The Arun III Tragedy: Probably We Could Have Escaped Load Shedding!


Arun, a mighty river that flows from the eastern Himalayas of Nepal has a story to offer. This story reveals about that one incident which changed the course of Nepal’s pursuit of harnessing energy, shifting the nation’s paradigm to an unknown period of darkness. Perhaps no single development issue attracted as much attention, controversy, and debate in the early nineties as the Arun III Hydro Project located in Sankhuwasabha district.

Fed by mountain glaciers and aquafiers, the most attractive feature of this project was the firm energy it produced throughout the year. Unlike other projects developed and identified for the future that generated very low firm energy, ranging from 15 to 60 percent of the installed capacity in lean seasons, Arun III provided about 85 percent of the firm installed capacity even in the dry season of December-April, when the need for load-shedding normally becomes acute in Nepal. In 1987, a Least Cost Generation Expansion Plan (LCGEP) was prepared with the help of a Canadian firm called Canadian International Water and Energy Consultants. The Plan had concluded that the most economic generation sequence to meet the forecasted demand through 2005 would be a combination of load management, thermal power, and a two stage Arun III project. The study had considered various options including both thermal and hydro projects and an update of LCGEP in 1990 had reconfirmed that Arun III was part of the least cost plan.

The total generation capacity of the project was 404 mw of electricity .The total estimated cost of the project, as of 1994, was US $ 1.08 billion, of which about two third was committed by external agencies, entirely in the form of grants and soft loans. The Japanese had committed soft loans convertible into grants and thar1e World Bank and ADB loans represented soft credit payable over a period of 30-40 years at less than one percent service charge. Others were grant-cum-credit. A rough calculation showed that the foreign assistance package had a seventy percent subsidy element in it and the annual power generation from the project at the prevailing power tariff at that time would yield approximately five billion rupees. The debt servicing obligation and operational costs of the project would take about one fifth of this revenue, leaving approximately four billion rupees as net revenue to the Government for investment in other priority sectors.

One important component of the project was the 122-kilometre access road to be completed at the cost of $ 124 million. The road was important from social and regional development standpoints and it further made possible the development of second phase Arun III plus the Upper and Lower Arun. The combined power capacity of these projects was an estimated 844 mw, making the overall power generation among the cheapest in Nepal.  If one were to further take into account the use of the access road and transmission lines for other projects including the Lower and Upper Arun, with total the generation capacity of 643 MW, the energy generation cost would come down to be among the cheapest in the world. The country had already spent US $20 million for pre- feasibility, feasibility, and the engineering designs. Various other studies concerning the environment, seismology, hydrology, resettlement, and GLOF had also been completed, and their appropriate prescriptions incorporated into the project design.

Unfortunately, the project attracted unprecedented debate and controversy both within and outside the country by a powerful network of international non-governmental organizations. However, the staunchest anti-Arun campaign was launched by international NGOs and their local counterparts in various financial capitals including Washinton D.C., Manila, Tokyo, and Bonn. The controversy took a political turn when the Communist Party of Nepal criticized the G.P. Koirala-led Nepali Congress government for promoting the project without creating a national consensus and studying alternative scenarios. They were also suspicious of the role of ‘commission money’ behind the project

And then that one incident happened which changed the course of Nepal’s pursuit of harnessing power. Situation reached its climax when the General Secretary of Nepal Communist Party (UML) Madhav Kumar Nepal shot a letter dated 18 October 1994 to the World Bank President expressing “serious reservations about the way the project has been designed and proposed”. He also wrote that he would undertake a fresh review of the cost-benefit and the environmental side of the project before taking any final decision, “if elected to form a new government in Nepal.” The letter also questioned the mandate of the then ‘caretaker’ government to make a decision on such a vital project. The timing of this letter could not have been more critical, Nepal was preparing for mid-term elections, and the World Bank Board was scheduled to give final approval to the project on the 3rd November 1994. Naturally, the World Bank took the content of the letter seriously, as it came from the leader of the major opposition party which stood a chance of winning the election. Consequently, it deferred the final project decision on the project. The mid-term elections in November produced a hung parliament with no party winning majority seats. The CPN (UML) which emerged as the single largest party formed a Minority government.

The anti-Arun campaign was gaining strength. A new management had assumed office in the World Bank and they did not share the same commitment to the project as their predecessors. The World Bank was not convinced of the Government’s commitment to the project. On 3rd August 1995, the new World Bank President James Wolfensohn cancelled the project “in agreement with the Government of Nepal”. Referring to his telephone conversation with Prime Minister Manmohan Adhikari, he said priority would now be given in “devising and implementing alternative strategy of meeting its needs for electric power”. Asian Development Bank and the Government of Japan were successfully persuaded to jointly support this project. This support was irrespective and independent of Arun III and therefore, there was no transfer of funds committed to Arun. Only the funds committed to Arun III by Germany was transferred to Mid Marshyangdi Hydro Project, and that too after a lot of persuasion.

It then took 20 long years for government to finally bring back Arun III on ground. On November 25, 2014 a day before the 18th SAARC Summit, a public sector company of India SJVN Limited signed a Project Development Agreement for the implementation of 900 MW Arun-3 Hydro Electric Project with the Government of Nepal. The agreement was signed at Kathmandu in the presence of Hon’ble Prime Minister of India, Shri Narendra Modi and Hon’ble Prime Minister of Nepal Shri Sushil Koirala.

One has to accept some tradeoffs between environment and modern development. Construction of infrastructure projects like hydropower, roads, and irrigation create negative environmental ar4impacts, but such projects are also vital to improve the living conditions of the people. Otherwise poverty itself will destroy the ecological balance. What is important is a proper mitigation plan to minimize the negative environmental impact from such projects to maintain a balance between environment and development.

The debacle of Arun III has a lesson, if only we are prepared to learn it. Project preparation and investment for the scale of Arun III takes many years of time, money, and effort, even when goodwill and congenial atmosphere for development assistance prevail. But it takes a few months of determined activism to destroy it in this world of instant global communications. Opposition to such project can always be expected from the global network of organizations for ideological and other reasons, but when national policy makers themselves fall prey to wrong and motivated advice, the nation suffers.

Once undone, recovery cannot happen early and easily.


-Dr. Ram Sharan Mahat’s Report “In Defence of Democracy”

-The World Bank Staff Appraisal Report, Arun Three Hydro Electric Project 29 August 1994.

-The World Bank News Release No.96/Soo8. August 3, 1995.

Women Moving Mountains: And you say they are not physically strong..


For ages mankind has set a belief mechanism about what a women can’t do and how in every other way, men are superior. Sadly, there still are those stereotyped beliefs found everywhere in the world. This is my attempt to challenge those perceptions. And I am not going to do that through arguments rather I would share with you a real life example and leave it on you to decide that if there is any place still left to doubt women. Of all other areas, their physical capabilities are something that is questioned every now and then. What if I tell you that the women of western Himalayas of Nepal are moving mountains so that they can connect with the rest of the world?

Rural Access Program funded by UKaid  is the project where I am currently working on. This project build roads to connect the remotest areas of the country to the rest of the world. Because it’s a mountainous region, traditional approach of road construction is not feasible enough. And because it is funded as a poverty alleviation program, hiring contractors to build roads would be irrational. So what it does is hire local people who live in the ‘to be build’ road corridors and train them to construct roads. It’s a labor incentive approach where roads are also constructed and poor people also get employment. Win – Win situation at both the end. I am currently at mugu district and at this place alone there are 1278 labors mobilized to build 43 KM (21 KM for now) road which shall connect their villages to the district headquarter. The interesting point is, 500 of them are women.

Women wearing hard hats, boots and gloves, smashing the hard rocks of the mountains with all their physical forces applying on the hammer. No less of a man, in fact, a lot of women are more efficient and productive. Every day these soldiers of development fight their war on the extreme conditions, chipping out tons of hard rocks from the mountains, opening the track. Some with their babies on the field and running the expenses of the house, alone because their husbands are busy drinking alcohol. Illiterate they might be but what they do here is more meaningful ww2orks than lots of politicians have ever done or will ever do. They are making a huge difference. Building roads is one hell of an important thing but they are also building a set of trends that is redefining the image of a women in our society. That too from the remotes part of the world.  I had a chat with some of them and some of their answers: “We get paid and our children go to school, wear good clothes and eat good food. That is what matters the most. And what we are doing will make our village prosper in the future.” Confident woman, isn’t she? When asked about if they could match the stamina and productivity with their male counterpart’s one of them really made a hilarious statement “You can sit here and check, who is faster and efficient. We do this work every day and doing this continuously has made us strong enough to win fights over our husbands. These are just rocks.” Then she laughed. One of the group leader is a women and she controls, manages and organizes everything very effectively. Nobody complains about women being a leader of a group. Even men out here have accepted that women can be better leaders. I wonder if it’s really education that creates a better mindset because I guess these illiterate men have better perceptions about the women than many literate and qualified men of the mainstream society. I remember a woman saying “I am respected in my house like my husband. Both of us earn money and are able to feed the entire family. My father in law looks after our kids while we are working. For now everything is going good.


They are truly an example of ‘the woman of substance’. I have come across a lot of people who seriously think that women are not as capable as men. But I always avoid them. Reason? I am not an activist of women empowerment and I have no such expertise to argue about it. And my small argument will not make them wise anyway.  But these women of Karnali Region who are moving mountains here will challenge every bit of stereotypes who don’t believe in equality. Humanity is at stake because our women are not safe, are not empowered, are not encouraged enough to make a mark in the society. Sad part is, a lot of them doubt themselves too. However stories like this inspire our soul and restores out faith in mankind. I hope a better world is coming. At least at this remotest corner, it already has!

ROADS: Where Nepal’s limited economy is getting dumped like a garbage!

Disclaimer: Articles in this blog are writer’s individual opinions and not in any way represents any organization or the opinion of any 3rd person. Every fact is individually researched and stories are the result of personal observations. Resemblance is purely co-incidental. These posts do not intend to hurt sentiments and provoke chaos. The sole purpose of these articles is to share personal experience and to create a source of reliable information and inspirations.

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Recently, Government of Nepal released a budget of NRS. 819 billion. No doubt, it is not a great budget. Because the country just has woken up from the catastrophic earthquake and we have an avalanche of infrastructural and social problems to solve. We are a poor country and that is why we have every reason to believe that this is the best we could get. However this limitation of economy does not frustrate me. What makes me worried and concerned is seeing this limited resources getting dumped like a garbage. Yes, you heard me right. Dumped like a garbage! I am going to share with you a story which shows that how our limited money is being miss utilized in the name of development.

At some part of Nepal, some government authorities (for some reasons cannot disclose the exact place here) took up a project to build a road to connect some VDCs to the district headquarter. Appreciated work! When the phase of implementation began, this road was given in a contract package spending about NRS. 5 million. Because roads cannot be built in space, lands had to be used, some cultivated and some with settlements. In case of local roads, there is not any provision of paying compensation to the people who lose their lands. So while this road got built, some people lost their lands. Accepted! Because it was about prosperity, it was about stepping up towards newer dimensions of change. And everything comes with a price. But what if, after paying the price you do not get the promised results.

The construction of this road is now completed but you cannot see a single vehicle running along the length of this so called ‘Feeder road’. Why? When we build roads, there are some engineering standards that needs to be strictly followed, especially while building hill roads. The ruling gradient in hill roads must be 7% which means slope, where for every 100m length there is a rise of 7 m. And the maximum permissible gradient can be 12% that too for a controlled length of 400m. So, I happen to walk in this road personally and I can bet that there are places where the gradient of this road has reached up to 22%. Imagine the steepness! Not in any way can the routine automobiles climb these steep slopes. So, did they spend millions of rupees to construct a comfortable path for donkeys? If so then we should probably be a very rich country that even our animals are getting so much of extravagant treatment. If not then a very serious question gets raised here? Why build such kind of road which cannot be used and even used is very unsafe to operate? The root of the problem is obviously corruption. Every year these development authorities of the country get millions to spend on development activities. Without bringing the project on ground this money cannot even be touched. So in a hurry of using the allocated budget, projects are planned and designed very weakly, such that it can quickly be implemented escaping many technical, social and economic hurdles. The effective implementation consumes more money and time, creating hurdles for the corrupted government officials to make money. So in an attempt to make money out of the every allocated budget a reckless approach is taken which gives a rubbish result


Not only is this the wastage of limited economy,lands of the poor people are also destroyed in such irresponsible and corrupted works.  Innocent farmers who are completely unaware that the road meant to be their escape route from poverty has actually turned out to be a ditch, trapping them again in the same darkness. This is just a drop of example out of the ocean of corruption into which our country is sinking every single day. Out of 50,000 KMs of district roads, only 12,000 KMs are in the operable condition. And this is just the district road I am talking about. Imagine what would be the result if we add National Highways, Feeder Roads and Village roads. Adding to it, what would be our infrastructure development inefficiency if we add hydropower, irrigation and other areas? I just don’t even want to think about it. Because I am sure the result will make us all cover our faces with shame in front of the world community.

With poverty comes a responsibility to utilize the limited resources in the most effective and efficient way. Have you ever heard about any poor family throwing their hard earned income to the garbage? That doesn’t make sense right. Then how can a poor country afford to be so reckless in spending its hard earned budget. Or maybe, we are poor because of the recklessness that are done in spending the budget. If so, then how do we get out of this vicious circle? Frankly speaking I do not know! We have every kind of department with a great structure to carry out the entire development works of the country in an effective and transparent manner. We have Planning commission, Anti-Corruption Bureau, Ministry of Federal Affairs, District Development Offices and what not.

So, where is the loophole then? The loophole is probably in our culture. The culture of accepting corruption, tolerating it and letting it happen everywhere. And for that to change, the entire system needs to be upgraded. Thus bringing this to the same conclusion ‘Improvement in the country’s politics’. Until then I guess, we shall have to get used to this bitter truth of our limited resources being dumped like a garbage. To people seeking answer of why our country is not developing. I think you got your answer. Money is not being spent on development, it is being thrown into a garbage. I am worried that if the trend continues then one day we shall be a nation of trash accumulating mountains of dumped infrastructures which cannot be used. And there we shall all be lost into the darkness of a failed economy. May that day never come!