on the valley. The construction schedule for the road must be extended to minimize disruption to local communities and the environment.
     Moreover, we question whether the Nepal Electric Authority which has its primary interest in promoting the project has the capability or the will to properly implement the Regional Action Plan.

C. Long Term Cumulative Environmental Impacts of Arun III and Subsequent Projects
     Arun III is only first phase in a plan to build three dams in the Arun Valley. Despite this, Environmental studies have only covered the adverse impacts of Arun III. Before the project is approved there should be a comprehensive study of the long term cumulative impacts of dam building and road construction in the entire Arun Valley.

D. The Acquisition, Compensation and Rehabilitation Program (ACRP) Should be Revised to Ensure That Families Receive Equitable Compensation and That the Program is in Compliance With Bank Policy.
     Families whose land will be acquisitioned for the project are being compensated at a rate that is well below the market rate for their land. In this respect the project is failing to comply with the Banks Operational Directive on Involuntary Resettlement (OD 4.30, para 2). In addition, Bank policy advocates "land for land" compensation, which is particularly important in the Arun valley where people are not linked to the cash economy. Serious problems were highlighted in project documents after the earlier round of cash compensation measures implemented for the original ridge route alignment. Despite this, no land has been identified to offer the option of land for land compensation.

4. Agreements with Neighboring Countries

A. Power Sale Agreement Must be Reached with India
     Since phase II of the Arun III project and future power development in the valley have been predicated on the sale ofpower to India, the project must not go ahead until an agreement has been reached. India currently buys power from the Chukha dam in Bhutan at prices significantly below cost price. The high cost of Arun's power means it is highly unlikely that any power sale deal with India will make economic sense.

B. The Riparian Issue Must be Resolved with China.
     In the Nepali parliament recently, the Water Resources Minister announced that China held "no objection" to Nepal's plans to build Arun III. However, this does not constitute a promise to guarantee Arun's water supply for the lifetime of the project. Even now, a proposal is pending in China for the Changsuo Basin irrigation project on the Arun (Phung Chu) river. In addition, there are a large number of glacial lakes in Tibet which could produce Glacial Lake Outburst Floods to which Nepal has no access. Going ahead with Arun without a firm commitment from China markedly increases the risk of the project.

5. Conclusion

     The Bank's failure to ensure that its policies on Environmental Assessment and Information Disclosure are being followed is undermining democratic processes in Nepal. We believe the unresolved issues surrounding this project, and the lack of public consultation and access to information makes it highly unsuitable for Board consideration at this time. We also question whether a project of this magnitude and cost is a reasonable use of IDA funds. If the Bank is to take seriously its publicly stated commitment to sustainable development, then there should be a full investigation of alternatives which are more suitable for Nepal's long term energy needs.
     If the concerns outlined in this letter are not addressed adequately by Bank management, we may be forced to submit a claim to the Bank's Inspection Panel.

OTHER CONCERNS

     * With a current price tag of $764 million, the Arun III
          hydropower scheme will cost as much as the entire
          national budget for one year. This is a major financial
          commitment way beyond Nepal's limited resources. Although much of the loan for the Arun project is being made available on concessional terms, it is still a huge burden for a country with such a limited budget. One third of the country's national revenue already disappears into loan repayments. Since only 9% of the population has access to electricity, the whole country will bear the debt burden for the benefits enjoyed by a few. Large, centralized power schemes like Arun will not help the remaining 90% gain access to electricity.
     Even to those who will benefit from Arun, the cost will be very high. Despite concessional terms on the loans from the World Bank and Asian Development Bank to His Majesty's Government of Nepal (HMG/N), the Nepal Electricity Authority will be required to make payments to HMG/N forthe loan at an interest rate of 10.25%. This cost will ultimately be borne by the consumer, who will pay very high electricity tariffs.

* The scheme will cost $3,800 per installed KW. Private
     companies in Nepal can and are building small and medium hydro
     schemes (up to 60MW) at half that rate.

     In the light of the high cost of power production, it is surprising that Arun came out as the best option for Nepal to pursue in the Least Cost Generation Expansion Plan (LCGEP). The LCGEP did not consider all the possible options for hydropower development in Nepal, and largely ignored the small/medium scale sector.
     Local private sector initiatives are consistently building schemes for less than $2,000 per kW installed in the small (1-15MW) and medium (15-100MW) hydro ranges, and $1,500 per kW in the mini/micro-hydro range. The 20 to 25MW of annual incremental power needs of the national grid can easily be met with a basket of 1- 100MW schemes coming on line one after the other.

* Investing in Arun means putting all Nepal's hydropower eggs in
     one basket. This makes it a high-risk option and provides no
     answer to the current load shedding problem.

Investing in more, smaller schemes would spread the risks of investment and energy provision. If anything goes wrong with Arun, the country will have no alternatives to fall back on. The start date for the construction of Arun has already been shifted and is likely to be further delayed. Shorter-gestation projects will relieve load shedding much sooner.

* Political stability in the country will be threatened if
     tariff has to be raised to the level being insisted on by the
     World Bank for this project to go ahead.

Since the newly elected democratic government came to power, electricity tariff was raised 61% in November 1991 and again 40% in February 1992. This has been followed with an increase of 38% in early 1994. This increase of over 200% in the electricity tariff has led to political protests in all the major cities in Nepal and petitions from the business community for tariff reductions.
     The high tariff is seen to be a direct consequence of the high cost of power generation from the Arun scheme and is doubly unpopular because together with the tariff increase people can expect more load-shedding for the foreseeable future. The further 50% tariff increase that is expected to be needed to pay for the energy produced from Arun will mean that Nepal will have the highest energy prices in South Asia and threatens to destabilize the country politically.

                                               * There has not
     been enough preparation for detailed planning of the
     mitigation measures needed to counter the serious adverse
     environmental impacts of the access road to the Arun Project. The Arun Valley is a remote area of vast biological diversity and ecological fragility. The valley is inhabited by 450,000 people comprising 10 ethnic groups. These people will be extremely vulnerable during road and project construction. Over 1000 families will be affected by the loss of their homes, lands and livelihoods. Pre-project mitigation activities to prepare the local people for the effects of the construction of the road has not even begun and there are only some months left before the proposed beginning of construction. The Nepal Electricity Authority which is in charge of co-ordinating the mitigation activities and has full responsibility over environmental management during construction and after commissioning has no capability or experience in this area. There are serious doubts that NEA can execute these functions effectively in spite of the "unprecedented level of planning of mitigation for this project".

* Public participation both at a local level in the affected
     district and at a national level has been insufficient in the
     development of the Arun project.

Serious questions that the people of Sankhuwa Sawa (the district where the project is to be sited) have regarding the alignment of the road, and benefits to the local population of jobs, training and access to electricity have not been adequately answered. The one Public Hearing that was held in the district was not publicly announced. When satisfactory answers to their questions could not be provided during the Hearing, local leaders asked the organizers, more than once, to terminate the meeting and go back to Kathmandu. No documents regarding the project (including the Environmental Impact Assessment in the local language) were available to local people before the Hearing.
     The project affects all the people of Nepal in different ways
-as consumers of the produced electricity or as those carrying the burden of the loan. Government officials boycotted a Public Hearing in Kathmandu on the project organized by NGOs on February 11th, 1993 and have not organized one of their own. A Public Hearing needs to be held in Kathmandu to discuss the risks of the project to the national economy and the alternatives to Arun that are available to Nepal.

*The engineering and management capability to build a large project like Arun does not exist in the country, which means that the entire scheme will be built by international contractors.
     Previous experience with large hydro projects in Nepal managed in this way (the Marsyangdi and Kulekhani schemes) demonstrates that such dependence on external technologies and expertise does nothing to help local capability grow and mature - in fact, the reverse is often the reality. While there were token provisions made for local capability building in the two projects named above, they never developed into genuine capability building. It is hard to see how Arun will enhance the hydropower capability of Nepal.
     The shortcomings of this approach are already clear.Japanese experts had to be brought in to assess the damage on the Kulekhani pen stock (washed away in the floods of 1993) and four years after the completion of the plant, German technicians are still needed long term to run the Marsyangdi power plant. The Japanese experts have pointed out the lack of routine maintenance on the Kulekhani project and almost no record keeping of the maintenance that was done.
     Local capability in hydropower has been growing and maturing
     rapidly over the last 10 years, particularly in the private
     sector. Local companies are now taking on 50-60MW schemes,
     which are plenty big enough to meet Nepal's relatively modest
     energy needs. However, local initiatives require support
     rather than competition from schemes like Arun.
     
* Given Nepal's current development status and priorities, Arun
     could do more to damage than enhance the country's overall
     development prospects.

Nepal is one of the 10 poorest countries in the world. Its most urgent needs are for the basic services of clean water, sanitation, health and education. While electricity is high on the list of priorities for Nepal's rural communities (which represent 90% of the population), they stand little chance of gaining access to Grid electricity even in the long term. Stand-alone mini- and micro- hydro schemes offer the only realistic option for many of these communities ever to benefit from electricity.
     Given the Bank's emphasis on 'poverty alleviation' strategies for development and the recent concerns raised in the Wapenhans Report about the 'sustainable development impact' of its projects, it is difficult to see how it justifies the construction of Arun, which will benefit so few, generate no income for the country and increase its burden of debt.

ALTERNATIVE APPROACH

     The alternative approach to hydropower development focuses on a sectoral approach to hydropower generation that recognizes the complementarity of private and public sector elements. It also acknowledges the interdependence between, and complementarity of, the large, medium/small and mini/micro sectors in the industry. It is a process-oriented rather than product-oriented approach, which places equal importance on the establishment of greater hydropower capability as on increased power capacity per se.
     The aim of this approach is to plant Nepal firmly on the path to self-sufficiency in hydropower generation, and to reduce the country's dependence on foreign aid and technical assistance in the long term.

     The essential characteristics of this approach are:
* Focusing on schemes that use and enhance the country's
     existing capability
* Investing in building up local capability, in both the public
     and private sectors
* Switching to a decentralized model of power production, which
     ensures a sharing of risks among a number of schemes, and
     promotes local management and control of projects
* Removing the barriers to private sector investment, and
     creating an environment which is conducive to growth,
     maturation and expansion of private industry
* Adopting an evolutionary approach to hydropower development,
     whereby the industry moves ahead in manageable steps, taking
     on larger and more ambitious projects as its capability grows
     and matures.

     This approach is realistic. Nepal has the technical capability to take it on, though it will still require support for some years before it is totally self-reliant. Financial and institutional arrangements, however, require serious consideration, as the current mechanisms cannot provide the necessary support.
     Based on the large number of concerns regarding the Arun project, we would urge your agency to consider utilizing your funds for supporting small and medium hydropower schemes of less than 100MW capacity which are more economically, environmentally and socially sound for Nepal's current situation.

NEED OF PARLIAMENTARY DEBATE AND APPROVAL

     Another disturbing issue regarding Arun III has been the lack of fruitful debate in the Parliament and its approval. The government has never presented any documents and information, other than policy statements and general information about the construction of the project, in the Parliament despite repeated efforts of Members of Parliament for the disclosure of project documents for debate and approval. A group of Members of Parliament even issued a public statement on January 12, 1994 with other public figures and demanded for the release of project documents and review of the whole project by the Parliament. Around the same time, the largest Opposition Party in the Parliament Communist Party of Nepal (UML) issued an statement and said that it will neither approve project nor assume any responsibility in future if the matter is not debated in the Parliament with the disclosure of project information.
     There are several other issues involved relating to the design, funding and implementation of the project that need approval of the Parliament, e.g. approval of agreement with China on riparian issue (since 86% of the water flows from China); status of agreement with India on the sale of energy, if it exists; approval of 10% investment by Nepal of the $764 million project and other questions relating to the cost, conditionalities of donors, and environmental and social impacts. So far the Parliament has not been provided this opportunity, and significant pressure on the government for the disclosure of project documents and a fruitful debate was expected in the present session of the Parliament, including independent reports by the Opposition Party and the People'sCommission on Arun III, which is not the case anymore due to recent political developments in the country.
     The recent dissolution of the Parliament, and the calling of mid-term elections on November 13, 1994 have created further uncertainty of Arun III project if it is not critically reviewed by the donors to win the consensus of the fragile political parties and the confidence of the Nepali people. The final decision of the loans for the project will be viewed as undermining the democratic internal process in Nepal as well as seizing of "opportunity" during political turmoil. The status of the project will further degrade if the existing members of the Cabinet and the ruling party get defeated in the November elections leading to new opening of debate on Arun III.
     In conclusion, the information release process has just began and it needs more time for their availability in local language for public consultation with the local people as well as national debate in the Parliament. Since a thorough discussion of the project in the Parliament and its approval is highly significant for the better future of Arun III as well as a secure investment of donors, it is important that this opportunity is given to the forthcoming new Parliament to be elected on November 13, 1994 as the existing Parliament has been dissolved on July 10, 1994 due to political infighting in the ruling party. I would like to assure you that the postponement of the Bank date will be viewed by the people, political parties and NGOs in Nepal as the sympathy and support of the Bank and other donors in stabilizing the hard-won democracy in Nepal.

WHAT NEEDS TO BE DONE!

     It will be essential for the borrower country, the people and the donors to postpone the July 26th voting of the project by the Bank, and review the whole project with careful attention during the period of electoral preparation for November elections, particularly: 1. investigate violations of the Bank's Information Policy and operational procedures by the Bank Management; 2. study of issues and concerns raised by NGOs during the June 28th consultation meeting held at the Bank; 3. review the compliance of the Bank's policy, procedures, guidelines and standards relating to the project as the obligations of a borrower country, and access to basic project information by the affected people and the citizens of Nepal; 4. ensure the debate of the project in the next elected Parliament
(November 1994) and its approval; 5. respect the decisions of the Supreme Court of Nepal on access to information on Arun III as well as the internal democratic process;
 6. take into account the detailed information to be provided by NGOs in Nepal on various issues relating to Arun III, particularly environmental impact assessments and mitigation measures as well as alternatives to Arun III; and 7. satisfy with other unresolved issues relating to the life and sustainability of the project, e.g. riparian issue with China, glacier outburst, alternatives to energy development, adverse impacts in social sectors.
     For more information on Arun III, contact: Arun Concerned Group, c/o INHURED International, P.O. Box 2125, Kathmandu, Nepal. Tel: (977-1) 419610 * Fax: (977-1) 412538. In United States: Lori Udall, Washington Director, International Rivers Network, 1025 Vermont Ave., NW #300, Washington, DC 20005. Tel: (202) 879-4280 * Fax: (202) 879-3186 * E-Mail: irndc@igc.apc.org
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SUPREME COURT VERDICT ON ARUN III AND RIGHT TO INFORMATION
                                    
     Denial of basic information by the Nepali Government, particularly Nepal Electricity Authority (NEA), about the Arun III Hydroelectric Project has been one of the serious matter of concerns for the people and NGOs in Nepal. A formal request was made by the Kathmandu-based International Institute for Human Rights, Environment and Development (INHURED International), Secretariat of the Arun Concerned Group, on December 10, 1993 requesting for all information about the project, and copies of the request letter was also sent to ministries of finance, and water resources as well as to the donors.
     A public interest litigation was filed by two human rights activists, Gopal Siwakoti and Dr. Rajesh Gautam, in the Supreme Court on December 31, 1993 under articles 16 (right to information) and 88.2 (right to public interest litigation) of the Constitution of the Kingdom of Nepal. By exercising its extra-ordinary jurisdiction, the Supreme Court delivered a verdict on May 8, 1994 in favor of the petitioners and ordered the Nepali Government to provide all documents and information about the project. The Court decision went even further and stated that denial of information, fully or partially on any grounds that there may be, can be challenged in the Court within 7 days from the date of such denial. The Court did not believe that the government has fulfilled its constitutional and legal obligations by referring to some public meetings and the setting up of "library" after the case was filed in the Court.
     The Supreme Court Justices Hon. Hara Govinda Singh Pradhan and Hon. Keshab Prasad Upadhyay delivering their landmark judgment on the right to information, have also established the following procedures and guidelines for the demand and release of information until appropriate laws are made:

1. The applicant should first demand the list of documents from the defendants. 2. If the defendants provide the list within seven days, the applicant should demand an inspection of the concerned documents. 3. If the demand is made according to clauses 2 of these procedures, the defendants should set the time, date, and place and provide information to the applicant within three days. 4. If the applicant wants to make a note or copy of the document after inspection, he or she should request the specified authority for the same. 5. In the absence of laws for providing copies, the copies should be certified by accepting the expenses for copies as fees. 6. If the defendants have to deny the right to provide the list, full or part, or inspection or for providing copies, they should indicate the reason and inform the applicant within three days. 7. In conditions under clause 1 and 6, where the applicant is denied the right to information, the applicant, if not satisfied with reasons for denial, can file a petition in the Supreme Court within seven days after the receipt of the information of denial. 8. The procedure for the action described above shall be made according to the rules of the Supreme court.
     This Supreme Court precedent has established the right to information for all citizens on Nepal according to the Constitution. It has also outlined the possible framework for a future law on the right to information.

ARUN III AND NATIONAL INTEREST
     Ms. Vijaya Shah I. Introduction

     Those of us having the experience of living in Kathmandu need no convincing about the acute shortage of electricity in the Valley. As in the case of municipal water supply, the electric power has never been available to Kathmandu residents on a 24-hour basis. Even during those restricted hours when electricity is available (presently, two hours each in the morning and evening), the incidents of brown outs, black outs, and periods of unusual surges in the flow of current (requiring the use of surge suppresser for sensitive appliances) may be almost a daily occurrence. Inadequate and unreliable supply of electricity in the Valley, and also in the rest of Nepal, not only add to the difficulties of daily living but also hamper commercial and industrial activities and discourage the introduction of improved technology based on the use of electricity. This limits the growth of productivity and makes it difficult to improve living standards, locally as well as nationally.
     It should be good news then that the Government has finally decided to do something to relieve the shortage of electricity in Kathmandu and probably sell it at a cheaper to the consumers than the current price which is probably the highest in the world (see below). The case in point is the Arun III hydroelectricity project which the Government intends to implement in two phases each having 201 MW capacity. ( Nepal's present generating capacity is about 300 MW). The estimatedcost of the first phase of the project is 764 million US dollars and it is expected to be completed by the year 2000; the second phase of the project may be completed five or seven years later but that will depend on the success of the first phase of the project. However, the current news is that all is not going well with the project, still awaiting implementation. A citizen council called the "Arun Concerned Group (ACG)" has petitioned Nepal's Supreme Court to order the Government not to proceed with the project unless certain conditions are met. Under Article 15 of the new Constitution containing citizen rights to public information
(similar to the American Freedom of Information Act), the ACG has asked the Court to require the Government to make public all information pertaining to the Arun III project. Further, ACG is using the provision of Article 86 of the Constitution dealing with
'public interest litigation' to raise issue with the technical and financial viability of the project. In ACG's view, the Government must seek a national consensus before making a final decision on the Arun project. Reportedly, the Supreme Court has sided with ACG and has ordered the Government to make available to them all relevant information on the Arun Project. The Government is contesting that decision.

II.Issues Raised by the Arun Concerned Group

In a pamphlet issued in February 1994 entitled "Arun III--An Introduction and Issues of Concern", ACG has made several assertions which raise serious doubts whether the project, as presently conceived, is really in the best interest of Nepal. The main points made in the pamphlet are the following:
     1.The project is too large relative to the size of the
     economy. Estimated cost of just the first phase of the
     project--some 764 million US dollars--is almost one quarter of
     Nepal's current GDP. Concentration of the country's meager
     resources on just one project is contrary to the current
     development theme which emphasizes diversification. ACG
     contends that, instead of spending such a huge amount of money
     on a single project, preference should have been given to
     small and medium size projects chosen from various sites in
     the country. This would have reduced risk (not putting all
     your eggs in one basket) and benefited a wider segment of the
     population.
     2. Government's preference for large projects, in ACG's view,
     is related to the expectation of huge kickbacks from
     contractors which may not be possible, or as big, if the
     project is relatively small. Also, ACG argues that the large
     size and complex nature of the Arun project will require the
     use of sophisticated technology and skilled manpower which
     will need to be imported rather than supplied locally . More
     local resources would have been used if several smallprojects
     had been implemented instead.
     3. ACG is concerned about the impact of the project on the
     fragile ecology of the Arun Valley, home for 450,000 people.
     Up to 10,000 people will work on the project during its peak
     implementation period but no provision has been made for their
     housing, education, and health care needs. It is feared that
     the squatter type settlements will follow inward migration and
     this will devastate local forestry resources and intensify
     soil erosion. Surprisingly, in its current form the blueprint
     of the Arun project includes no plans for the development of
     the Arun Valley itself--plans that will continue to benefit
     the local population after work on the project infrastructure
     is completed.
     4. The foreign loan commitments for the project will burden
     the country with unpayable debt. ACG estimates that, including
     loan commitments for some other projects, Nepal's foreign debt
     will increase from US$1,800 million to US$2,400 million over
     the next few years, which will require the Government to spend
     most of its revenue just for debt servicing. ACG perceives
     that the country will be pushed into bankruptcy if the
     Government takes up Arun-type projects with their heavy
     dependence on loan capital, foreign technology and equipment,
     and dubious return on investment.
     5. An unnecessarily large amount--some US$140 million--is
     being spent on the 117-kilometer access road to the project.
     The proposed road will be almost ten times more costly than
     other similar road projects in Nepal.
     6. The Government should have entered an agreement with China
     for assuring the uninterrupted flow of water to the project
     since about 80 percent of the Arun River's catchment area
     falls in Tibet. However, no contacts with the Chinese have
     been made and, reportedly, the Chinese Government has its own
     plans to develop hydroelectric resources in the region.
     7. The project lies in the seismically active zone which poses
     great risks to the long-term viability of the project. Also,
     the risk of flooding from the sudden breaks of glacier lakes
     has not been evaluated.
     8. The feasibility of the project will depend in some part on
     the sale of surplus electricity to India for which a long-term
     sales agreement should have been concluded. This has not been
     done.
     9. Because of the distance involved between the project site
     and Kathmandu where most electricity will be consumed (some
     200 kilometers), the Arun Group contends that as much as 30
     percent transmission loss can be expected, compared with the
     normal 10 percent. Other feasible sites closer to Kathmandu
     should have been investigated.
      III. Cost Effectiveness

     Finally, there is the concern about the cost effectiveness of the Arun project which ACG mentions but does not elaborate. However, from the author's point of view, this is the most decisive criterion against which the usefulness of this project--and, indeed, of all hydroelectricity projects, past and future--should be judged.
     The table below presents electricity tariff rates for household use for regional countries and for two non-regional countries to emphasize the international character of this comparison. It is assumed that households are the predominant user of electricity in developing countries and, therefore, this is the representative rate.
     It is rather surprising that the cost of electricity (which is assumed to be reflected in the price to consumers) is highest in Nepal even when the country, reportedly, possesses the world's largest and more accessible hydroelectricity resource, the cheapest of all primary energy source. (Nepal's estimated hydroelectricity potential is said to be 83,000 MW or equivalent to that of the United States and Canada combined). The cost per kilowatt hour is lower even in Bangladesh , which has very little of this resource. The most surprising comparison is with Bhutan; even though both Nepal and Bhutan depends on hydroelectricity resource to about the same degree, per unit cost in Bhutan is only about one tenth of Nepal's. In terms of per capita income, which takes into account factor price differential as a possible source of variation in cost
(for reasons of higher wage and service costs in richer countries), Nepal's comparison with other countries looks more unfavorable.
     The fundamental question, then, is not only that whether Nepal should make investments in the Arun project but whether it should at all the business of producing electricity! Economic efficiency in an environment of an open trading system requires that a country should specialize in the production of only those things that it can produce at lower cost than any other country and, conversely, it should import those things which others can produce at a lower cost. Usually, the services items, including electricity, are not tradable goods and, therefore, would need to be produced locally at any cost if the community desires to use that service. However, in the case of Nepal, because of its location, electricity can be treated as a tradable good, probably amenable to more convenient transport from the neighboring countries than the normal tradable items.
     If so, then what is the problem if we let the Nepalese consumers use Bhutanese or Indian electricity at one rupee per kilowatt hour than making them purchase domestic electricity which costs four, and up to 6.2, rupees per kilowatt hour? Certainly, we can manufacture automobiles and airplanes in Nepal but if these can be bought at a fraction of the cost from elsewhere then why bother producing them at all? We should, instead, concentrate our resources on producing only those things in which we have got, to use an economic jargon, a comparative advantage. This surely makes good economic sense and may also help our relations with the neighboring countries.
     However, before we can be serious about this particular option, we need to know whether the cost of electricity in Nepal is high because of the natural and technical factors or, so to speak, it is man-made. In my judgment, it is entirely thelatter as is reflected by the relative cost of hydropower development in Nepal vis-a-vis Bhutan and Vietnam. Bhutan's 384 MW Chukha hydroelectricity project, built during the 1980s, cost about 200 million US dollars, including the setting up of the transmission lines; this works out about US$0.5 million per MW capacity. Vietnam's 1,920 MW capacity Hoa Binh hydroelectricity project, completed this year after 15 years' work, cost about US$1,400 million or US$.73 million per MW capacity. Even assuming no significant cost overruns, the Arun III project in the first phase
(201 MW) will cost at least US$800 million or US$4 million per MW capacity. It is unlikely that such huge cost differential, even after discounting for inflation, can be attributed solely to the relative difficulties of the terrain which, probably, can be considered worse in the case of Bhutan.

IV. Public Sector Efficiency

     One of the principal theories governing trade between nations is their relative endowment of the factors of production (land, labor, capital, environment). Generally, this theory states that a country finds it cheaper to produce those things which make use of its most abundantly available factors of production. Because of the low cost of production of goods made out of abundant and, implicitly, low cost resource, the country would tend to export its abundant resource intensive products and import those products which are likely to utilize its scarce factors of production more intensively and hence can be more costly to produce.
     Since the electricity we produce is based on our most abundant resource--the hydropower--it is unusual that our electricity costs should be the highest in the region and, probably, in any other country for which data are available. The problem can be stated more generally: Nepal happens to be one of the most inefficient countries in the world in terms of the provision of all public services and not just the electricity. It is not that the Government does not spend enough money, relative to its budgetary resources, on the provision of public services--water, sanitation, health, education, roads and, of course, electricity. The more serious problem seems to be that the Government is spending it too inefficiently. The result, invariably, is that the quality of the publicly provided services is low while their cost, in some cases, extremely high.

V. Available Options

     In the context of structural reform, the Government, over the past few years, has been making vigorous efforts to privatize public sector enterprises. Under private management, it is hoped, they will make an effort to become more efficient and compete more successfully or, failing that, they will go out of business. Several industrial and commercial entities have been privatized under this program and, in due course, the program is being expanded to include all of the importantremaining such entities. However, there has been little discussion of the privatization of public utilities even when they are widely perceived to be wasteful and inefficient because of their monopoly position in the domestic market and an absence of competition from outside. In fact, about a dozen of the public enterprises have been excluded from the privatization program, of which the electricity and water corporations are the main ones. However, if the privatization program is concerned about improving efficiency and reducing waste, the electricity and water corporations should have on the top of the list of public enterprises to be privatized or, at least, moved from central to local jurisdictions.
     Coming back to Arun Project, the Government should have shown more sensitivity to the public concern about poor quality and high cost of electricity services in Nepal before undertaking any new investment in the public sector. It should be noted that, despite only moderate domestic inflation, electricity tariffs were increased by 60 percent in 1991, 25 percent in 1992, and by some 40 percent in March 1994. To begin with, the Government should have more vigorously perused the reform of the Nepal Electricity Authority (NEA) with a view to substantially reducing personnel costs and ensuring the efficient utilization of its repair and maintenance expenditure. An independent review of the NEA's performance relative its counterpart in neighboring countries would have suggested ways to improve operating procedures and cut costs.
     Because of the well-known inefficiency of (Central) Government investment in the energy sector, more consideration should have been given to investments by local governments and by the private sector. Operations of the non-governmental entities would have provided a healthy competition to the NEA and forced it to improve efficiency or go out of business. At the least, the NEA should have been required to privatize its bill collection operations. It is believed that large commercial and industrial users of electricity pay significantly less than what they actually consume because of their substantial resources to influence the concerned officials.
(It is rumored that the Soaltee Hotel, for several years, paid as little as 50 rupees per month in electricity charges to the NEA)
     Because of the lumpiness of investment in the development of hydroelectricity, it may be difficult to attract local entrepreneurs. Therefore, consideration should be given to encourage private investment from overseas, with or without local participation. In this connection, the Government should look into the possibility of foreign private investment through build- operate-and-transfer (BOT) and build-operate-and-own (BOW) arrangements. Such investments in several countries have played a catalytic role in the development of their hydro resources. Not only would the Government avoid the burden of debt and risks of structural damage to facilities from floods and earthquakes but also the operation of these facilities would provide a yardstick against which the efficiency of similar facilities in the public sector, including that of NEA, can be measured.

VI. Concluding Remarks

In a statement to the press on the Arun controversy in February 1994 the Government accused ACG for their obstructionist activities and for creating misunderstandings in public minds about the Arun Project. It further added that ACG's actions may lead to delays in the implementation of the project which may prove very costly for the country--total cost may increase to US$1.1 billion from the present US$764 million estimate if there is even one year delay.
     If that is all the Government has to say in defense of the Arun project--that the delays will cost money and, therefore, the project must go ahead--this can not be accepted as an adequate defense. The fact is that the Government is experiencing something entirely new--it is extremely rare in Nepal for a citizens' group to question Government's judgment on public sector investment priorities, much less taking legal action and demanding explanation! However, if we believe in a more open system of government, citizens' involvement in the issues of national interest should be encouraged and appreciated. It follows then that Government's response to ACG should be viewed as an opportunity to build public support for the project and make necessary adjustments if that becomes apparent after debating both sides of the issue. It will build democracy and also will help build a better project.

CONSTRAINTS OF NEPALI STUDENTS IN AMERICA

                       - S.D. Shah
                                                                         
     Growing affluence of the upper middle class families in Nepal's urban centers and most especially in Kathmandu has tended to boost the imports of luxury items. One of such items has been the college education in American universities.
     Accurate statistics are not available but it is suggested that the number of Nepalese college undergraduates in American universities has increased from only a few hundreds a decade ago to at least two or as much as four thousands currently.
     There is little doubt that the Nepalese parents who appreciate and can afford quality education for their children are making a right decision in sending their children to American universities. However, it may be too much to expect that these young kids can so easily be transplanted in a foreign land and achieve their full potential.
     The harsh truth is that most of these kids get a plane ticket to America and probably a little of pocket money. You must appreciate the fact that five lakhs rupees is still a princely sum in Nepal but its equivalent of ten thousands dollars may be just enough for the plane ticket and one year of the college expense.
     The truth then is that most of the affluent family kids coming to America for college education have to take upmenial jobs after a few months of arrival. To economize on the tuition costs, they choose less than high class colleges and take fewer than the full load of courses. It is not unusual to see four or five of them sharing one room apartment and arranging work schedules in order to minimize overcrowding of their limited living space. As the time passes, most of them find it difficult to balance their education and work time and, because of the pressing need to earn a living, their education suffers. Probably no more than one fourth of those coming to America for a college education complete a bachelor's degree and the time it takes to do so is considerably longer than the normal four years. Because going for a post-graduate education is not as much coveted in America as it is in Nepal, a majority of those finishing up college do not go on to do a Master's or Ph.D.
     Despite the hardships many young Nepalese face in America, they still find it attractive to come for college here, especially since the alternatives of staying in Nepal are not all that great.
     This perception, however, can change if we can offer quality college education in Nepal. Better still, if we can "import" an American standard of university education to make available to our college bound, affluent kids the American-style college education right inside of Nepal.
     Many of us may remember the American University of Beruit. Before the Lebanese civil war that erupted in 1975, this university was the magnet for promising young kids from throughout the Middle East and some parts of Asia. A degree from that university was as much coveted as from the best universities in America and Europe.
     Let us then give serious consideration to having universities in Nepal in collaboration with American universities and campuses. It would not take up too much of our own money. Many of the American universities may be willing to provide help--in building the campus as well as making available their teaching staff at only a nominal charge.

NEWS IN BRIEF

INFED OPENS ITS KATHMANDU OFFICE
                                    
     The International Federation of Nepalis (INFED) has opened its liaison office in Kathmandu. INFED is an alliance of Nepalis and their organizations based outside Nepal. Its main objectives and activities are: to work for the rights and benefits of Nepalis living abroad, to encourage and facilitate their contribution for the development of Nepal, to campaign for effective and secure labor-supply laws and institutions and to undertake programs for a democratic Nepal. Those who would like to know more about INFED, and receive its newsletter can write to: P.O. Box 2809, Kha 2/407 Putalisadak, Kathmandu, Nepal. Tel: 977-1-226525. Fax: 977-1- 412538.

ELECTIONS OF ANS/DC

     The annual meeting of the America-Nepali Society held in July in Virginia has formed a new Executive Committee for the 1994 term. The Committee is composed of: Vijaya Shah (President), Linda Shrestha (First Vice-Presidnet), Saroj Prajapati (Second Vice- President), Kush Mainali (Secretary), Gajendra Aryal (Treasurer), Surid Gautam (publication), Prabha Bhattarai (cultural coordinator), and Suresh Baral, Ram Malakar and Niva Pradhan and Paul Gallmgher as member at-large.

BHUTANESE REFUGEES NUMBER 1,00,000

     The number of Bhutanese refugees in Nepal has increased more than one hundred thousands due to continuing suppression of Nepali- speaking minorities in Bhutan. Bi-lateral talks for the resolution of the refugee problem with Bhutan have been held, but without significant progress. The main question remains: How to classify refugees and ensure their safe return to their home-country. These days, refugees are suffering from disease, malnutrition, and lack of adequate shelter despite the relief support of UNHCR and other agencies. Education to children has become a serious problem. Local people are complaining of increasing deforestation, and adverse impacts on social and cultural environment. Internal disagreement and infighting between different Bhutanese political parties and human rights groups have further deteriorated the situation of refugees in the camps. For more information in US, contact: Bhutanese Refugees Solidarity Group, 73 Phillips St., Boston, MA 02114, tel: (617) 742-1942 (J. Stephens).

NATIONAL CONCERNS SOCIETY FORMED

     Inspired by the work and achievement of the Arun Concerned Group in raising hydro-power development-related issues in Nepal, a gathering of concerned citizens, lawyers, journalists, human rights activists and professionals have formed a National Concern Society followed by the protest of Indian army's intervention in Nepal a few months ago. The Society has identified some fundamental issues of national concerns that need to sincerely and immediately be addressed by the government, political parties and citizens of Nepal. These issues include: adverse effects of forced privatization andforeign aid; structural adjustment programs and donors' conditionalities; accountability and transparency of government and parliament; regulation of open Nepal-India border; and control of free-flow of Indian immigrants to Nepal; resolution of citizenship problem with the issuance of national identity card followed by work permit for foreign nationals; cancellation of unequal treaties with India, e.g. so called peace and friendship treaty of 1950, and several others relating to Nepal's water resources; and cut in defense spending. The Society is said to remain completely independent from any political party and ideology and is only concerned with national issues of common concerns and democratization of Nepali society with full respect to their human rights.

HUMAN RIGHTS TRAINING TO LAW-ENFORCEMENT OFFICIALS
                                    
     Kathmandu-based International Institute for Human Rights, Environment and Development (INHURED International) organized a three-day long human rights study session for about 80 law- enforcement officials (police, judges, prosecutors, prison and administrative officials), and lawyers and NGO representatives in Kathmandu in June 1993. The program was supported by the UN Voluntary Fund for the Victims of Torture, and Swiss Development Cooperation/Nepal. Lectures on international human rights norms and standards, minimum use of force, measures for the abolition of the practice of torture, investigation of human rights violations and compensation to victims, and experiences of human rights education and training in other countries were delivered by Nepali and international experts, including Prof. Reynaldo Ty of the University of the Philippines, and Ahmed Othmani of London-based Penal Reform International.
     The training was found unique and useful according to the participants. Follow-up training programs are underway with the preparation of a manual on human rights education and training for law-enforcement officials in the country.

CHILDREN'S RIGHTS SEMINARS AND FORMATION OF CHILD WATCH
                                    
     INHURED International, Child NGO Federation, Children at Risk and UNICEF-Nepal jointly organized a national seminar on the implementation of the UN Convention on the Rights of the Child in Kathmandu in March 1993. The main purpose of the seminar was to review and make comments on the draft initial report of the government on the Child Convention to be submitted to the UN Committee on the Rights of the Child which is based in Geneva. The 200 participants, including 30 children, coming from different parts of Nepal have made various recommendations to the government for the realization of child rights (particularly survival, development, protection and participation) and formed a follow up federation called CHILD WATCH for theimplementation of its Kathmandu Declaration on the Rights of the Child in Nepal INHURED International as the Coordinator and Secretariat. In addition, the same groups facilitated another week-long national seminar of children, for children and by children with the establishment of a Child Awareness Group and a separate Kathmandu Declaration.
     These initiatives have been considered as best examples of NGO-government co-operation in the effective implementation of various international human rights treaties which Nepal is a State Party (including conventions relating torture, racial discrimination, slavery, discrimination against women, and covenants on civil, political, and economic, social and cultural rights.) Children and Women Department of the National Planning Commission is in the process of finalizing the report with the representatives of Child Watch and Child Awareness Group. Interested people and organizations can contact to: Child Watch, c/o INHURED International, P.O. Box 2125, Putalisadak, Kathmandu. tel: 977-1-226325, fax: 977-1-412538.

HUMAN RIGHTS YEARBOOK 1993 RELEASED

     Informal Sector Services Centre (INSEC) has released its 1993 Human Rights Yearbook and has documented series of human rights violations and abuses by police, with special highlight on discrimination of untouchability. The 512-page Yearbook can be available from: INSEC, P.O. Box 2726, Kathmandu, Nepal. Tel: 977-1- 270770.

NEPAL DISAPPOINTED UN COMMITTEE AGAINST TORTURE

     The Geneva-based UN Committee against Torture, a treaty monitoring body, has expressed its serious concerns over Nepal's 2- page initial report about the implementation of the UN Convention Against Torture ratified by Nepal in 1991. The Committee has requested the government to submit its detailed report within one year, including legislative, judicial, administrative and other measures undertaken for the abolition of the practice of torture in Nepal, punishment to perpetrators of torture as a crime, adequate compensation and rehabilitation to victims of torture and their families as well training to law-enforcement agencies.

REPORT OF SUPPORT TO FLOOD VICTIMS IN NEPAL
                                     Nepal Human Rights Committee lunched a fund-raising campaign to support flood victims in Nepal last year. The amount of $2,680 from the total amount of $2,933 ($253 as per expense) has been sent to the Natural Disaster Relief Support Group (NDRSG), a non- governmental relief organization composed of social workers, human rights activists and politicalparty leaders.
     NHRC has received a report from NDRSG that the donation has been used to provide immediate supplies to the flood victims of Gadhou VDC (Routahat) and Nipane VDC (Sindhuli). NDRSG is planning to further support these two villages in housing, schooling and medical care, including income-generation programs.
     Anyone who is interested to make a generous donation in this effort can send a cheque or money order payable to the Nepal Human Eights Committee.
     NHRC would like to express its sincere thanks to the following individuals for their generous contribution to this humanitarian cause in support of the flood victims in Nepal: Audrey Chapman, Pure Ghimire, Shanker Shrestha, Ganesh Lal Kayastha, Balram Aryal, Bishnu Paudel, Rita Tiwari, Laxman Sedhai, Sanjeev Singh, Sukhdev Shah, R.C. Kharel, Sunita Siwakoti, Bir. B. Adhikari, Mina Cheetri, Madhusudan Giri, Huyen B. Le, Annie Goorman, Monique Voisin, Barbara R. Burton, Quazi M. Hafiz, Emil M. Sunley, Joao D.E.N. Santos, Anil & Nirmala Bhatia, Beryl Jeffey, Johannk Schultz, Ram C. Malhotra, Louise L. Bourne, Luke Whitesell, Homnath Subedi, Mahid Mejid, Tarek Chubuki, Bipin Karki, Pawan G.C., Sonu Regmi, Bhaskar Giri, Helen Abadzi, Meena Sharma, Devi Acharya, Kabindra Sitoula, Udaya Mainali, Netra Ghishing, Suresh Baral.

ARUN III COMMISSION AND ACTIVISTS UNDER PHYSICAL THREAT!

     NHRC-USA is concerned that a group of people claiming themselves as the "supporter" of Arun III attacked the office of the People's Commission on Arun III Hydroelectric Project and mishandled some members of the Commission on July 22, 1994 in Kathmandu. However, no serious injuries occurred. The mob then moved towards the office of INHURED International, the Secretariat of the Arun Concerned Group, with threats of physical attacks to its key officials, but were interrupted by the police. The hooligans were also searching for activists who are leading the campaign and those who came to the World Bank in June to present their arguments on Arun III. NHRC would like to urge the Nepali government to undertake necessary measures for the safety and physical integrity of those who are expressing their concerns on Arun III and take legal action against those involved in such unlawful activities.

ELECTION OBSERVATION IN NEPAL

     Nepali human rights groups have formed a National Election Observation Committee (NEOC) to coordinate local and international election observers during the upcoming elections. Washington, DC-based National Democratic Institute is also planning to get involved in the monitoring process.

NEPALESE ABROAD CONDEMN DISSOLUTION OF PARLIAMENT IN NEPAL
                                    
                    Nepal Human Rights Committee-USA
                     August 2, 1994, Washington, DC
     
     The Nepal Human Rights Committee-USA would like to express its deep concerns regarding the recent dissolution of the
"sovereign" Parliament by the King upon the so called recommendation of the Prime Minister which was done without proper consultation with the political parties in the Parliament. We view it no more than a consequence of the defective Constitutional provisions that did not guarantee the real sovereignty of the Parliament, but retained the absolute power of the King in many aspects such as this. In the long run, what Nepal needs is struggle for the amendment of the many controversial, undemocratic and unclear provisions of the present Constitution so that the sovereignty of the people and the basic characteristics of a constitutional monarchy can be materialized in real sense. This has been the position of NHRC-USA since it submitted its critical recommendations to the then Constitution Recommendation Commission in 1990.
     With regards to the present political crisis, NHRC-USA would like to urge all political parties, citizen's groups and the people of Nepal to work for the establishment of a healthy and trustworthy political environment so that free, fair and impartial electoral processes can be ensured for the November elections guaranteeing the possibilities for the victory of more democratic, honest and dedicated new generation leadership who have long-term visions for human rights and democracy that Nepal is in desperate need.

Alliance for Democracy and Human Rights in Nepal
                         July 27, 1994, New York
                                    
     The Alliance for Democracy and Human Rights in Nepal expresses its outrage and condemnation of the dissolution of the House of Representatives - "Pratinidhi Sabha" on July 10th, 1994 by His Majesty the King on the undemocratic and immoral recommendation made by Prime Minister Girija Prasad Koirala - who had earlier tendered his resignation. The conspiracy and "Grand Design" enacted by the various reactionary forces to weaken democracy and crush the people's aspirations is obvious. This action is a direct violation of the goals and spirit realized by the Jana Andolan in April 1990. As long as this government remains in power, no fair and impartial elections will be held. To guarantee the fairness and impartiality of the November 1994 election, a caretaker government must be formed which will be acceptable to all the concerned parties.
     A national consensus and goodwill must be forged by all the political forces to safeguard Nepali nationalism, monarchicalmulti-party democracy and human rights in Nepal. We hope that the concerned parties will fulfill the people's aspiration.

     We express our solidarity with the brothers and sisters back home in Nepal.

CONSTITUTIONAL PROVISIONS REGARDING DISSOLUTION OF PARLIAMENT AND "SOVEREIGNTY"
                                    
     Article 42: Special provisions Concerning the Council of Ministers:

     (1) If no one party has a clear majority in the House of
     Representatives, His majesty shall appoint as Prime Minister
     a member who is able to command a majority with the
     support of two or more parties represented in the House.
     
     (2) If no member is able to command a majority in the House
     of Representatives even pursuant to clause (1) above, His
     Majesty shall appoint as Prime Minister the leader of the
     Parliamentary party that holds the largest number of sets in
     the House of Representatives.
     
     (3) A Prime Minister appointed pursuant to clause (1) or (2)
     above shall be required to obtain a vote of confidence from
     the House of Representatives within thirty days.
     
     (4) If a Council of Ministers constituted pursuant to the
     provisions of clause (2) above fails to obtain a vote of
     confidence from the House of Representatives, His Majesty
     shall dissolve the House of Representatives and issue an
     order for holding elections within six months.
     
     Article 53(4): His Majesty may dissolve the House of Representatives on the recommendations of the Prime Minister. His Majesty shall, when so dissolving the House of Representatives, specify a date, to be within six months, for new elections to the House of Representatives.

     The Preamble of the Constitution states that "the source of sovereign authority of the independent and sovereign Nepal is inherent in the people". Article 3 of the Constitution provides that "The sovereignty of Nepal is vested in the Nepalese people and shall be exercised in accordance with the provisions of the Constitution."

     A landmark interpretation of these provisions is expected from the Supreme Court in few weeks.

BOOK REVIEW

JUSTICE DENIED!
                                     HUMAN RIGHTS AND INTERNATIONAL FINANCIAL INSTITUTIONS

     The book is indispensable for anyone who wants to understand how the global economic system works today and the terrible toll it is taking on the world's people and environment.

     Based on presentations by more than 25 speakers at a Public Hearing held during the UN World Conference on Human Rights in Vienna in June 1993, the book addresses obstacles to the realization of civil, political, economic, social and cultural rights and the right to development around the world. Speakers cover the effects of debt, structural adjustment and other policies of the World Bank, the International Monetary Fund, the General Agreement on Tariffs and Trade, transnational corporations, donor agencies and governments on children, youth, students, women, peasants, indigenous peoples, workers, and the environment.

     In easy-to-read language, the voices of the people from all regions of the world help make the connections between human rights, the environment, development, peace and security, and democracy and popular participation in national and international decision-making.

     The book is a contribution of NGO discussions and activities related to the 50th anniversary of the Bretton Woods Institutions, the 50th anniversary of the United Nations, and UN events including the International Conference on Population and Development, the World Summit on Social Development, and the World Conference on Women.

     The book has been edited by Janet Bruin, and published by Kathmandu-based International Institute for Human Rights, Environment and Development (INHURED International) and Geneva- based Women's International League for Peace and Freedom (WILPF). Copies of the 185-page book can be ordered in US$14 or equivalent from: INHURED International, P.O. Box 2125, Kathmandu, Nepal, tel: 977-1-419610, fax: 977-1-412538 (for Asia and Africa) or 733 6175, fax: (41-22) 740-1063 (for Europe) and Laxman Sedhai, 2705 S. Fern St. #12, Arlington, VA 22202, tel: (703) 683-7501 (for North America).
                 
         NHRC-USA MEMBERSHIP FEES:
                           
                                    STUDENT $10
                                  INDIVIDUALS $15
                                    FAMILY $20
                                 INSTITUTIONS $30
                                     LIFE $100
                                         
                    CHEQUE OR MONEY ORDER SHOULD BE MAILED TO:
                                         
                         NEPAL HUMAN RIGHTS COMMITTEE-USA
                       P.O. BOX 53253, WASHINGTON, DC 20009
                                  (703) 519-1728
                                         
  WE APPRECIATE VERY MUCH YOUR COOPERATION AND PARTICIPATION IN THIS COLLECTIVE
                                     EFFORT!
                                         
                     NEWS, COMMENTS AND ARTICLES ARE WELCOME!
                                         
                                          E-mail: psubedi@osf1.gmu.edu Mailing Address: Nepal Human Rights Committee-USA P.O. Box 53253 Washington, DC 20009
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