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Revisiting the Kosi Agreement: Lessons for Indo-Nepal Water Diplomacy

Medha Bisht was Associate Fellow at Institute for Defence Studies and Analyses, New Delhi. Click here for detailed profile.
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  • September 22, 2008

    The year 2008 has witnessed yet another disastrous flood in North Bihar. Floods in Bihar have been almost an annual phenomenon. Though the capacity of the river flow was well below the danger line this time around, the situation was in fact aggravated by a breach in the Eastern embankment. Estimates indicate that around thirty lakh people have been displaced and their livelihoods devastated in sixteen districts of north-eastern Bihar. At the same time, around 50,000 people have been affected in Sunsari district of Nepal. Political leaders on either side of the India-Nepal border have been blaming each other’s country for failing to prevent such a massive disaster. Some like Nepal’s Prime Minister Pushpa Kamal Dahal# have even blamed the Kosi Agreement signed between India and Nepal in 1954 for the disaster. Dahal referred to the agreement as “a suicidical” and an “unreciprocal” agreement, which has been responsible for floods in Nepal every year. But such criticisms are based on poor knowledge and understanding of developments over the last several decades.

    India and Nepal signed the Kosi agreement in 1954 to regulate the flow of the river and ensure flood management. A barrage straddling the India-Nepal border was to be constructed for this purpose, and embankments were to be raised on either side of the river. At the same time, the project was also to be utilised for power generation and irrigation purposes. Designed to hold 9.3 lakh cusecs of water, the barrage’s total irrigation capacity was estimated at 1.5 million acres, of which around 29,000 acres lay in Nepali territory. The project was supposed to generate 20,000 KW from the Eastern canal, of which around fifty per cent was to be sold to Nepal. The overall estimated cost of the project was Rs. 450 million, which was to be entirely borne by India.

    The development of the Kosi project took place in three phases. The first phase was the period of the 1950s, when the Kosi Agreement was signed. In the 1960s, the agreement was amended and new clauses were added. And the third phase was the 1980s when India came up with the idea of an alternative to the Kosi Barrage.

    Certain aspects of the 1954 Agreement created friction between India and Nepal, the most important of which was the issue of compensation. India was responsible for providing compensation for the land acquired in Nepal as well as all damages done in the course of the construction of the barrage. It was also responsible for the design, construction and operation of the project. Nepal contended that the agreement was skewed in terms of the benefits that accrued to the two countries. In terms of irrigation, for instance, only 29,000 acres in Nepal benefited whereas the barrage had the capacity to irrigate 1.5 million acres. Some groups in Nepal also expressed their displeasure at the submergence of territory and the resultant displacement of people, none of whom received any compensation. India’s control and management of the barrage was also considered as an infringement on Nepal’s territorial sovereignty.

    The second phase of the project began with Prime Minister Lal Bahadur Shastri’s visit to Nepal in 1965. The Kosi agreement was amended the next year and certain wrongs were rectified. One significant addition to the new agreement was the definition of the lease period. While the earlier agreement did not specify the time line for the Indian presence, the 1966 version stated that Nepal would lease the land for the barrage to India for a period of 199 years. Even this later proved unsatisfactory to Nepal. It was contended that since the overall lifespan of the barrage would not be more than 50 years, the period of 199 years was too long. Power generated was to be shared between the two countries, and the rates were to be on a concessional basis and decided by ‘mutual agreement’. India brought down the capacity of the power plant from 20,000 KW to 13600 KW and both countries were supposed to inform the other if their power consumption exceeded 6800 KW.

    The third phase of the Kosi project started in the late 1980s, when the Indian government proposed the idea of an alternative project to protect the Kosi barrage itself. This stemmed from a breach in the Eastern embankment in 1987 as well as from discontent within Nepal that it was not adequately benefiting from the electricity generated by the project. In 1991, Secretary-level talks were held on the issue of building the Sapt Kosi High Dam. But the feasibility of this project has been questioned from the social and environmental perspectives. The issue of power sharing and generation was taken up in the subsequent talks, and in 2006 a “concessional power tariff” was agreed upon.

    There are thus two principal points of contention between India and Nepal: the issue of water rights and the question of the management, control and operation of the barrage. Nepal being an upper riparian and India a lower riparian state, it is important that the two countries seek to arrive at a common framework of perspectives on this score. They need to arrive at a shared understanding on upstream and downstream rights. The principle of equitable utilisation emphasises on sharing of downstream benefits. At the same time, information sharing and co-operation on water issues is also an important element. With respect to the second point of contention, joint mechanisms need to be evolved for water management and control. An inclusive approach would forge trust and make both countries accountable for any failure. For India, surrendering water rights could be a problem mainly because it is a lower riparian state and granting total control to Nepal could create domestic anxiety in India. But it must realise that mutual trust and co-operation have to be the foundation for sustainable water relations.

    At the same time, one also needs to bear in mind three other aspects. First is the nature of multi-purpose dams. Though the Sapt Kosi High Dam has been considered a feasible solution, detailed studies, especially the report published by the World Commission on Dams, has argued that single purpose dams are more efficient for flood control. The role played by dams in flood management is very different from the role they are called upon to play for irrigation purposes and power generation. For purposes of flood control, reservoirs should have adequate space for adjusting the water flow. But for irrigation and power generation purposes, the reservoir capacity needs to be full.

    Another point is related to applying a multi-stakeholder approach, which involves expert analyses from the social and environmental dimensions. A multi-stakeholder approach can prove extremely effective in water management issues as it could help in minimising risks that could adversely affect the lives of common people in the long term. Public consultation, where people are considered as positive stakeholders, and a cost-risk assessment should be made to anticipate the trade-off between losses and benefits that would be incurred by the project in future. Multi-stakeholders here would be the private sector, the state government, representatives of civil society and experts on dams who take into account the ecological and social aspects.

    The last point is that water cooperation can be an effective antidote to the irritants in India-Nepal relations. Nepal at present has a power potential of 84,000 MW, which can be exploited for the benefit of both countries. While Nepal needs the Indian market for exporting hydro-power; India needs Nepal’s resources to satiate its agricultural needs and minimise it power deficit. Problem solving approaches that can result in win-win outcomes should therefore be the primary aim.

    The Nepal of 2008 is different. This ‘new’ Nepal has witnessed internal political changes and a representative power-sharing arrangement. India should be ready to renegotiate with an open mind. The Nepali prime minister had made it clear that the state of damage, which has claimed around 50,000 lives, is unprecedented and that it should be the prime duty of India as per the agreement to repair the damage. Though no statement has come out from the Indian side, scepticism remains over any potential effective water management cooperation agreements between the two countries. At present there remains a looming suspicion over any potential effective water management cooperation agreement. For India cooperation with Nepal is the only solution, due to the limited alternatives available at home. The shadow of mistrust and suspicion could be a costly affair for both countries in the long run. The havoc caused by the Kosi deluge is a grim reminder of the fact that a cordial relationship with Nepal is necessary and that the focus should be on complementary interests rather than confrontational issues.

    # Ammended on 20th April, 2012 to show the correct name.

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