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*************************************************************************** From: firstname.lastname@example.org (Purushottam Subedi (CS 555)) Subject: Information on Arun III project To: email@example.com Date: Sun, 15 Jan 1995 00:35:08 -0500 (EST)
(Following information is supplied by Nepal Human Rights
Committee-USA. The information is also in The Nepali Literature
Home Page on WWW at the following http address:
http://www.site.gmu.edu/~psubedi. You need to follow the hot links
"NepalHuman Rights Committee-USA" then "Arun III". The latest copy of Nepal Today published by NHRC-USA can also be found there.)
CONTROVERSY OVER WORLD BANK-SUPPORTED HYDROELECTRIC PROJECT IN
July 31, 1994
The following information on the World-Bank supported mega
hydro-el-ectric project in Nepal has been compiled by Gopal
Siwakoti, Executive Director of Kathmandu-based International
Institute for Human Rights, Environment and Development (INHURED
INTERNATIONAL) and a founding member of the Arun Concerned Group,
with the main objective of providing detailed information about
Nepal's most controversial "development" project in history for the
benefit of those who have access to e-mail as well as to those who
would like to participate in the debate.
On the basis of the following information and your own
independent sources, we would like to request you to:
1. Express your concerns in writing to the government of Nepal,
World Bank, Asian Development Bank and other bilateral donors
(Finland, France, Germany, Japan, Sweden); 2. Urge the donors not to reach into any final decision on Arun III before it is fully debated in and approved by the new Parliament to be elected in November 1994; 3. Publicize Arun III issues in your network, e.g. your own E- Mail network, and publications.
We appreciate very much if you could send us a copy of your
appeal or publications on Arun III, if any, at Arun Concerned
Group, P.O. Box 2125, Kathmandu, Nepal.
More information can be obtained by contacting in the following addresses:
P.O. Box 2125, Kathmandu, Nepal
Tel: (977-1) 419610, Fax: (977-1) 412538
Arun Concerned Group
(c/o INHURED International, Secretariat)
Nepal Human Rights Committee-USA
Alliance for Energy
P.O. Box 2772
Baluwatar, Kathmandu, Nepal
Fax: (977-1) 220161
International Rivers Network
1025 Vermont Ave., NW #300
Washington, DC 20005
Tel: (202) 783-7400, Fax: (202) 879-4293
e-mail: irndc @ igc.apc.org.
TABLE OF CONTENT
Arun III: An Introduction and Issues of Concern
Arun Concerned Group
NGO Presentation at the World Bank Consultation
(a) Issues Regarding Access to Information and Public Participation
on Arun III
Gopal Siwakoti, Arun Concerned Group
(b) Arun III and Alternatives of Energy Development in Nepal
Bikash Pandey, Alliance for Energy & ITDG
(c) Arun III and Its Environmental and Social Impacts
Ganesh Ghimire, Arun Concerned Group
Joint Appeal to the Executive Director of the World Bank
Joint Appeal to the Bilateral Donors (Finland, France, Japan,
Memorandum Submitted to Executive Directors and bilateral donors
on Arun III Hydroelectric Project in Nepal Regarding Access to
Information and Parliamentary Discussion
Gopal Siwakoti, INHURED International
Supporters of Proposed World Bank Hydroelectric Dam Threaten
Lives of Objectors, Nepalese Government Encourages Attacks on
Press Release of the Friends of the Earth-USA
The Historic Decision of the Supreme Court in favor of the Right
to Information on Arun III Hydroelectric Project
International Solidarity on Arun III Campaign
A. Letter of GLOBE to the World Bank
B. International Non-Governmental Organizations
C. US Congressman
Nepal Government's Position on Arun III
Major Hydroelectric Projects Identified by the Government
What Prime Minister GP Koirala Said about World Bank Two Years Ago
The World Bank has postponed the July 26 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. Japanese government's study mission is already in
Nepal during the week of this compilation (July 31, 1994)
Other reasons may be that Nepal is facing a political crisis
due to the resignation of its elected Prime Minister and
dissolution of the Parliament and the preparation of mid-term
elections on November 13, 1994. There is widespread concern both
inside and outside the World Bank that the project should be fully
debated in and has to be approved by the Parliament.
Recently, NGOs from Nepal and others have raised series of
issues and concerns at the World Bank. They include: the denial of
basic project information, violations of the Bank's operational
standards and policies, and lack of study on alternatives to Arun
NGOs say that since the release of information process has
just began after the Supreme Court 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.
AN INTRODUCTION AND ISSUES OF CONCERN
(The following is the text of the first campaign booklet prepared
by the Arun Concerned Group)
Arun-III hydro electric project will have tremendous long-term
impacts on the socio-economic life of the Nepalese people. In view
of the effect that such an undertaking may have on national
development needs, environment, realization of human rights and
promotion of participatory democracy, the Arun Concerned Group
(ACG) has evolved from among citizens' groups and individuals to raise concerns. ACG is an open participatory platform of individuals and organizations for equitable and participatory development approaches, environmental conservation, sustainable development and the realization of human rights. This Group advocates that Nepal needs adequate infrastructures and local capabilities to pursue the path of sustainable and people-centred development. ACG firmly believes that creating huge superstructures like Arun III shall not meet any worthwhile cause of the Nepali nation and its people.
This document has been prepared by a group of professionals, namely
Bikash Panday, Ganesh Ghimire, Gopal Siwakoti, Gopi Upreti and
Pitambar Chhetri, for the Arun Concerned Group.
c/o INHURED INTERNATIONAL
International Institute for Human Rights, Environment and
P. O. Box 2125
Putalisadak, Kathmandu, Nepal
Tel: (0977-1) 419610
Fax: (0977-1) 412538
AN INTRODUCTION AND ISSUES OF CONCERN
According to the Koshi basin study undertaken by the Japan
International Cooperation Agency (JICA) in 1985, six sites of the
Arun river were identified as attractive for further studies with
a view to generate electricity. The third hydro-power site among
the six as counted from the north was named as Arun III. The study
also concluded that altogether 3 projects Arun III, Arun II which
is called upper Arun and Arun IV which is called lower Arun could
also be financially competitive. On the basis of this conclusion,
the pre-feasibility study of Arun III was immediately undertaken in
1985 and was completed by 1987. Based on the conclusion and
suggestions of these study reports prepared by foreign consultants
with foreign aid, efforts were made to acquire financial assistance
for this 402 MW project with their cooperation. A comparative study
of other candidate Hydro Electric Projects was undertaken in 1988
(Least Cost Expansion Generation Plan LCGEP) wherein manipulations were made to justify Arun III project as the least expensive by arbitrarily padding the costs of other attractive candidate projects. With that objective achieved, Arun III was treated as a priority project and a detailed engineering study was undertaken with financial assistance from foreign donors and lending agencies
(hereinafter "donors"). In the meeting held in Paris in May 1988, the donors and countries including the World Bank, Asian Development Bank and Germany assured US $ 550 million as assistance for the project. A reconfirmation study or Arun III with commencement in 1990 was then made, wherein manipulations were again made which projected Arun III as the least cost sequence. Though the initial LCGEP looked at the 402 MW development and envisaged construction beginning in 1990 and completion of works by fiscal year 1996/1997, the reconfirmation study considered the implementation of 402 MW single phase alternative and the 268 MW and 134 MW two staged development alternative with all infrastructures needed for the 402 MW to be constructed in the first phase itself. The revised implementation schedule targeted commissioning in 2001. One of the major assumptions in justifying Arun III was the expected export of all surplus power, more than half the installed capacity, to India.
Following the World Bank's loan of about US $ 34 million to
construct the access road, the Department of Roads His Majesty's
Government of Nepal (HMG/N) invited bids for the roads in 1989.
Though the lowest bid received was nearly double this amount, due
to reasons proven only to the World Bank and the authorities, the
bids were rejected and the access road construction was integrated
with the Hydroelectric Project activities to be undertaken under
the Ministry of Water Resources, HMG/N responsibility. The present
estimated financial cost of the access road is said to be US $ 149
million, twice the initial bid amount.
DETAILS OF THE PROJECT
For the run of river hydroelectric scheme a 68 meter tall and 155
meter long concrete dam will be constructed at Num Fyaksinda in the
northern part of Sankhuwasabha district to divert the waters of the
Arun river through two 11.5 kilometer long tunnels of 5.6 meters
diameter to the underground power house at Pikhuwa of Diding Danda
Village. Six units of 67 MW capacity will produce 402 MW of
electricity to be transmitted to Duhabi in Sunsari district by a
220 kilovolt transmission line, 120 km long. The construction of a
117 km. long access road from Hile of Dhankuta district to the
power station and the dam is also considered to be an integral part
of this project. Though the full capability of 402 MW will generate
2885 GWh of energy, the first phase of 201 MW will generate average
energy of 1744 GWh out of which 1513 GWh will be firm energy. The
first phase will have only one tunnel and power house for 3
generating units only. The total cost for 201 MW first phase is
estimated at US $ 764 million. As a result, the 4.5 meter wide
access road will become a very costly road (1.25 million US $ per
km as compared to the average US $ 0.2 million per km), in fact,
the costliest road built in Nepal to date. In the construction
program of the project, powerful Chenuk helicopters are to be
regularly used and the simultaneous construction of the entry road
and the dam are to be done by the same foreign contractor. During
the construction period, the number of people to be employed for
daily work will vary from 3,000 to 10,000. To complete the
construction work as early as possible, sophisticated machines and
latest technologies are to be used with minimal use of local
manpower and resources. The dam, tunnel and access road components
have been combined into a single package and contracted to a
foreign contracting joint venture depriving the local and
international contractors of bidding for the access road only .
As the financial viability of Arun III is contingent on export of
electricity to India over and above the committed exchange of 50 MW
currently agreed upon with India, the donors insisted initially on
an agreement to be in place for the export of power. However, this
has yet to materialize. The huge financial resources necessary for
project implementation and the funding constraints necessitated the
postponement of project construction. This was one of the major
reasons, for changing the project site and the implementation
schedule for the installation of the 402 MW single stage and the
268 MW, and 134 MW two staged construction to be completed by
1996/1997 and 2000/2001 respectively. The 201 MW Baby Arun has been
tailored to meet the financial requirements and fit inside the
macroeconomic resource affordability envelope of the poor country.
It must be noted that no unbiased LCGEP has been conducted to
justify the project as being in the least cost generation sequence
in the changed context of delay, revised load demand, export
constraints and availability of latest feasibility reports of other
attractive projects suited to the country's current development
needs. (In the LCGEP study Arun III was included as a project to be
constructed by 1997 at a cost of 720 million US Dollars with a
capacity of 402 MW in a single phase.)
- Water is considered to be the most dependable factor in the
natural resources of Nepal. There is a necessity of proper
development and multipurpose use of water resources in Nepal where
available resources for modernization and development are scarce.
This is an indisputable fact.
- If any other small, medium or big projects are really less expensive, have multiple usage and are conducive to national and local welfare, such projects should be implemented in a proper cost effective and timely manner. In reality, a national concensus is needed in determining water resource management as part of a well- planned national development agenda.
- From the long term perspective, the implementation of Arun III in its present form may not be justified to increase electricity consumption and generation in the country. It would therefore be proper to develop the necessary infrastructure in a less expensive manner and with public participation at different levels.
In a poor country like ours, it is a well known fact that development with the help of external agencies is largely decided by commission agents, corrupt decision-makers and businessmen and biased international interests. These selfish elements are always interested in big projects that involve only few people. For them, many small projects and the involvement of many people in the decision-making process is problematic and not profitable. According to our experience, large numbers of small and medium projects can be conducive to national interest and helpful to the people.
1. The proposed implementation of Arun III project in the present
changed context will push the country to a great risk. The
addition of 402 MW of electricity by a single project like Arun
III will increase the total generation capacity of the country
from about 250 MW at present to about 700 MW by 2005. In the
future all aspects of national life such as development works,
industries, transport, commerce, health, education and
administration sectors as well as the individual and domestic
life of many Nepalese will be dependent on the supply of
electricity. In this situation, the electricity supply system
of the country will be highly dependent on Arun III. If there
are any big problems in this risky project or if the electricity
cannot be supplied due to hitches it will be difficult for the
country to get over the subsequent negative impacts. Although
Arun III is now claimed to be a 'safe' project, the 'safe'
project Kulekhani HEP was damaged considerably by the recent
floods and the country is still suffering from load-shedding.
The big question is whether the country can withstand this
particular risk and its potential impact. In view of the low
risk bearing capacity of the country, it is reasonable to
broaden the base of its electricity supply system, i.e. the
national capacity should be increased through the construction
of many medium-sized hydro-electric projects spread throughout
different geographic regions of the country. In such a manner
the element of risk will be reduced. Serious thought towards
constructing Arun III should be given at a more appropriate time
when the country has attained sufficient capacity and
2. In a country like Nepal, the annual budget is about US Dollar
400 million inclusive of all development expenditures for the
year (including salaries, allowances, graft, the profit of
contractors and the contribution of poor Nepalese). There has
been no specific discussion in the parliament before the final
decision on Arun III (US Dollar 764 million) implementation is
taken. If the country is committing itself now to this project
with the help of commission agents and corrupt and vested
interests, this commitment needs to be fulfilled by any party
which forms the government in the future and the country cannot
retract or escape from the adverse effects. A national debate
is necessary on Arun III before any further commitments are made
and it is imperative for all to work towards a national
All the agreements and accords to be concluded or commitments
to be fulfilled regarding Arun III should be postponed for the
time being to enable wide national debate. There is a provision
of about 10% local investment (about US $ 142 million) to be
made by the government and the Nepal Electricity Authority (NEA)
for the Arun III project. This is a huge amount and it will have
to be diverted from many priority social sector programs needed
to uplift the people from poverty.
3. In a developing country like ours where the rate of growth is
minimal, the adoption of sophisticated technologies and the use
of expensive international contractors without proper attention
to local resources and capacity has been proven wrong.
Development does not mean a combination of activities to be
carried out only on the strength of external resources and
capability. Quite contrarily, it is an internal process to make
the Nepalese society more self-reliant, to increase the standard
of living of Nepali people and in totality to transform Nepali
society to a higher economic and social dimension. In our
country where a new political system based on the participation
of the people has just been initiated, the future of the country
can not be bright unless development and politics are
complementary. In such a context, the lack of clear direction
regarding the available resources to be mobilized for
development will lead to a bleak future. The popular slogan few
years ago, "Green Forest is the Wealth of Nepal" has now become
senseless. Our forests instead of being assets for development
have become a liability for the country as they are to be
protected with loans and assistance from other countries. It is
necessary for all to be conscious about the process of gradually
developing water resources, the only remaining resource in
Nepal, in a least cost optimum manner. Otherwise, like the
forest resources, water resources will prove to be a burden to
the country. If we go on undertaking hydro-electric projects
beyond our capacity, depend only on foreign consultant services
and contractors and focus our attention only on big projects,
the time will come when we have to be fully dependent for the
maintenance of such hydro-electric projects. Arun III and its
presentation in the present shape and form has ignored the
present and future need of the country and it is to push the
country further towards the brink of national disaster.
4. Although Arun III may be projected as an attractive project by
its proponents, this project can only be beneficial to the
country when we can sell the electricity produced to the
northern parts of India (Bihar UP and West Bengal). In the
absence of the commitment of the buyer (such as a guarantee that
India will buy the electricity generated from Arun project at
a market rate) and other congenital conditions prior to
implementation. The future holds enormous uncertainties with
bleak prospects. Infrastructures must first be developed, since
it takes considerable time for the completion of attractive
projects, especially big projects. It is an established fact
that donors propose a hike in electricity tariffs as a pre-
condition for loan negotiations. The construction of roads, the
development of local capacity, mitigation measures for
deteriorating environmental and social balance, the
infrastructure for housing in areas with high population
density, community and local development (agriculture, health
etc.) are things which must be given top priority and developed
first. These preconditions will determine and create necessary
infrastructures for a huge project like Arun III, to be
implemented. In the present situation, when attention needs to
be primarily focused on developing these preconditions, it will
not be in the interest of Nepal to decide on the construction
of the project while completely ignoring the development of
5. Arun III, which is supposed to supply electricity after 2000
cannot be the solution for the present scarcity of power load
shedding. We must look for other alternatives such as Khimti,
Bhotekoshi and Modi Khola project to supply electricity before
that period. The electricity rate is expected to reach US $ 12
cents/KWh or Rs. 6.20 per unit, a very high price even by the
standards of a developed country. The implementation of Arun III
will further burden the people with more rate increases during
the course of implementation (10 years), possibly forcing the
people of one of the five poorest countries of the world to
revert back to other cheaper, depletable and environmentally
unfriendly energy sources. Instead of a hasty decision on the
construction of Arun III, we should think of taking up small and
medium size hydro-electric projects immediately which can supply
electricity before the year 2000 cheaply and with lower
investments by using available financial resources and local
capabilities. Otherwise, it is difficult to imagine how the
Nepalese will use electricity at such alarmingly high prices.
6. The Arun valley comprising the whole of Sankhuwasabha, many
areas of Bhojpur and a large area of Dhankuta districts, is
considered to be rich in natural resources. The bio-diversity
in its Northern parts as a result of variation in altitude, its
micro-climatic zones, its still intact plistine forest in the
valley with rare wildlife and valuable medicinal plants, its
greenery, river and streams are unique and they need to be
protected. These cannot be protected by simply giving directives
to the contractors who are to do the construction work of the
project. For about 450,000 people living in this valley these
environmental resources are factors closely linked to their
livelihood. A proper way of mobilizing these resources in a
sustainable way should be developed with the participation of
the local people. A basic framework can be created within a few
years by conducting programs for environmental protection and
the use of resources with the participation of local people.
Without a sound basis for environmental protection (mechanism
and with only a window dressing in saying that attention shall
be given to such things during the period of the construction
of the project), the construction of Arun III project can create
long term and permanent negative effects on the environment.
7. It is widely known that a large part of the waters to be used
for Arun-III flows down from the Chinese autonomous region of
Tibet and that 80% of this river basin lies in Tibet. It has
been widely discussed that there are several projects
(irrigation and hydro-electricity) in operation in Tibet to use
the water of the Arun river. It has also been proven by
international experience that the agreements and goodwill of
both countries are necessary for hydro-electric development
projects on a common river. In this context of Arun III,
adequate homework needs to be done in this regard and HMG of
Nepal has not made any efforts to secure the agreement of the
Chinese government. At present there are no big projects in
Tibet utilizing the water of the Arun river. However, we can not
say with certainty that such big projects will not be initiated
within a period of 40-50 years in the future. So, it is
necessary to secure the agreement of the Chinese government in
advance. For such long term agreement, the parliament must play
a significant role.
8. In spite of many arguments of safety against geographical risks
like Glacier Lake Outburst Flow (GLOF) and earthquakes by the
project authority, experts are not satisfied with the
information and studies available and they say that the studies
and research done so far are incomplete and unsound. No project
can be fully free of risks and there is always a room for
additional study and research. From the technical point of view,
there can only be assumptions about GLOF and the floods caused
by the stoppage of river as a result of landslide. Such a risk
can be avoided if a regular study is made about the level of
water in such glacial lakes and arrangements made for the flow
of water at an appropriate time. The country lacks the capacity
for such works at present. Such studies have so far been
prepared only on the initiative of foreigners. So the question
of follow-up and detailed examination and control are beyond our
reach. In this sense, the first condition for the constriction
of Arun III is to develop our own capability.
9. The present cost estimate for the project is only for the first
phase. It includes the dam, one tunnel, a power house with the
capacity of 201 MW, the transmission line up to Duhabi and the
access road. There is still no idea about financing the second
phase of the project. There is a lesser possibility of acquiring
a soft loan for the second phase of the project. Several donors
are talking about the completion of the second phase of the
construction only by commercial loans. It is also said that the
second phase of the project is not attractive for such loans.
If the second phase of the project can not be completed for any
reasons, the rushed construction of the first phase of the
project will only mean the destruction of the landscape of the
Similarly, the double circuit 220 kilovolt transmission line up
to Duhabi is not sufficient. Such transmission lines are
required up to the east and west of Duhabi. The necessary
expenditure for this purpose is still unaccounted for. On the
other hand, the international financial institutions like the
World Bank are to make their final decisions in March 1994 in
such a unclear state of things while other efforts are underway
to conclude an agreement with international contractors forcing
the country towards an unbearable commitment.
10. At the moment, Nepal has foreign loans of US$ 1,800,000,000.
Arun-III will add 540 million more on this amount. If we
estimate the loans to be acquired for other projects by the year
2000 the total foreign debt of Nepal will reach US$
24,00,000,000 easily. Even if the whole revenue of 300 million
a year is used for debt services, the country can only be free
of debt after eight years only. By the year 2000, the per
capita national debt burden will be 36,000 rupees which includes
every Nepali, those enjoying electricity and those deprived of
it. At that time, Nepal is certain to be ahead of Brazil in
terms of hydroelectric resources and the highest per capita
level of foreign debt. Is it proper to add foreign debt in the
name of development? It is a matter of grave concerns to all
1. The country should not make a hasty decision on Arun-III which
requires a big amount of investment. The final decision should
be made after a national debate. We appeal to all concerned
groups to expose the scheme of making the country committed to
such an high sounding project, which if implemented in its
present form, is going to result in unforeseen economic, social
and developmental consequences.
2. We appeal to the Honorable Members of the Parliament, the
political parties and all other people concerned to initiate a
wide debate on this issue in the forthcoming session of the
3. All the information regarding the different aspects of the
Project should be made public by the government without further
delay and discussion should start at national and local levels
(Sankhuwasabha, Bhojpur and Dhankuta districts) immediately by
involving the local bodies. A national consensus can be made
only after such debate with effective public participation.
4. A decision has to be made regarding regional and national level
benefits from the Project. Such concerns and benefits should
not be imposed either from above or from foreign countries.
Programs should be formulated and developed immediately for
local benefits and infrastructure development before the
inception of the Project. It is important for the people of
Arun valley to know by what mechanisms they can be involved in
the decision-making process. It is also important for them to
know what developmental benefits and necessary infrastructures
are they entitled to and how?
5. Arun-III is an attractive Project from the technical point of
view. So necessary preparations like road construction, local
development and the search for international understanding on
financial resources and other necessary studies should be
undertaken before implementing it.
"LET'S BRING ARUN-III PROJECT TO A NATIONAL DEBATE AND SAVE THE COUNTRY FROM COMMISION AGENTS AND CORRUPTION."
SOME BITTER FACTS ABOUT ARUN III
The average cost for 1 kilowatt of hydroelectricity is US$ 2,000.
In the case of Arun III, the cost is about US$ 4,000 and it is US$
1,500 in India and China.
According to the estimated cost of Arun-III, 10 million Nepali
rupees shall be spent every day for 10 years.
In general, there is a 10 per cent loss of electricity produced in
its transmission. In Nepal, the loss of transmission and leakage-
amount to 30 per cent.
It is generally assumed that in the international aid business, the
commission cost in different ways can be up to 15 per cent. In
case of Arun-III, the Commission cost of 10 per cent of the
official cost estimates amounts to 3,800 million Nepali rupees. If
the decision-makers are purchased at the cost of 10 million rupees
each, it can purchase 380 decision-makers of this country.
The proposed 117 kilometer road for Arun-III will be the costliest
road in Nepal (50 million rupees per kilometer).
HYDROELECTRICITY IN NEPAL (1993)
Nepal is considered to be rich in water resources. The waters of
our rivers which flow from the altitude of the Himalayas to the
Terai (lowlands) which is slightly higher than the sea level. The
total hydroelectric potential of Nepal is 83,000 MW. The
hydroelectric potential which is technically and economically
feasible is put at 24 to 42,000 megawatts.
The existing installed hydroelectric capacity in the country
(including small, big, government and individual plants) is about 250 megawatts.
Hydroelectric Projects Already Constructed:
Name District Capacity Production Year
Pharping Kathmandu 500 KW 1911
Sundarijal Kathmandu 640 KW 1936
Panouti Kavrepalanchowk 2,400 KW 1965
Pokhara Kaski 1,020 KW 1967
Trishuli Nuwakot 21,000 KW 1972
Sunkoshi Sindhupalchowk 10,050 KW 1973 Tinau Rupandehi 1,020 KW 1974 Gandak Nawalparashi 15,000 KW 1979 Kulekhani-1 Makawanpur 60,000 KW 1982 Devighat Dhading 14,100 KW 1983 Seti Kaski 1,500 KW -
Kulekhani-2 Makawanpur32,000 KW 1986
Marsyandi Tanahu 69,000 KW 1990
Andhikhola Syangja 5,100 KW 1991
Tatopani Myadi 1,000 KW 1992
Hydroelectric Projects Under Construction:
Name District Capacity Production Goal
Jhrimrook Pyuthhan 12,000 KW 1994 June
Hydroelectric Projects of which Detailed Studies are Complete:
Name District Capacity
Khimpti-1 Ramechhap 60,000 KW
Kaligandaki -A Syangja
140,000 KW 1999
Arun-III (1st phase) Sankhuwasabha
201,000 KW 2002
Arun-III (2nd phase) Sankhuwasabha
201,000 KW 2005
The total capacity of national grid is 280 megawatts
(hydroelectricity and electricity produced by diesel plants and Nepal Electricity Authority supplies electricity to about 300,000 families from this capacity. A total of only 9 per cent of the people of Nepal are benefitted by electricity.
NGO PRESENTATION AT THE WORLD BANK CONSULTATION
June 28, 1993
A. ISSUES REGARDING ACCESS TO INFORMATION AND PUBLIC
PARTICIPATION ON ARUN III
Presented by Gopal Siwakoti, Member, Arun Concerned Group
Executive Director, INHURED International
First of all, we would like to thank the World Bank for
inviting NGOs concerned with the proposed Arun III Hydroelectric
Project in Nepal to attend this consultation and to present issues
of local and national concern
pertaining to long term repercussions of the proposed Arun III
project. However, we are seriously concerned about the utility and
usefulness of this meeting, particularly on the following matters:
- Is the Bank prepared to review the project negotiation process
and modality before final agreement, and before the submission of
the Project before the Board on July 26? If not, why is this
consultation being held at the final hour of negotiations?
- We understand that the scope of this consultation is limited
to issues directly related to the World Bank, and is not intended
to address domestic issues and concerns. If this is true, we do
not understand the purpose of inviting Nepali government
representatives to participate in this consultation.
We welcome the opportunity to discuss the broader international and
legal issues raised by the Arun III project proposal.
Unfortunately, we regret that we may have had to travel here to
Washington to hear arguments from the representatives of the Nepali
government, a government which totally ignored and undermined all
efforts to promote this sort of discussion of the Arun III project
- We are concerned that the value of this consultation will be
directly compromised if the situation between the Nepali NGOs and
their government representatives becomes confrontational. We are
equally concerned that this consultation be respected with regard
to the World Bank's decision making for the Arun III project: we
anticipate that the final report of this consultation will be
publicly released and used during future negotiations and also
submitted to the Board of Executive Directors.
Keeping in mind the above concerns, we would like to highlight
a few points the Arun Concerned Group has raised with respect to
the World Bank policies of information disclosure and requirements
for public participation and beneficiary consultations.
Access to Information
The World Bank has failed to adequately inform the Nepali
people, and Nepali NGOs, (e.g. Arun Concerned Group, INHURED
International, Alliance for Energy, Rural Reconstruction Nepal)
with regards to the Arun III project. The World Bank office in
Kathmandu and the Nepali Government consistently failed to provide
any information or documentation to groups who issued written
requests for basic project documents. Even the Project Information
Document for Arun III which is easily available here in Washington
was not offered. Given that no information was produced on
request, it goes without saying that the local people were not
informed of the realities of the Arun III project. The Nepali
Government has, however, mounted a campaign of misinformation
regarding the alleged benefits that local people will receive from
the Arun III project. The Government of Nepal did not promptly
make available in local languages a project summary. The only
material initially provided in the local language was a leaflet
explaining the procedure for receiving compensation for lands
required by the Arun III project.
In our understanding that the World Bank's new information
policy and the EA policy requires meaningful "access to
information". This would imply more than simply informing the
Nepali public that Arun III will be constructed. Meaningful
disclosure of project details is understood as an invitation to
participation, a mandate for public knowledge, critical discussion,
and finally--if the project is a good one--public support. When
"information policies" act to exclude public participation from project formulation, designing, decision-making, and implementation, the legitimating benefits of democratic participation through informed decision making are invariably lost. In these unfortunate situations, "access to information" only notifies the public of the imposition of projects through the government channels which lack democratic accountability and procedural transparency.
After the local groups were denied basic information by the
Nepali government, the groups filed public interest litigation in
the Supreme Court of Nepal demanding the disclosure of all
information related to the Arun III project. This culminated in a
legal review of the Arun III project and the donor
conditionalities. The Court has decided that all information and
conditionalities relating to Arun III are subject to the Court's
extra-ordinary jurisdiction and review, as specified by Article 16
of the new Constitution of Nepal. The Supreme Court has ordered
the Nepal Electricity Authority, and concerned ministries to
disclose all information on the Arun III Project to the petitioners
and the public. Nonetheless, the Government has repeatedly ignored
provisions for the release of basic documents on Arun III: e.g. the
Memorandum of Understanding of October 19, 1993. Since further
litigation is to be filed very soon to address this violation, any
acts which the Government of Nepal may be involved with may soon be
declared unconstitutional and in violation of the Supreme Court
judgment. It should be understood by the World Bank that the
Nepali government must abide by the mandate of the Nepali people,
particularly as stated by the Constitution and the judgments of
the Supreme Court. Ultimately, these mandates of national
sovereignty supersede illegal agreements with outside agents. In
this situation, the World Bank must pay full respect the Nepali
Constitution and decisions of the Nepali Supreme Court. It is also
important to note that the government has lost in all public
interest litigation in recent years, including Arun III and the
World Bank must not contravene decisions of Nepalese courts.
There is some confusion about the role of the democratically
elected Nepali Parliament. So far, the Parliament has never been
provided any information about Arun III by the government other
than general statements by the ministers. A report on Arun III is
expected to be submitted by the Opposition Party in the upcoming
session of the Parliament starting from next week. A report and
findings of a Public Commission on Arun III is also expected before
the vote on Arun III on July 26. If the Bank approves the project
on July 26th, this will jeopardize the internal negotiations,
voting and democratic processes and will lead to mistrust of the
Bank and donors by political parties and the public in Nepal.
It is useless to talk about public participation since there
is nothing to "participate" as a result of the absence of relevant
information, particularly in local languages. The government has
never genuinely held any public hearings or distributed information
about Arun III. The series of public meetings that were held in
different parts of the Arun Valley and other areas were nothing but
distribution of a leaflet telling people about procedures for
compensation. No important issues were raised or debated about the
Project itself. Some NGOs were invited to attend, but were
prohibited from raising any issues other than compensation, and in
some cases they were systematically threatened as a result of their
activities in encouraging local people to participate in debate on
issues of local and national concern relating to Arun III.
Furthermore, creation of so called pro-Arun groups only undermined
the image and sincerity of the government and donors.
It is difficult for people to understand information
distributed by government to local NGOs and the people in a so
called consultation with the local NGOs and the people in the Arun
Valley in preparing the Regional Action Plan. Can the government or
the Bank provide any information about what were the procedures and
methods of such consultations and list of NGOs that were part of it
? If so, why did the government or the Bank did not bother to invite the Arun Concerned Group or the Alliance for Energy. Involvement of a few vested interest group or individuals without opportunity for broader participation can only be regarded as a manipulation to legitimize the Arun III Project.
Before there are further negotiations between the World Bank
and the Nepali government and before Bank management sends the
Arun III project to the Board of Executive Directors, we request
the World Bank to ensure that the following has taken place:
1. Provide all basic project documents to NGOs and the public,
including an update of recent negotiations with the Nepali
government officials and new conditionalities, if any.
2. Ensure that Bank actions in relation to the project do not
undermine democratic processes inside Nepal, including respecting
the recent Nepalese Supreme Court decisions.
3. Comprehensively answer all questions being raised about Arun
III at local, national and international levels.
4. Ensure that the project is in compliance with all World Bank
including energy, information disclosure, resettlement, and
5. Ensure that alternatives to the project have been adequately
B. ARUN III AND ALTERNATIVES OF ENERGY DEVELOPMENT
Presented by Bikash Pandey, Alliance for Energy &
Intermediate Technology Development Group, UK
World Bank's Plan B and Sectoral Issues
The Bank's Plan B
The debate over the relative merits of Arun and the alternatives
has been going on for over a year and the Bank has had an analysis
of 'Plan B' since July 1993 (see footnote to table 7.9 in the
recent Argonne Laboratories report). NGOs have, however, only seen
any relevant documents in the last two weeks and have not been
given sufficient time for detailed comment.
Nevertheless, it is clear that the results of the comparison of
plans A and B are inconclusive. The 3-4% difference in the two
models is easily within the margin of error of the assumptions. In
April of this year, ITDG( Intermediate Technology Development
Group) presented its own analysis, suggesting that all of the
small hydro schemes for which it could gather firm date were very
significantly cheaper than Arun in terms of the costs of generated
power. As yet the Bank has made no response at all to that paper.
The Bank's examination of plan B appears to make an arbitrary
choice of six projects from a range of over 20 possibilities. No
justification of the selection has been presented. In addition, the
Bank claims that the schemes in plan A and plan b cannot be
directly compared because the plan B schem
es have not been studied to the same extent. A proposal to study
these schemes has been with the Bank since July 1993, yet it has
taken no action. In order to make a clear comparison of plans A and
B, such studies must be carried out before Arun is presented to the
Board as the least cost option.
Beyond Least Cost
Given that the results of the plan A/B comparison were
inconclusive, it is even more imperative that the Bank looks at the
wider developmental parameters which are not considered by a least
The key issues in the context of this particular project are:
* Capability building. The adoption of such a large scheme as Arun
when indigenous institutions are weak does nobody any favors.
Adding local man hours to such a project is not 'institution
building'. The need is for planned development of whole
institutions around smaller schemes so that the country can
implement complete schemes in the future.
* Geographical balance of hydropower development. Hydropower
investment and the associated benefits need to be distributed more
equitably across the country.
* Risk associated with a single large scheme. Seismic risks ,
glacial lake outburst floods, etc are no specific to any particular
project but larger schemes (particularly if there are several in a
singly valley) make the country's power supply unduly susceptible
to these risks. Putting all of the concessionary financing
available to the country into one large scheme designed to come on
line in eight years time puts the country at risk in terms of
unscheduled delays and cost overruns.
Additionally, there are unsettled issues which will be critical to
the success of the Arun project - in particular the riparian issue
with China and the lack of agreement on further power exports to
We recognize that, in the long rung, larger schemes will be needed
to meet the ever increasing demands on the grid if reasonable
economic growth is to be sustained. There is also no disagreement
that the role of the private sector will be critical. The question
is whether the implementation of Arun at this point in time is
consistent with a long-term vision of sustainable hydropower
The Alliance is arguing for the use of concessionary financing for
sectoral support rather than for individual projects. Money
available from the donor community must be focused on long-term
strengthening of the sector than on producing megawatts in the
The Bank has said that it will 'aggressively pursue the commercialization and corporatization of, and private sector participation in, developing country power sectors'. This privatization will not occur spontaneously and it is most likely that the private sector will first want to invest in smaller schemes (say 10-20MW). There is significant money in the commercial sector with no mechanisms in place to utilize this for hydro sector development. A package of institutional reforms will be needed to spark off this process. banking regulations will need to be changed to allow for longer-term loans; legal institutions will need to be put in place to regulate buy-back; schemes will need to be covered by insurance and guarantees.
There is no money now available in either the government budget or
the donor loans to even study these schemes. To prevent the long-
term recurrence of the 'no-options trap' that has arisen with Arun,
such study work must be initiated now in order that the country has
a wide range of potential hydropower schemes available to it in a
few years time.
Arun should not go before the Board until the following issues have
been adequately discussed:
The issues raised in ITDG's paper on relative costs
The riparian issue with China
Power sales to India
The impact of the project on the people in the Arun valley
C. ARUN III AND ITS ENVIRONMENTAL AND SOCIAL IMPACTS
Ganesh Ghimire, Member, Arun Concerned Group & Coalition Nepal
The Arun Concerned Group is an open platform of NGOs,
professional groups, and individuals concerned with various issues
relating to Arun III hydroelectric project. Some of us, including
myself, are from the Arun Valley, where the project is to be
located. The name of the river, "Arun", means the sun and it
represents life. Like life itself, Arun basin is full of diversity,
both environmentally and culturally. Within 100 km, the Valley
rises from only a few meters above the sea level to about 8500
meters, which gives rise to its unique and rich environment and
The World Bank has recognized the Arun Valley as a bio-
diversity hotspot of global importance. But at the same time,. it
is allowing the intricate and dynamic balance between the natural
processes and human activities to be seriously threatened by the
Arun III project. The area is very remote, and its people are
vulnerable and naive. They live, however, in peace, social
harmony and tranquillity. The Arun III project documents
acknowledge that the project, especially the road, will bring many
negative and irreversible changes to communities and the
environment. These documents further acknowledge that many of the
indirect environmental and social impacts cannot be predicted now.
Given the rapid construction plan and the size of the project, a
vast package of measures has been proposed to mitigate against its
likely direct and immediate impacts. In addition, a Regional
Action Plan (RAP) has been designed to take care of the indirect
and long-term environmental and social impacts.
Despite the impressive amount of paperwork, we do not believe
that the measures proposed will protect the people and the
environment from the negative irreversible changes expected. The
mitigation measures are inadequate, misleading, often unrealistic,
and also exhibit non-compliance to the World Bank's own
requirements. It is irresponsible for the World Bank to allow the
project to proceed until these issues are resolved. I would like
to give you some examples to demonstrate how we have arrived at
1. Some serious environmental and social impacts have been ignored,
underplayed or in some cases, removed from early drafts of project
documents. For example, part of the economic justification for the
project relies on the assumption that the high cost of the project
will be offset by the Upper and Lower Arun schemes, since the
opening up of the Valley facilities developing these schemes. But,
at the same time, the cumulative environmental and social
implications of opening up of the whole Valley are given only a
cursory mention in the Environmental Impact Assessment (EIA) and
other environmental studies. If the benefits of other schemes are
to be accounted for to justify Arun III's high cost, then the much
more serious environmental consequences of building these schemes
also must be taken into consideration at the same time.
2. The rapid pace of construction, particularly of the road, as
much more serious environmental implications than presented in the
project documents. The road route, timing and methods of
construction have been chosen with the single objective of
commissioning the power from Arun III as soon as possible. This
120 km road is planned to be built in only three years. Quite
apart from the huge costs this will incur (including extensive air
support), managing the construction in compliance with the proposed
mitigation measures will be extremely difficult, if not impossible.
To meet the deadline, 6-7 camps of up to 1,500 workers will need to
be set up at 10 km intervals spread all the way up to the Valley.
This will make policing of the contractor's compliance to the
mitigation plan impossible in practice.
3. Preparations for the project have failed to comply with several
World Bank policies. We trust that these violations will be taken
seriously by the Bank. For example:
* There has been a violation of the Bank's Operational Directive 4.30 on Involuntary Resettlement which outlines one of its primary aims as "providing people displayed by a project with the means to improve, or at least restore, their former living standards, earning capacity, and production levels" (art. 2). Quite the opposite is happening. The people in Tumlingtar, for example, are being compensated at rates far below the market price of their land. Similarly, the Bank strongly advocates "land for land" compensation, which is particularly important in the Arun Valley where people are not linked in to the cash economy and where serious problems have already been highlighted from cash compensation measures implemented for the original ridge route alignment. But the Acquisition, Compensation and Rehabilitation Program (ACRP) has not identified a single piece of land for this purpose, despite that fact that much of the compensation has already been paid.
* The Bank's Operational Directive (OD) 4.01 on Environmental
Impact Assessment states that for "major, highly risky, or
contentious projects with serious and multi-dimensional
environmental concerns" (art. 13), an Environmental Advisory Panel
must be engaged in preparation of the EIA. No such panel has been
appointed for the Arun III project, despite its classification as
a Category A project.
* The same directory also expects "the borrower to take the view of
affected groups and local NGOs fully into account in project design
and implementation, and in particular in the preparation of EAs"
(arts. 19, 20). There was no public consultation at all in the preparation of EIA for the Valley route for the road. Neither was there any open consultation on the King Mahendra Trust Study on the Management of Basinwide Environmental Impacts -- consultation was limited to discussion of how best to deal with a fait accompli.
* The Bank's OD 4.01: Environmental Assessment requires that "the
borrower provide relevant information prior to consultations ... in
a timely manner and in a form that is meaningful for, and
accessible to, the groups being consulted" (art. 21). Let alone
the timely manner, most of the relevant information were never
disclosed to interested parties. The Nepali government was found
to be negligent in this respect by the Supreme Court earlier this
* OD 4.20: Indigenous People states that "Successful planning for
indigenous peoples frequently requires long lead times, as well as
arrangements for extended follow-up" (art. 14g). This is one of
the universal truths of development, yet the Bank and the
government's greed for Arun's power has bulldozed this concern
aside. For the RAP to be effective, it must be started way in
advance of the project. Building the road at such high speed will
exacerbate the difficulties in overcoming the already almost
insurmountable challenge of trying to implement such an ambitious
mitigation program alongside project construction, rather than in
advance of it.
I would like to remind you that, at this point, the fate of
the Sardar Sarovar Project (Narmada Dam) in India which had much to
do with the non-compliance with the Bank's own requirements.
4. Many of the mitigation measures for direct and immediate adverse
environmental impacts are not just practical. For example, the
loss of fertile top soil is supposedly to be prevented by taking a
layer off in selected sites prior to the project activity and
storing it until it can be returned to its original place.
Villagers in the Arun Valley would laugh at such an absurd
5. The RAP is supposed to take care of the long-term, indirect and
broader socio-economic, cultural and environmental impacts of the
project in the whole Valley. However, the RAP appears to be little
more than a wonderful shopping list of good intentions. Were it to
be taken seriously, the resources required would stretch way beyond
the budget aside up to ($17 million). But, money is only part of
the problem. Much more concerning is the capability in the
executing agencies to execute such an ambitious and far-reaching
plan. A $14 million grant is sitting in Kathmandu, set aside for
a clean-up program for the capital, yet bureaucratic inertia has
prevented any work from going ahead. If such a straight-forward
project like this cannot be managed, how can we be expected to have
confidence in implementation of the RAP?
We strongly differ with the Bank's assertion that there is
little opposition to the project in Nepal. Within the last six
months alone, opposition to this project from among the people at
large, intellectuals, professionals, politicians, NGOs, and
political parties in Nepal has grown tremendously. And opposition
will rise dramatically once local people start realizing the
impacts on their lives once construction works begins. Unless
satisfactory answers fare given and the issues raised are resolved
with regard to the controversies of the present form of the Arun
III project, more wide-reaching campaigns are bound to take place
in the days to come.
We demand that the Arun III project be delayed until:
1. The appropriate groundwork for the RAP has been done
(including the Kind Mahendra Trust follow-up study for the new road alignment), adequate funding has been secured, and the construction schedule is modified to allow for RAP implementation to proceed in advance of project construction.
2. The construction schedule for the road is extended to maximize
the use of local labor, minimize impact on the environment and
allow work to commence from a single roadbed.
3. The ACRP program is overhauled, so that people are given a
"land for land" option and are offered a fair price for their land.
4. A panel of experts is appointed to evaluate and modify the
APPEAL TO THE EXECUTIVE DIRECTORS OF THE WORLD BANK
July 6, 1994
We would like to thank you for meeting with us during the week of
June 27th, and hearing our concerns about the Arun III hydro-
electric project in Nepal. We hope that through these meetings,
you have come to understand the risks, drawbacks and wider
implications of Board approval of the Arun III project as
currently designed. We remain unconvinced that our concerns are
being taken seriously by the Country Department managing the
project. Because of the many unanswered questions and unresolved
issues relating to the project, we believe it would be
irresponsible of the Bank to allow Arun III to come to the Board
on July 26th. We urge you to delay the Board date until the
following issues have been adequately addressed:
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 at
least 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 by the Nepalese Government,
precluding any meaningful debate.
The library which was established by the Nepal Electric Authority after the Supreme Court Case verdict 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 World 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
C. Long Term Cumulative Environmental Impacts of Arun III and
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
Families whose land will be acquisition 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 of power
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.
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.
Thank you for your attention to these matters.
Bikash Pandey Alex Bush
Alliance for Energy Intermediate Technology
Arjun Karki Gopal Siwakoti
Arun Concerned Group Arun Concerned Group
Rajendra Dahal Ravi Pradan
Alliance for Energy Alliance for Energy
Pitamber B. Chettri Ganesh K. Ghimire
Alliance for Energy Arun Concerned Group
Gopi Upreti Yukio Tanaka
Arun Concerned Group CEPAT
Herman Warth Brent Blackwelder
Urgewald Friends of the earth
Lori Udall Chad Dobson
International Rivers Network Bank Information
cc: Lewis T. Preston, The World Bank
D. Joseph Wood, The World Bank
Ismail Serageldin, The World Bank
Ann Hamilton, The World Bank
APPEAL TO BILATERAL DONORS
(Finl and, France, Germany, Japan, Sweden)
July 7, 1994, Washington, DC
We are writing to you regarding the Arun III Hydroelectric
project in Nepal which is under consideration to receive funding by
the OECF and to follow up on a meeting we had in Washington, D.C.
with Mr. Hasegawa, of OECF on June 5th in which we discussed our
concerns about the project as currently designed.
We believe that alternatives to the project have not been
adequately investigated or publicly debated. We also submit that
the long term cumulative environmental and social impact of
development and road building in this remote and pristine
environment have not been adequately addressed. Moreover, public
information and access to information has been inadequate in the
preparation of the project. Listed is an elaboration of our major
* 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 confessional 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 for the 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
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
* 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 NGO's 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
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
penstock (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
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
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.
The 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
The essential characteristics of this approach are:
* Focusing on schemes that use and enhance the country's
* 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
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.
Thank you for your attention to these urgent matters.
Alliance for Energy
Arun Concerned Group
International Rivers Network
Bank Information Center
Friends of the Earth
MEMORANDUM SUBMITTED TO EXECUTIVE DIRECTORS AND
BILATERAL DONORS ON ARUN III HYDROELECTRIC PROJECT
IN NEPAL REGARDING ACCESS TO INFORMATION AND PARLIAMENTARY
By Gopal Siwakoti, Executive Director, INHURED International
Member, Arun Concerned Group
July 12, 1994
First of all, I would like to express sincere thanks for
meeting the members of the Arun Concerned Group during the past two
weeks and giving careful attention to issues that were raised
regarding the proposed Arun III Hydroelectric Project in Nepal
about access to information and public participation, environmental
and social impacts, alternatives for energy development and the
process of design and implementation of the project. I hope the
following information will assist you further in understanding the
critical issues and debates that are taking place in Nepal with
regards to the merits and demerits of Arun III if it is implemented
in its present form, shape and size as well as its possible adverse
impacts in national economy and development process.
It is our belief and understanding that the postponement of
the Board date of July 26th will provide all of us a unique
opportunity in carefully looking at all aspects of Arun III and
take appropriate policy and implementation measures in future. It
is mainly because 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.
DENIAL OF ACCESS 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.
As response to this letter, NEA provided the following
documents on December 16, 1993:
1. Environmental Assessment and Management, May 1993
2. Environmental Management and Sustainable Development in the
Arun Basin, October 1991
Since the above documents only give a general knowledge
about the environment aspect in the Arun Valley, and not the
details of the project and the environment impact assessment, a
follow-up letter was sent for the availability of complete set of
documents and information on the project, including frequent visits
to NEA officials but without a success. Formal and informal
requests were also made for the cooperation of the World Bank
office in Kathmandu about the availability of basic project
documents and information. It is now confirmed from the World Bank
list of reports that about 13 major environmental assessment-
related documents were denied by the government until very
A public interest litigation was filed 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.
Following the Court's verdict, the petitioners first
demanded the list of documents and information from NEA that only
provided a list of 151 reports in the second week of June in which
many of the project documents and basic information were missing.
It was only after a threat of another litigation and the contempt
of the Court, the government provided a copy of the Memorandum of
Understanding of October 1993 on June 26, 1994 at the outset of the
Consultation with NGOs on June 28, 1994 by the World Bank. It is
found out that NEA has supplied the World Bank a list of 298
reports which was not available in Nepal.
Efforts of seeking project documents and basic information
are still underway and there are strong possibilities of the second
round of legal suits in the Court by challenging the complete or
partial denial of basic project documents by the government without
valid legal justifications. Similar efforts are also being made at
the World Bank office in Washington, DC for the disclosure of
project documents and information according to the list of 298
reports that was made available by the Bank on June 15, 1994.
In conclusion, the process of access to information on the
Arun III project has just began and several obstacles are foreseen
in future despite the Court verdict for their release.
ABSENCE OF PARLIAMENTARY DISCUSSION 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
There are several 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's Commission on Arun III, which is not the case anymore due to recent political developments in the country.
The dissolution of the Parliament this week, 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.
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,
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.
Please do not hesitate to contact for further information or
Contact address in Washington, DC:
c/o Lori Udall
International Rivers Network
1025 Vermont Avenue #300, NW
Washington, DC 20005 USA
Tel: (202) 879-4280
Fax: (202) 879-3186
SUPPORTERS OF PROPOSED WORLD BANK HYDROELECTRIC DAM THREATEN LIVES OF OBJECTORS, NEPALESE GOVERNMENT ENCOURAGES TERRORIST ATTACKS ON CITIZEN ACTIVISTS PRESS RELEASE OF THE FRIENDS OF THE EARTH-USA
July 27, 1994
Kathmandu, Nepal On July 22, at 2 p.m. local time, a mob of sixty burst into the Arun Public Commission's office, which is conducting hearings on the controversial Arun III hydroelectric project. Openly led by the president of the District Development Board of Sankhuwa Sawa, the gang wrestled the Commission members that attacks would escalate if public hearing continue on the Arun III project. The group then announced plans to break into the office of INHURED International (International Institute for Human Rights, Environment and Development) the Secretariat of the Arun Concerned Group, to attack its officials. At that point, they were restrained by police.
The Arun Public Commission was created to conduct independent
hearings on the Arun III project, now being pushed by World Bank
staff but not yet formally approved by the Bank's Board of
Directors. The five-member Commission is headed by the former
Acting Chief Justice of the Supreme Court of Nepal, and two of the
commissioners attacked on July 22 are university teachers. Similar
attacks have also been threatened against members of the Arun
INHURED International was created in 1987 to monitor
democratic efforts in Asia. While its concerns are varied, the
threatened attack seems to be based on its study on of the probable
adverse impacts of the World Bank-funded Arun III project. In
January, INHURED's Executive Director and Program Director received
death threats after filing a petition at the Supreme Court of Nepal
for public disclosure of Arun III information.
Controversy surrounding Arun III has become a major issue in
upcoming Nepalese elections. To consolidate its hold on power, the
government has heavily publicized a "coalition" of non-government
organizations who allegedly support the building of Arun III. This
group is apparently the same set of people that attacked the
Commission's office Friday. While the police have been informed of
these attacks, many are concerned that they will go unchallenged,
due to government support of the project.
Arun III, which depends largely on proposed World Bank
funding, has been challenged on several grounds:
- Environment - Arun III will cause severe corrosion, floods, land slides, deforestation, and loss of biodiversity.
- Economics - The cost of Arun III, $764 million, is as large as the entire annual Nepalese budget. Arun III also has a higher cost per kilowatt-hour than that for any alternative energy projects, demonstrating its lack of cost-effectiveness.
- Culture - Proposed construction of Arun III will depend on foreign, rather than local, labor, bringing a huge influx of outside interests into an isolated area of Nepal.
More information is attached, or contact Brent Blackwelder at
Address: 1025 Vermont Avenue, NW, Third Floor, Washington, DC
20005 Phone (202) 783-7400 Fax: (202) 783-0444 EcoNet ID:
THE HISTORIC DECISION OF THE SUPREME COURT IN FAVOR OF THE RIGHT
TO INFORMATION ON ARUN III HYDROELECTRIC PROJECT
On May 8, 1994 the Supreme Court of Nepal issued an order in favor
of the petitioners and against the defendant: Ministry of Finance,
Ministry of Water Resources, Nepal Electricity Authority and Arun
III hydro-electric project. This came after the series of hearings
on the historic public interest litigation filed by the Executive
Director of INHURED International, Advocate Gopal Siwakoti
'Chintan', and a human rights activist Dr. Rajesh Gautam, demanding the right to information regarding the controversial Arun III hydroelectric project as the dispute comes under article 88 (2) of the Constitution of Nepal which provides for such litigation and the solution of the legal and constitutional disputes regarding the project. According to the decision made by Joint Bench of Justices Mr. Haragovinda Singh Pradhan and Mr. Keshab Prasad Upadhyaya, the defendants should provide all information regarding the Arun III according to the article 16 of the Constitution.
The Supreme Court has made a new and historic interpretation of
legal principles in the context of the lack of necessary laws for
the enforcement of the right to information in Nepal and the
situation in which several provisions of other existing laws are
yet to come into force. It has decided that up to the time when
appropriate laws are not enacted, the government agencies should
provide information to the Nepali citizens by applying the
following guidelines and procedures:
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 regarding the Arun III hydroelectric
project and any other subject of public interest from the
government agencies in the future after the fulfillment of the
procedures as mentioned above. In addition, the decision of the
Supreme Court has also outlined the structure of future law on the
right to information.
So far, application has been made to the government authorities according to the Court decision, But, unfortunately, they have still been denying the disclosure of many information relating to Arun III. NGOs and activists are now, preparing for another round of legal battles in the Supreme Court on the grounds of contempt of Court and the further denial of the right to information as provided for by the Court decision.
ON ARUN III CAMPAIGN
A. LETTER OF GLOBE TO THE WORLD BANK
Global Legislators Organization for a Balanced Environment
March, 8, 1994 Mr. Lewis T. Preston President The World Bank 1818 H Street, NW Washington, DC 20433
Dear Mr. Preston:
We write to express our concern over the proposed Arun III
hydroelectric dam project on the Arun River in eastern Nepal. It is
our understanding that this project is scheduled to come before
the Board for a vote in April.
We recognize that detailed environmental impact statements have
been prepared for the Arun project and that the Government of Nepal
supports the building of this hydroelectric facility. While we are
sensitive to the Government of Nepal's desire to meet the energy
needs of its country, we are concerned that the Arun hydroelectric
dam and its accompanying access road and associated transmission
lines, as currently planned, may pose serious economic,
environmental and social impacts that have not been adequately
Arun III would be one of the most expensive hydro power projects in
the world. As you know, the cost of the project at present is
estimated at $764 million, an amount greater than Nepal's national
budget. Furthermore, there are reasons to believe that, although
lengthy, the environmental impact statements are incomplete.
Finally, we are concerned that the assessments have not adequately
taken into account the adverse social impacts of opening up this
isolated area of the Arun valley by constructing an access road and
bringing thousands of people to the remote project site.
We urge the Bank to give serious consideration to alternatives put
forth by Nepalese NGOs that utilize the extensive small-scale and
mini-hydro potential of Nepal. Such an approach would be
considerably less expensive and result in a lower debt burden for
the Nepalese, be less detrimental to the environment and probably
would not require the construction of new roads into this pristine
area, and would be decentralized and smaller in scale than the Arun
III proposal, Finally, this type of approach would make greater use
of local materials and expertise, and could involve a greater
number of Nepalese in all levels of the project decision-making and
implementation than the current plan.
We strongly encourage the World Bank to carefully reexamine the
economic, environmental, and social implications of the Arun III
project and to give the same level of consideration to alternative
approaches. We also ask the Bank to evaluate whether Arun III is
the "least-cost" approach to meeting the energy needs of Nepal, a
critical criterion of the World Bank's energy policy.
We appreciate your consideration of this important issue and look
forward to your response.
Takashi Kosugi, President GLOBE International
Akiko Domoto, President, GLOBE Japan
John Karry, President, GLOBE USA
Nikolay Vorontsov, President, GLOBE Russia
John Edward Porter, Vice-Pres, GLOBE USA
Hormo Muntingh, President, GLOBE EC
Karl-Heinz Florenz, Member, GLOBE EC
Carlos Pimenta, Vice-Pres., GLOBE EC
Kaneshige Wakamatsu, Member, GLOBE Japan
Eva Quistdorp, Member, GLOBE EC
Tamako Nakanishi, Member, GLOBE Japan
Kiyoko Ono, Member, GLOBE Japan
Anatoly Shabad, Member, GLOBE Russia
Noboru Usami, Member, GLOBE Japan
Vitaly Sevatyanov, Member, GLOBE Russia
Constance Morella, Member, GLOBE USA
Jolene Unsoeld, Member, GLOBE USA
(printed from the original text)
Ginza Form 21 Bldg., 7th Floor
8-13-4 Ginza, Chuo-ku,
Tokyo, J-100 Japan
B. INTERNA TIONAL NON-GOVERNMENTAL ORGANIZATIONS
As the debate on the status of the Arun III hydro-
electric project is intensifying in Nepal, global environmental
groups have been expressing their critical concerns to the World
Bank, other donors and the Nepali government authorities. Such
major concerns such as adverse impacts on society, culture and
environment, cost and benefit, debt burden, donors' inappropriate
conditionalities, heavy use of foreign manpower and absence of
local human resources, lack of effective participation of the local
people in decision-making and implementation. Some of these
1. Both Ends (The Netherlands) 2. Friends of the Earth (USA) 3. Global Legislators Organization for a Balanced Environment
(Japan) 4. International River Network (USA) 5. Netherlands Committee for IUCN (The Netherlands) 6. United States Environmental Protection Agency (USA) 7. Women's International League for Peace and Freedom
(Switzerland) 8. Bank Information Centre, USA
C. US COGRESSMEN/WOMEN
(list to be confirmed)
Mr. Lewis Preston President The World Bank 1818 H St. NW Washington, DC 20433
Dear Mr. Preston:
We would like to express our strong opposition to the pending
application for financing by the World Bank and other agencies of
the Arun III Dam in Nepal. The cost of this massive and
destructive project - $764 million - equals the entire annual
budget for the country. The World Bank has failed to give serious
consideration to smaller scale alternative energy investments.
The dam could spell cultural and environmental disaster to an
isolated biologically high, and ethically diverse mountain valley
in Nepal with high quality forests. Construction will involve a
major influx of outside building interests with sparse local
participation. The World Bank explicitly admits that the project
"will bring rapid and irreversible changes to the area.'
We are opposed to this kind of uneconomic massive, destructive
engineering investment. We urge the World Bank to consider small
and medium scale hydro. This project comes at a time when
Commissioner Board of the U.S.. Bureau of Reclamation speaking at
he International Commission on Irrigation and Drainage says:
"Within the last two decades, we have come to realize there are many alternatives to solving water resources problems in the U.S. that do not involve construction. Non-structural alternatives are often less costly to implement and have fewer environmental costs. For example, we have seen the emergence of more sophisticated resource management approaches in both energy and water."
The Alliance for Energy has put forward an alternative approach to
the Arun hydroelectric project which focuses on developing Nepal's
existing electric capacity, both in public and private sectors.
The plan promotes local management and control of projects while
providing electricity to local and rural people.
We urge you to support sustainable energy development and oppose
the uneconomic Arun III Dam which will cause significant social and
NEPAL GOVERNMENT'S POSITION ON ARUN III
(Published is a text of a letter sent by the Secretary of
Ministry of Water Resources, Surya Nath Upadhyay, to a U.S.
Government official on June 24 that reflects existing position of
the Nepali government on Arun III and views about the public
"At the very outset, let me note that the project has not only
been approved by the democratically elected government, but also
enjoys support in the Parliament. This support was obvious during
the almost day long debate on this project in the both Houses of
Parliament held in the late march/early April 1994, as well as
reflected in the letter dated April 4, 1994 written to the
President of the World Bank by the members of the Parliament
including the opposition members and various local bodies of the
region where the project is located.
"Arun III HEP is perhaps a unique development in the world for
which a basin wide environmental study was conducted to identify
various programs/activities to be implemented to ensure that the
construction of the project will lead to the sustainable
development of the whole valley. In the process of the study, local
people were extensively consulted and recommendations were made on
the basis of these consultations. The study was carried out by
Nepal's most prestigious non-government organization (NGO), Kind
Mahendra Trust of Nature Conservation (KMTNC). While preparing the
Acquisition, Compensation and Rehabilitation Plan (ACRP), the
people to be affected by the project were interviewed using
"Public consultation has been considered as an ongoing process by the project. As of today, the project officials have either organized or participated in 23 public meetings which took various forms and took place in various places within the project area, district headquarters and the capital - Kathmandu. The proceedings from these meetings have either been video or audio tapes and are available to any interested person. In order to facilitate dissemination of information about the project, a documentation center/library has been opened where all interested parties can read, copy and discuss any aspect of the project.
"The project is the most widely debated government undertaking
and the government is committed to maintain utmost transparency in
the execution of the project. This commitment is guaranteed by
the constitutional obligation, whereby the people's right to
information is ensured.
"Despite all these efforts, unfortunately, the are a few NGOs
and INGOs, who support them, that are actively involved against the
project. While we in the government respect divergent opinion of
the people and right to form his or her opinion, we regret to state
that these NGOs/INGOs never directly approached us either to
discuss or to ask information about the project. On the contrary,
we have requested them to communicate with us, but without success.
We wonder whether these INGOs have ever been to the project sites
or tried to feel the aspiration of the people of that area.
"We in the government believe that Arun III HEP is one single
development which will change the face of the nation by generating
electricity so much needed for agricultural, industrial and tourism
development in the country.
"Before concluding, I must point out that Nepal has only three
resources - hydro, human and tourism. Exploiting huge hydropower
potentiality that Nepal is bestowed with is vitally important for
the overall economic development of the country, and Arun III HEP
is going to be an important landmark towards this."
MAJOR HYDROPROJECTS IDENTIFIED BY NEPALI GOVERNMENT (1992)
1 Panauti 2,400 K.W.
2 Trishuli 21,000 K.W.
3 Sunkoshi 10,000 K.W.
4 Gandak 15,000 K.W.
5 Kulekhani-1 60,000 K.W.
6 Devighat 14,000 K.W.
7 Kulekhani-2 32,000 K.W.
8 Marsyangi 69,000 K.W.
9 Andhi Khola 5,100 K.W.
10 Jhimruk Piuthan 12,500 K.W.
PLANNED AND PROPOSED
11 Budhi Gandaki 6,00,000 K.W.
12 Kaligandaki No. 2 6,60,000 K.W.
13 Kankai (Multipurpose) 60,000 K.W.
14 Sapta Gandaki 2,25,000 K.W.
15 Naumure 2,00,000 K.W.
16 Lower Arun 3,00,000 K.W.
17 Seti (West) 2,85,000 K.W.
18 Arun-3 4,02,000 K.W.
19 Bagmati 1,40-2,10,00 K.W.
20 Kali Gandaki A 1,00,000 K.W.
21 Tama Koshi No. 3 1,23,000 K.W.
22 Bhote Koshi No. 2 69,000 K.W.
23 Andhi Khola No. 1 (Reservoir) 1,80,000 K.W.
24 Upper Arun 3,80,000 K.W.
25 Khimti Khola 49,000 K.W.
26 Seti Gandaki 3,20,000 K.W.
27 Karnali (Chisapani) 1,08,00,000 K.W.
28 Upper Karnali 2,40,000 K.W.
29 Pancheshwar (Mahakali0 10,00,000 K.W.
30 Puwa Khola 5,000
Note: In the above list, Arun III is in the eighth priority of the
government until August 1992 out of 20 such planned and proposed
projects. (Source: Hydroelectric Projects, Identified for Private
Investmetns (1 MW to 50 MW Capacity), HMG, Ministry of Water
Resources, Water and Energy Commission Secretariat, Kathmandu,
WHAT PRIME MINISTER KOIRALA SAID ABOUT WORLD BANK TWO YEARS AGO
"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 fee 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.
Please, try to get a copy of the
"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
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
Edited by Janet Bruin, 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
WILPF, C.P. 28, CH 1211, Geneva 20, Switzerland
tel: (41-22) 733-6175 , fax: (41-22) 740-1063
Laxman Sedhai, 2705 S. Fern St. #12, Arlington, VA 22202, USA
tel: (703) 683-7501
Purushottam Subedi, Nepal Human Rights Committee-USA
%% END OF "THE NEPAL DIGEST". %%
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