4-10 July 2014 #714

“Indisciplined valuation causing confusion”

The Nepal Country Representative of the Asian Development Bank, Kenichi Yokoyama, spoke to Nepali Times about how to minimise obstruction to infrastructure projects due to compensation demands.

Nepali Times: How have some major infrastructure development projects including Melamchi been affected by local obstruction over compensation or land acquisition?

Kenichi Yokoyama: Compensation to affected people is usually dealt with before project implementation starts, by providing sufficient compensation and livelihood support. In our project portfolio, less than 10 per cent of projects have problems on this issue at present. In the past Melamchi Water Supply Project faced particular challenges. As water has to be diverted from one basin to another in this large-scale project, local people felt that they were deprived. It took years to come to agreements with the affected communities. The project is now providing due compensation for acquired land, and various infrastructure and livelihood programs in the Melamchi valley. Among other projects, transmission line projects sometimes face problems, as the government’s regulations can provide only 10 per cent of the land price for the strips below the electric lines as usufruct, while people often demand acquiring the land.

So, would you say this is a major deterrent to foreign investment in Nepal?

Investor confidence seems to be gradually improving, but is still affected by political stability concerns under the ongoing transition. There are also a range of governance-related and labor union problems. Bottlenecks in infrastructure are severe, particularly power and transport. Human capital is also constrained, lacking skilled or educated laborers. Investor confidence can still be secured if the government wholeheartedly invites and welcomes private investors of important industries, and protects them by proactively helping them resolve any impediments, be it labour disputes, power supply, problems on governance, etc. Given that crippling power shortage is likely to be resolved in the next few years and political transition is also progressing, initiating such genuine investor promotion and protection could really heighten confidence. Consensus among political parties on key economic development agenda will also help.

What are some important steps the government or parliament should take to remove obstacles for urgent infrastructure projects?

I agree that land acquisition and compensation will be increasingly challenging, in view of the need to accelerate infrastructure development, rapidly rising land prices due to urbanisation, people’s sentiments with their lands, and limited experienced personnel to handle the process. The present Land Acquisition Act 1977 is also outdated, lacking pertinent provisions such as for informal settlers and indigenous peoples. Presently, ADB is facilitating the government to draft a national resettlement policy to provide an umbrella framework to set out key principles and procedures. Establishing scientific land valuation guidelines is also pursued as critical, as indisciplined valuation is causing confusion and tension locally. Meaningful and early consultation, information disclosure, sufficient compensation with clear disciplines, and capacity development of personnel involved are some of the key requirements.

Do you foresee similar problems with the Tanahu hydropower project that ADB is supporting jointly with JICA?

The Tanahu Hydropower Ltd has prepared the resettlement and indigenous peoples plan, which identified all the project affected people, and set out compensation and livelihood restoration plan in consultation with them. There are 758 affected households, among whom 86 need to be displaced by reservoir, hydropower station, and associated facilities. Under the plan, all households will be fully compensated for loss of agriculture and residential lands and structures following the ADB policies. On top of this, livelihood restoration support is also provided to restore income bases and building viable communities. The project has initiated implementation of the plan, and there has been no serious discontent by the affected communities. There are also project information centers and a grievance redress mechanism involving third party facilitators.

Read also:

Progress on hold, Bhrikuti Rai

Patching up Melamchi, Navin Singh Khadka

Powerless future, Bhrikuti Rai

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