Nepali Times

Last month, construction began on the much-awaited Mechi-Mahakali Electric Railway that will be the backbone of mass transportation in Nepal in the future.

The Minister for Physical Planning and Transport Bimalendra Nidhi laid the foundation stone for the project’s 108-km Simara-Bardibas section of the tracks, and devoted a large part of his speech beseeching local people not to delay the project.

But the very next day, locals from Ranigunj obstructed construction of a 5km bed track citing inadequate compensation offered by the government for their land. Since then, construction has ground to a halt. The railway is also plagued by controversy between government departments. For example, the Department of Wildlife and Nature Conservation and the Chitwan National Park have opposed a proposed railway alignment that would bisect the park.

“The state is ready to compensate the locals to acquire their land as per the law, but how will it be possible if they start demanding unreasonably high compensation and obstruct major projects like this one,” says Ananta Acahrya, director general of the Railway Department.

The construction of urgent hydropower projects, the new Pokhara airport, Sikta Irrigation Project, strategic transmission lines, have either been delayed or suspended because of high compensation demands that border on extortion. This does not bode well for mega-projects in the future like the Chisapani storage dam on the Karnali.

Land prices shoot up as soon as large infrastructure projects are announced, making the projects unfeasible. In 2013-2014, not a single km of transmission lines were added to Nepal’s electricity grid despite the Rs 6 billion earmarked for it. This year Rs 13.5 billion was set aside for cross-border transmission lines to import power from India, but there has been no progress.

A 220kV transmission line that stretches 75km from Sahare of Dolakha to Dhalkebar on the East-West Highway was started a decade ago. But the power lines that will feed electricity from several new hydropower projects in the Tama Kosi Valley to the national grid have been stuck for over two years because locals have demanded $1 million in compensation for three pylons in Sindhuli.

Similarly, Nepal Electricity Authority’s (NEA) 132 kV Thankot-Chapagaun-Bhaktapur transmission line has been stuck for nine years due to unrealistic compensation demands from Kathmandu Valley residents.

“We have had several rounds of discussion but the locals in Thaiba and Khokana are demanding 100 per cent compensation which we simply cannot accept,” says NEA’s Pushparaj Khadka. “Even if we generate sufficient electricity, we can’t feed the growing demand of Kathmandu unless we complete this transmission line.”

The NEA is now looking for alternatives including underground cabling if the local opposition persists.

According to the Electricity Act of 1993, people have to yield 15m of property on either side of the wires and are paid 10 per cent of the prevailing rate, and compensation for land used for pylon pads. The arrangement has worked everywhere except in Kamalamai and Bhimeswor VDC of  Sindhuli and in Thaiba and Khokana in Lalitpur.

“Local communities are often led by a few vocal oppositionists to demand hefty compensation,” says former finance secretary Rameshwor Khanal. “Unless everyone, including the political parties, realise that it is the taxpayers’ money that the government pays to compensate local demands, the trend of extorting money from state treasury won’t stop.”

Such extortion will make future large reservoir projects impossible to implement without a strict resettlement policy, development experts say. Because a lot is left to local discretion and high public expectation from foreign funded projects, compensation demands border on extortion.

The Asian Development Bank (ADB) is helping the National Planning Commission to draft an umbrella framework for resettlement. “Establishing scientific land valuation guidelines is critical, as undisciplined valuation is causing a lot of confusion and tensions locally,” Kenichi Yokoyama, the ADB’s representative in Nepal said (see interview).

But other experts admit that as long as the state is perceived as unstable and corrupt, any new policy will be a challenge to apply on the ground.

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