Subject:      The Nepal Digest - October 8, 1996 (25 Ashwin 2053 BkSm)
From:         rshresth@bbn.com (Rajesh B. Shrestha)
Date:         1996/10/11
Message-Id:   <rshresth.845036242@lisa.bbn.com>

[excerpt from Nepal Digest on Pancheshwar project]

When the World Bank withdrew its support for the Arun III Dam in Nepal in
August 1995, its reasons were that the project was too large and complex
for a poor country such as Nepal and that investing in the dam would "crowd
out priority social expenditures." Yet the Arun project would have been
dwarfed by the Pancheshwar Dam, the cost of which is currently estimated at
$12 billion, compared to the $1 billion price-tag of Arun III.

Citizens' groups in Nepal opposed the Arun project for the same reasons
given by the World Bank and also because it would have destroyed the
nascent indigenous hydro industry. This indigenous industry is building
small and medium-sized projects which can cost-effectively exploit the
hydropower resources of Nepal and provide electricity for the country's
cities and its scattered rural population without causing major
environmental harm or necessitating the resettlement of large numbers of
families.

The groups opposed to Arun III also raised concerns over the social and
environmental impacts of the project and the secretive and undemocratic
nature of the dam's planning process. All these concerns are magnified many
times by the mammoth Pancheshwar scheme. No detailed feasibility studies,
environmental impact assessments or resettlement plans for Pancheshwar have
yet been completed. Lobbying for this massive dam without any detailed
knowledge of its technical and economic viability, safety, or social and
environmental impacts is, we believe, irresponsible.

State Department support for the Mahakali treaty also represents double
standards, given that major dams are now widely accepted to be an obsolete
and inappropriate technology in the US. Daniel P. Beard, Commissioner of
the US Department of Interior Bureau of Reclamation between 1993 and 1995,
has noted that "the significant construction and operating costs of
large-scale water development projects cannot be repaid . . . the actual
contribution made by these projects to the national economy is small in
comparison to alternative uses that could have been made with these public
funds . . . [our] experience has been that the actual total costs of a
completed project exceed the original estimated costs by at least fifty
percent, and often, project benefits were never realised."

Mr Beard has also stated that because of public and political opposition
"the opportunity for construction of new, large dams in the US is now
extremely remote, if not non-existent" and that "the dam building era in
the United States is now over." The Bureau of Reclamation was once the
world's most prestigious dam-building agency.

In September 1993, the Bureau of Reclamation halted its provision of
technical support for China's Three Gorges Dam noting that the project was
"outdated and overly expensive" and adding that "we wouldn't support such a
project in the US now, so it would be incongruous for us to support such a
project like this in another country". Three years later, citing
environmental concerns, the US Export-Import Bank also refused to support
Three Gorges Dam.

On April 9, 1996, during your widely acclaimed talk at Stanford University
on 'American Diplomacy and the Global Environmental Challenges of the 21st
Century', you stated that the Clinton Administration is "determined to put
environmental issues where they belong: in the mainstream of American
foreign policy." State department lobbying for the construction of the
Pancheshwar Dam before even preliminary information is available on its
inevitable environmental impacts is, we believe, inconsistent with this
praiseworthy aim.

We urge you to bring a halt to the State Department's active advocacy for
the Mahakali Treaty and communicate to the Nepalese government and public
that the US Administration does not promote megadams either at home or
abroad.

Yours sincerely

Patrick McCully
Campaigns Director


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