The proposal to build Pancheshwar Multi-purpose Project on the Mahakali River in far-western Nepal was floated by Nepal and India almost two decades ago. However, nothing happened for a long time. Things finally started moving forward when Indian Prime Minister Narendra Modi visited Nepal in August 2014. Then in September 2014, the governing body of the Pancheshwar Development Authority, the project implementing body, met for the first time. This led to formal establishment of the PDA. Recently, WAPCOS Ltd, an Indian state-owned company hired to prepare the detailed project report, submitted the final draft of the DPR. Report says Pancheshwar, along with Rupaligad project, can generate around 12 billion units of electricity per year. Rupak D Sharma of The Himalayan Times caught up with PDA CEO Mahendra Gurung to know more about findings of study conducted by WAPCOS.

WAPCOS has just submitted the final draft of detailed project report (DPR) of Pancheshwar Multipurpose Project. How different is it than the previous ones?

Nepal had initially prepared the DPR of Pancheshwar in 1995. Then in 2003, India came up with its own

project report. India had largely prepared the report based on data used in DPR prepared by Nepal. The 1995 DPR had said the installed capacity of the project would be 6,480 megawatts. But the latest report says the installed capacity of

the project would be 4,800 MW. In other words, there has been a downward revision in the project’s installed capacity. This is one of the differences.

Why was the figure revised?

Although the 1995 DPR was said to have been prepared on the basis of studies conducted from 1962 to 1992, not all data were collected from the Mahakali River where the project is being built. It is now known that the report had also used data collected from Karnali Chisapani. Also, research has shown that the country had started keeping records of Mahakali River from 1985 or 1986. So, the 1995 DPR was prepared based on data collected since 1985 or 1986. But when WAPCOS Ltd conducted its study in 2015, it used the previous data and data obtained after 1995 as well. So, this study is more in-depth. During the course of study, WAPCOS found that the level of precipitation, or rainfall, had fallen for five consecutive years from 1995 to 2000, indicating reduction in water level in the river. This is one of the reasons why the installed capacity had to be revised. Another reason for downward revision is the provision in the Mahakali Treaty signed by Nepal and India in 1996, which says five per cent of the water in the river should not be used for electricity generation. This means the latest figure on installed capacity was derived without factoring in power that could have been generated through five per cent of the water in the river. However, in reservoir projects, like Pancheshwar, megawatt alone does not reflect the true picture. This is because electricity generation through reservoir projects depends on when and how the water is used.

Could you please elaborate on what you just said?

What I’m trying to say is reservoir projects give us the option to use all the water at once or use a certain quantity of water multiple times to generate electricity. So, the quantum of energy that we generate per annum is more important than megawatts. And the latest report shows the project can generate almost similar quantum of electricity as estimated in 1995. However, this is just a draft report. Now, governments of both the countries will have to review the findings and lay their suggestions, following which the DPR would be finalised.

WAPCOS has also submitted a report on development of Rupaligad re-regulating dam, isn’t it? What does it say?

Pancheshwar project is expected to release huge quantity of water for certain hours every day when electricity is being generated. If all the water released by the project is allowed to flow downstream, it’ll create havoc in settlements located on river banks. This is why we are building a re-regulating dam. This dam will regulate the flow of water released by Pancheshwar project to support irrigation in Nepal and India. The dam will also control floods. The 1995 DPR prepared by Nepal and the Indian report of 2003 had recommended that Rupaligad dam be built 25 km away from Pancheshwar’s dam site. But the latest report has said this distance is insufficient and has proposed development of Rupaligad dam at a distance of 27.5 km from Pancheshwar dam site. However, the installed capacity of the Rupaligad project has remained unchanged at 240 MW. Another good news is that annual energy generation capacity of this project has been revised upwards to around 1,500 or 1,600 gigawatt-hours (1.5 or 1.6 billion units).

Will these dams be quake resistant, as far-western region is also said to be earthquake prone area?

We had previously conducted geological study in the area where the projects are being developed. Recently, an in-depth seismic study was also conducted. Based on these studies, we have also reviewed the designs of the two dams. These dams will be able to withstand earthquakes of up to 8.5 magnitude.

How many families do you think need to be relocated from the project site?

The area where the project is being developed is mostly covered by hills and does not have many human

settlements. As per the latest data, 22,765 people will have to be relocated in Nepal. This is an indication

that land acquisition will not pose a big problem for us. However, I don’t have exact data on Indian families that will be affected by Pancheshwar and Rupaligad projects. We will have to conduct a detailed study in this regard.

How big will the reservoir be?

The reservoir will stretch 65 km upstream from the Pancheshwar dam site. It can store six billion cubic metres of water.

And how tall will the dam be?

It would be around 315 metres tall. Once the construction of this dam is over, it would be the tallest in the world. However, some experts are against the idea of creation of tall dams. But had India not built Tehri Dam, which is one of the tallest dams in the world, Dhauliganga flood of 2013 would have swept away Haridwar and Rishikesh.

How much do you think would the entire project cost?

As per latest estimates, it would cost INR 300 billion (Rs 480 billion) to build the project. This cost includes construction of both Pancheshwar and Rupaligad projects. This means per MW construction cost of the project hovers around Rs 95 million. So, we can say this project is going to be one of the cheapest projects being developed in the country.

And how much do you think would it cost to generate each unit of electricity from the project?

The electricity production cost hovers around INR five-six (Rs eight to Rs 9.6) per unit. This price is

quite high considering the cost of electricity in India. So, we are scouting for options to reduce the production cost.

What if the energy produced by the project becomes surplus for Nepal. Against that backdrop, can Nepal sell electricity in India?

Mahakali Treaty says a portion of Nepal’s share of energy shall be sold to India. The treaty also says that the quantum of such energy and its price shall be mutually agreed upon by the two parties. So, we have the option of selling electricity to India. Currently, India has shown interest to purchase electricity from us. But it has said Nepal should explicitly say the quantum of energy that it intends to sell at the earliest. This is because India can create its energy policy based on the quantum of electricity that we plan to sell. Also, India has said electricity should be sold at a competitive price. We have delivered this message to the government.

How will Nepal and India share costs to develop the project?

Mahakali Treaty says the project cost will have to be borne by both the countries in proportion to the benefits they reap. However, as of now, we don’t know how much each country has to invest. We’ll discuss this matter in the coming days. What is currently known is that electricity generated by the project will be distributed equally. For this, power houses comprising six turbines with electricity generating capacity of 400 MW each will be built on two banks of the river. The power generated from one bank, which falls in the Nepali territory, will be used by Nepal and the power generated from the other bank, which falls in the Indian territory, will be consumed by India. However, we are yet to determine other benefits that the two countries are likely to reap from the project. Some other benefits of this project are irrigation and flood control. In terms of irrigation, India will benefit the most. This is because India has lots of agricultural land, whereas we don’t have much irrigable land in our territory. This means we will not be able to take maximum benefit from the irrigation project even though Nepal can exercise its prerogative over water use. Latest studies show that even if we supply water to all the agricultural land from Kanchanpur to Kailali through this project, we cannot irrigate more than 100,000 hectares of land. In contrast, India has already said the project will help it to irrigate 1.6 million hectares of land.

Mahakali Treaty had become a political hot potato some two decades ago and had even split one of the largest political parties? Do you think similar differences will surface this time?

Most of the political parties have now become mature. Also, most of the political leaders have been engaged in this project. For instance, the treaty was signed when Sher Bahadur Deuba of Nepali Congress was the prime minister. At that time, KP Sharma Oli of the Communist Party of Nepal-Unified Marxist Leninist had backed the treaty. He is now the country’s prime minister. Lately, it’s the Unified Communist Party of Nepal (Maoist) and its splinter groups that create obstructions for hydro projects. But the concept of the Pancheshwar Development Authority (PDA) had taken a concrete shape during the time when Pushpa Kamal Dahal (Prachanda) was the prime minister. At that time, the management structure of PDA was also created. Then during the time when Madhav Kumar Nepal was prime minister, Terms of Reference of PDA was framed. So, major political leaders are aware of Pancheshwar project. However, if the project hits a major roadblock, locals, who are tired of waiting for implementation of the project, would protest.

So when will the commercial operation of the project begin?

If everything goes smoothly, we’d be able to complete all pre-construction works within three years. During the pre-construction phase, we will divert the flow of water from the river through tunnels. We will be building eight diversion tunnels for the purpose. We will also have to build access roads and suspension bridges to link both the dam sites. Also, hydro-metrological stations have to be renovated or set up. Once these works are complete, it will take another eight to 10 years to build the projects. Within this period, some units (turbines) will come into operation. But at least 10 to 12 years will be required to fully complete the project. During my three-year tenure as CEO, I intend to initiate the work of building the tunnels. It is my wish to see prime ministers of both the countries inaugurate the work.

Lastly, what do you intend to do in 2016?

We will set up our headquarters in Mahendranagar. We will also start building suspension bridges and access road to link project sites. We will also renovate or set up hydro-metrological stations. Besides, we will also finalise administrative and financial by-laws to ensure smooth operation of PDA.