AB Thapa 

AB Thapa 


Several dailies including THE KATHMANDU POST of  January 25, 2008 reported horrifying news that the Ministry of Water Resources has signed a MoU with a GMR team to finalize the deal to allow latter to implement the 300 MW Upper Karnali Project. The MoU to implement the 300 MW Upper Karnali Hydropower  is going to be a suicidal deal.  The Karnali people will be robbed of the great opportunity to benefit from their vast water wealth as a result of the decision to implement the 300 MW Upper Karnali project.   

The proposed 300 MW Upper Karnali project can be implemented only at  the cost of sacrificing the 4180 MW Upper Karnali Storage project According to the pre-feasibility study report  the 300 MW Upper Karnali project and the 4180 MW Upper Karnali storage project are mutually exclusive. The 4180 MW Upper Karnali project is the most attractive hydropower among the projects identified so far in Nepal. It far excels even the highly attractive 10,800 MW Karnali Chisapani project in performance to generate electricity at extremely low cost on a massive scale.  It can be roughly said that the 4180 MW Upper Karnali project might be able to produce  as much as 50% of the total energy generated  by the 10,800 MW Karnali Chisapani project at  only about 1/3 cost of the latter.  

The overwhelming superiority of the 4180 MW  Upper Karnali storage project among the large hydropower projects identified so far in Nepal  is so obvious that the team of the consultants conducting the pre-feasibility  study of  the 300 MW Upper Karnali project  under the financial assistance of the World Bank found themselves duty bound to  warn  us to refrain from harming the 4180 MW Upper Karnali  storage project. They have clearly stated in the pre-feasibility report that the construction of  the 300 MW Upper Karnali project will preclude the implementation of the 4180 MW Upper Karnali storage project.   
Is Parliamentary Committee Adequately Informed? 

It is reported in the newspaper that at some stage the Parliamentary Natural Resources and Means Committee was also involved. It is not clear whether or not  the Parliamentary Committee was informed about the fact that the 300 MW Upper Karnali project and the mammoth 4180 MW Upper Karnali storage project are mutually exclusive. Do all the members of the Parliamentary  Committee  know the whole truth about the Upper Karnali projects?  Is the Acharya task force or another Committee under the former finance secretary, set up to advise the Government, competent  to make satisfactory recommendation, which requires in-depth analysis of  all relevant technical documents? .  
People Must be Informed 

There is no escaping the fact it is not possible to implement the proposed 300 MW Upper  Karnali project without sacrificing the most attractive 4180 MW Upper Karnali storage project. Do not the people of our country have the right to know from the Water Resources Ministry and Parliamentary Natural Resources and Means  Committee why the mammoth 4180 MW Upper Karnali storage project is being sacrificed to implement  the relatively tiny 300 Upper Karnali project? 
Why Upper Karnali Storage So Attractive 

The Karnali  river makes  a  big  loop  in its  lower  reach  near  a  place  called  Asare. From here  the  river  flows  in  the  south-east  direction  for  about  25  kilometers,  after  that  the  river  makes  a  complete  reversal  in  its  direction.  The  river  comes  back  to  a  point   just  two  kilometers  away   from  its   earlier  position  near Asare.  There  is  a  drop  of  about   150  meters  in   Karnali  river  bed  elevations  between  these  two  positions  merely   two  kilometers  away  from   one  another The  project  to  utilize  this  bend  for  power  generation  is  known  as  the  Upper  Karnali  Project.   . There  are very good sites to build a  large  storage dam  at  the  beginning of  the bend.  Thus, it makes the Upper Karnali  Storage Project far superior to the  10,800 MW Karnali  Chisapani Project  in terms of  per unit capacity  investment cost because its hydropower station would be operating at a firm head two times greater than that of the latter though the total length of the waterway  of both these hydropower plants would be almost exactly the same.  
Large Cost Reduction at Higher Heads 

Of  all  the  site  characteristics, head  is  the  most  important.   Design  guidelines, 1989 approved  by  the  American  Society  of  Civil  Engineers (  a  document  used  throughout  the  world   for  the  design  of  hydropower) has   given  some  simple  reasoning  that  would   help to  explain   why  the  Upper  Karnali  project  operating  at   a  head    about  two  times   greater  by  comparison  with   the  Chisapani   hydropower  could  be  built  at   far  less   per  unit   installed   capacity  cost. "Very  simply  if  one  doubles  the  head  the  quantity of  water  needed  to  produce  a  certain  amount  of  energy is  halved, Thus, for  like  site energy  development  the  conduit   area  and  reservoir  volume  are halved  and  further  large  cost  reductions  occur for  powerhouse  and  machinery  costs. This  fundamental   consideration  is  at  the   root  of  the  large  cost  reductions  that  occur  at  higher heads."  Needless  to  mention  that  the  lower  investment  cost  means  the  generation  cost  of  the  electricity  would  also  be  less.  
Comparative Investment Cost of Upper Karnali Storage 

By  comparison  with  the  mammoth  10,800  MW  Karnali  Chisapani  Project  the  firm head  of  the  Upper Karnali  Storage Project  would  be almost  two  times  greater.  It  can  be  derived  based  on  Stage  A  Optimization  Study  Data  of   the  World  Bank financed   Karnali  Project (Chisapani)  Study  report  that  per  KW  installed  capacity  construction  cost  of  the Upper  Karnali  Storage  Project  could  be  only  about  2/3   of  such  cost  of  the  project  at  Chisapani.  If such comparative cost reduction advantage is treated as  additional bonus to accrue to Nepal on top of normal royalty to be received from private developer then our country might be able to  earn per year at present  cost of peaking energy  about US $ 300 million as extra bonus which is equivalent  to gross value of  the total  annual production of paddy in the whole country considered to be between 2.5 to 3  million tons at a price of  about US $ 100 per ton. 
Upper Karnali Pre-feasibility Report 

The  World  Bank  supported  pre-feasibility  study  has  clearly explained  that the 4180 MW Upper Karnali Storage Project and the 300 MW Upper Karnali Diversion Project  are mutually exclusive. The relevant  excerpt  from  the World  Bank supported    study  report  is  presented  below.  

“Even  when  assuming that  the  KR 1 A  run-of-river  project (it indicates the  small  300 MW Upper  Karnali  project) is  a  sunk cost, it  will be  seen  that  a  single large  power  plant (4180 MW)  associated  with  the  major  storage  project is  less  costly  than the  combined  cost  of  smaller  plant  at  the  same  location (3532 MW)  and  a  second  power plant at  the foot  of  the storage  dam ( 348 MW)  discharging directly  into  the KR 1A  run-of-river  project  head  pond.   Based  on  this  assessment, it  appears  that  the  later  development  of the major  hydro  storage  project at  Site KR 1  (  4180 MW  Upper  Karnali Storage Project)  would  cause  the  KR 1A  run-of-river  project  to  be  effectively  discontinued.  There  may be  limited opportunity  for  secondary  energy  generation during  the  periods of spillage”.  
Foreign Expert Against 300 MW Upper Karnali 

Mr. Paul Terrell  from the Bechtel International of the USA  was Chief Advisor Consultant   of the Upper Karnali Project study conducted under the World Bank financial assistance. Mr. Paul Terrell has categorically cautioned Nepal in his article published in the journal “HIMAL” that our country should never compromise optimum development for the sake of a quick deal.   
In Conclusion 

Our  grandiose  national  plans  to  develop  our  water  resources  to  uplift  the  economic  condition  of  our country in general and the people of Karnali in particular would  be  nothing  more  than an  empty  rhetoric  if  we failed  to  intervene  in time  to  save  the  4180  MW  Upper  Karnali Storage  Project  which  might  be  the  best even in  the  whole world  for  the  generation  of  cheap  peaking  energy  on  a  large  scale.  We should not hesitate to invite competent  foreign  experts  for  advice if  we  find   ourselves  not  capable  to make  correct   judgment  on  this  very  important  matter.