Found this article, I was suprised and wanted to share it with you guys. ----------------------------------------------------------------------------------------- - http://www.newkerala.com/news2.php?action=fullnews&id=22072 Nepal reels under power crisis as free supply goes waste By Sudeshna Sarkar, Kathmandu: Much of the 70 million units of electricity supplied free to Nepal by India is going unutilised even as the Himalayan kingdom reels under an acute power crisis with 35-hour per week outages and the situation threatening to get worse in the summer. With summer setting in early this year due to the absence of rainfall in winter and rivers that produce hydropower drying up, Nepal has been struggling to generate the 8.2 million units of electricity needed to meet the current demand. The state-run Nepal Electricity Authority (NEA) has been able to generate only 6.9 million units, the deficit triggering a five-hour power outage daily from Saturday. According to Harish Chandra Shah, director of NEA, the outage could go up to 12 hours a day until the monsoon sets in. The irony is that according to an agreement signed between India and Nepal, the former is committed to providing Nepal 70 million units free each year - and yet the bounty is not utilised. In 1996, the two neighbours signed the Mahakali Treaty, resulting in the free power agreement. India's National Hydroelectric Power Corporation runs a power station on the Mahakali river in Tanakpur, which required building of a bandh on Nepal's side of the border. Since the structure caused land in western Nepal to be flooded, India agreed to provide free power as compensation. However, Tanakpur in western Nepal is too remote from the cities that require power - capital Kathmandu in central Nepal and Biratnagar and Birgunj in the south. Lack of infrastructure, bad roads and high transport cost have combined to prevent the utilisation of the free power. A better alternative would have been to use the power to develop India's Uttaranchal state and supplies could have been diverted from the Indian states near Kathmandu. However, pragmatism plays little role in hydropower projects where Nepal and India are concerned. In 2002, both countries had agreed on a joint promotion of a hydel project in the farwest, the Upper Karnali project, which would generate 300-420 MW. Nepal would have got 15 percent of the power free while the rest would have been sold to the Indian states closer to the farwest region. However, the project was scuttled due to a feeling that it was a sell-out to India. Now, though the Nepal government headed by King Gyanendra is showing interest in reviving the project, New Delhi is unwilling to enter into an agreement with a regime whose decisions could be declared void by later governments. Ironically, Nepal, which has one of the largest hydropower potentials in the world, is now negotiating with India's Power Trading Corporation to buy 50 MW on a short-term, short-contract basis to tide it over till the rains arrive. According to a power exchange agreement signed in 1971, the two countries can provide each other up to 150 MW but less than half of that takes place due to bad infrastructure on both sides of the border.