“PMP is a mega storage type hydropower project. But either due to the government's ignorance or indifference, it has nominated an irrigation engineer as CEO for this massive hydel project who is himself ignorant about the issue.”DB Singh Former Director General of the Department of Electricity Development

“Pancheshwar is a multipurpose project that includes  hydropower, irrigation and flood control. As I have served in these  three sectors as the Director General, it would not be fair to question  my ability and experience.Mahendra Bahadur Gurung CEO Pancheshwar Development authority

“PMP is a highly economically viable project which can create a big difference in terms of electricity production, water issues, investment scenario and psychological effect.” Bishal Thapa Vice Chairman of the Energy Development Council

Kathmandu

The Mahakali Treaty between Nepal and India was signed in 1996 and the main highlight of the treaty was to develop the 6,720 MW Pancheshwar Multipurpose Project (PMP).

Though discussed and talked about the many benefits which include hydropower, irrigation, fishery, flood management, et cetera, the project never really budged until 2009.

In 2009, a Joint Committee on Water Resources was formed which was headed by energy secretaries of Nepal and India. Held in Pokhara, that committee agreed to construct a re-regulating dam, Chief Executive Officer (CEO) nomination through open competition and establishment of a project head office in Mahendranagar.

However, it was only in July 2014 with the Indian Prime Minister Narendra Modi's visit to Nepal that the project gathered full steam with commitment to develop the PMP on a 50/50 sharing basis.

To push forward this mega project, both governments decided to establish a eight member Pancheshwar Development Authority (PDA) in November 2014 and with both energy secretaries as co-chairpersons. Of the eight positions, Nepal got to appoint the position of CEO, Legal Executive Director, Environment Executive Director and Administration Executive Director, while India got the post of Acting Chief Officer (ACO), Technical Executive Director, Finance Executive Director and Rehabilitation and Resettlement Executive Director.

Nomination conflict

It was decided to complete filling these executive member positions by September 2014 but due to conflict of interest in the nomination process it has been delayed by almost a year. While Nepal was lingering in the appointment process, India, as per the Memorandum of Understanding (MoU) initiated a detailed project report (DPR) by WAPCOS.

Though the CEO was to be appointed through free and fair competition, Energy Minister Radha Gyawali appointed Mahendra Bahadur Gurung as the CEO on June 5. Likewise, Dilip Kumar Sadaula was appointed Environment Executive Director, Rudra Sitaula as Legal Executive Director and Babu Ram Adhikari as Administration Executive Director.

On the other hand, the Indian side nominated executive directors through free competition.

“Although Nepal has appointed the CEO, it could lead to a loss for the country,” said DB Singh, Former Director General of the Department of Electricity Development. Singh who is also a Former Project Director of Pancheshwar Project, further said, “PMP is a mega storage type hydropower project.

But either due to the government's ignorance or indifference, it has nominated an irrigation engineer as CEO for this massive hydel project who is himself ignorant about the issue.” Comparing the appointees from the Indian side, he informed that both ACO and Technical Executive Director are experienced hydro engineers with a proven track record.

To lead a multilateral mega project experience and technical know how is a must. Singh said, “For a football match if you send basket ball players what can you expect? This is what the government has done by choosing an inexperienced CEO for such a major hydro project.” He further pointed out that due to lack of political will and vision among team players even in 1999 that led to the Nepal-Indo Joint Project Office collapse in 2002 without finalising the DPR.

“I suspect the PDA will face the same fate as again the government has nominated the wrong person,” he opined.

On this, CEO of PDA Mahendra Bahadur Gurung said, “Pancheshwar is a multipurpose project that includes hydropower, irrigation and flood control. As I have served in these three sectors as the director general, it would not be fair to question my ability and experience.”

He further said, “I was on a decision making role in previous posts which made me more competent for this post and I believe I will run this project smoothly.”

Project prospects

PMP is a bi-national storage type hydropower project to be developed on the Mahakali River bordering Nepal and India. The 6,720 MW project will produce an annual average energy of 12.32 billion units and a live storage of 6.56 billion cubic metre of fresh water.

There will be equal sized underground power houses of 3,240 MW constructed on each side of the Mahakali river in India and Nepal. Moreover, the project will also offer benefits of regulated water for irrigation in Nepal and India and control flooding.

Singh informed that the project cost is determined at Rs 500 billion as per the DPR conducted by the Pancheshwar Project in 2006-07.

According to him, Nepal can get benefits of Rs 34.50 billion from electricity, Rs nine billion from fisheries, Rs 5.55 billion from irrigation of 93,000 hectors of agricultural land, Rs 4.42 billion from carbon trading and Rs four billion from other benefits.

“The total of benefits after project construction will be Rs 53.41 billion which should not be decreased by any means in the present context,” he stressed.

However, it is presumed that the project will dislocate 22,765 people on the Nepali side and 60,000 people on the Indian side.

“PMP is a highly economically viable project which can create a big difference in terms of electricity production, water issues, investment scenario and psychological effect,” said Bishal Thapa, Vice Chairman of the Energy Development Council. However, he pointed out, “The project has been talked about since the last two decades but it has not gone smoothly.

For the smooth run of the project, political space and backing for implementation is a must. Both countries political leaders should acknowledge this fact about the benefits and put this project on high priority.”

Stating that the formation of PDA with a full committee is a good sign, Thapa further said, “Formation of the authority is not the end point for development of the project. From past experience, we have realised that those heading the project had no voice.” He stressed that the head of the authority should have the capability to communicate clearly and strategically, be more proactive than passive and reactive.

According to him, Nepal should learn from the past and not repeat the same mistakes.

The project demands strong political will, studying of the situation and tie up with not only the central government of India but also with the state government at the project area.

Crawling ahead

With the appointment of the CEO work for the project head office has started. According to Gurung, they are planning to establish a Corpus Fund of IRs 200 million from each country.

He said, “WAPCOS is working on the DPR and as the executive committee has been formed we will conduct meetings with them and scrutinise technical aspects.”

He said that the DPR will be finalised on November 2015, two months later than the stipulated date.

Optimistic about project implementation, Gurung targets to at least finalise the DPR, procurement of work and laying the foundation in his three year tenure. Citing that it is a dream project of both countries, he said, “Political will is most important to implement the project.”

As per the MOU between Nepal and India, the CEO and Finance Executive Director will not be from the same country. The tenure of each member will be three years with rotation between Nepal and India for the CEO.