ENVIRONMENT: World Bank chief to refuse Nepali request for Arun dam

By Pratap Chatterjee Reprint | | Print |

Pratap Chatterjee

WASHINGTON, Oct 19 1995 (IPS) - The World Bank expects to refuse a second request by the Nepali government to lend money for a hydro- electric dam project in a remote part of the Himalayan mountains.

The proposed 764-million-dollar, 201-megawatt Arun III project has been the subject of much debate at the Bank since two Nepalese citizens appealed to the Bank’s newly-formed inspection panel last year to investigate ALLEGED violations of environmental guidelines in the project design.

Last week Ram Sharan Mahat, Nepal’s new finance minister, met with Bank President James Wolfensohn here at the annual meetings of the Bank and the International Monetary Fund met with little success in his effort to revive the scheme.

Two months ago, Wolfensohn telephoned the Nepali prime minister to tell him of his personal decision to cancel a proposed 175-million-dollar loan for the project just before the nine-month- old government of the country was dissolved. Wolfensohn said the project was too ambitious for Nepal’s small economy.

“There is no reconsideration of the Arun III project. We have told the government we are happy to look at the whole power sector in Nepal. I’ve told them that I am personally committed to help with their power needs,” Wolfensohn told journalists at a press conference.

“I am aware that this government came into power, at least in part, on an Arun plank. If I had been elected on that plank I would come to Washington and I would say, I want to have the dam reconsidered.

“I have not responded (to the request), other than to say that I’m going to look at the whole power sector and I believe my decision on Arun was correct,” he added.

Currently only 12 percent of Nepal’s 20 million people have electricity. The kingdom can generate 241 megawatts, less than its peak need of 244 megawatts. The shortfall is met through regular power cuts which are expected to increase as Nepal’s energy consumption is growing by 10 percent a year.

The Arun dam project was condemned by activists because of the possible environmental impact of a proposed 122-kilometre access road that was to be built in the valley to the dam site.

Anti-dam activists say the valley has one of the few pristine forests left in the Himalayas. It is inhabited by 450,000 people from 10 indigenous groups whose traditional ways of life were at risk due to the expected influx of outsiders via the road.

Just over two years ago, the Bank came to a similar agreement with the government of India to pull out of the controversial Sardar Sarovar dam on the Narmada river.

The Narmada decision was made after an independent investigation led by Bradford Morse, the former head of the United Nations Development Programme (UNDP), found that the planning as well as the construction of the dam violated the Bank’s own environmental and resettlement guidelines.

The Arun project’s cancellation came just before the publication of a similar report by the Bank’s inspection panel. Its 11-month investigation, completed in June concluded that the Bank “failed to observe in substance the policy requirements for…resettlement,” according to internal documents.

Richard Bissell and Alvaro Umana, two of the three panel members, travelled to Nepal to meet with local people in the towns of Amrang, Num, Chhyangkuti, Khandbari, Tumlingtar and Chewabesi.

The people of Tumlingtar told the inspectors their pleas for compensation for land seized by the government had been ignored. Jobs that should have been provided for affected families also failed to materialise.

The panel pointed out that the Bank itself had convened earlier this year a panel of experts to look into the risks to the dam posed by glacial lake outbursts. That was six months after the complaint was first submitted. Activists argued this problem should have been covered in the original design. The experts concluded the risks were real.

The panel also found that the Bank had yet to implement a “regional environmental action plan” which Bank staff said was “integral” to preparations for the project.

ENVIRONMENT: World Bank chief to refuse Nepali request for Arun dam

By Pratap Chatterjee Reprint | | Print |

Pratap Chatterjee

WASHINGTON, Oct 19 1995 (IPS) - The World Bank expects to refuse a second request by the Nepali government to lend money for a hydro- electric dam project in a remote part of the Himalayan mountains.
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