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The pitiable existence of the more than one lakh Bhutanese refugees of Nepali origin now living in the seven refugee camps in eastern Tarai remains more or less the same as it was 17 years ago when, expelled by the Druk regime from their own country or fleeing torture or persecution at home, they had to enter India, their first country of asylum. Later, they entered Nepal — a number of them had been carted off to the eastern Nepal border by the Indian police and left there. On Monday and Tuesday, thousands of refugees attempted a “Long March” to Bhutan, as on several occasions in the past, and as before, their long march has been cut short by the Indian police (and troops, too, on Tuesday) especially stationed in force as the refugees tried to force their way through the barricades in the Indian side. Inside Nepal, this had been preceded by the death of two refugees in police firing in Beldangi refugee camps. The refugees’ determination to return home was also a proof that third-country resettlement was not everything for them.

However, the offer to resettle 60,000-plus refugees in the US and other western countries should be taken positively, at least in one sense. At the same time, the seeming American unwillingness to pressure Thimphu to resolve the issue according to international conventions has surprised many Nepalis, as well as refugees, especially because wherever it wants the US tends to throw its weight around. This leaves some room for doubt. On its part, India has for umpteen times ruled out the possibility of using its good offices to end the refugee deadlock, terming it purely a “bilateral issue”, except once, during the world conference on the environment and development in Rio de Janeiro in 1992, when the then Indian prime minister P V Narasimha Rao had sounded positive on the idea of India helping resolve the issue.

Serious doubts exist in Nepal on this particular issue mainly for two reasons. First, New Delhi was seen to take an interest in ensuring that most Bhutanese refugees in Indian territory came into Nepal, whereas, since then, it has prevented the refugees, if need be by applying force, from going back home. Secondly, the Bhutanese government, under a 1949 bilateral treaty, is to be guided by the advice of the government of India in its external relations. Therefore, there are people who express reservations about the view that the refugee issue is a bilateral one. This, according to them, is a “heads I win, tails you lose” approach. Besides, they also look at the US position with a pinch of salt — its relative silence on the right of the Bhutanese to return home and its offer of resettling them may indeed strengthen the Drukpa rulers, who, some doubt, may then be emboldened to expel more Bhutanese of Nepali origin. The stalemate strikes one as odd because both the US and India are hailed as great democracies. The first and foremost right of any refugee is to be allowed to return home, but under the formula being promoted, this has been ignored. Options like third-country resettlement may indeed be a good opportunity for the willing.

Source: The Himalayan Times, May 30, 2007

Water supply: Case for public-private partnership

Chiranjibi Nepal

I n the early 1990s, with increasing awareness of environmental degradation and widespread stress on water-related issues, the UN and the international community started to take freshwater issues seriously. In accordance with the “Dublin Principles” that emerged from the International Conference on Water and Environment in Dublin, water was recognised as an economic good (a commodity to be priced at cost of provision and value to society). Private sector participation in water services increased worldwide. But still, it only serves about five per cent of world population. At the end of the 1990s, multinationals started to revoke contracts and concessions in developing countries and are now reducing their involvement in projects that are unprofitable or risky.

Two popular models exist in the water sector: the English model of full privatisation, where ownership and management are private, and the French model (PPP model) of delegated management (lease and concession contracts), where the ownership is in public hands and the management is handled by a mix of public and private bodies. The English model is adopted mainly by England and Wales, whereas the French model has been the norm in most developed and developing countries.

Partnership between public and private sectors is a means of collaboration to coordinate and pool organisational, technical and financial resources to achieve compatible objectives. Dwindling public resources and increasing need of the citizens with regard to service delivery are the reasons for emergence of this concept. Public-private partnerships (PPPs) enable public sector to generate private funds while maintaining ownership of assets and services.Private sector’s involvement can significantly improve effectiveness and efficiency of service delivery. This came with the realisation that the government alone could not provide everything to everyone. This led it to promote private sector in areas where it is willing to cooperate for service delivery or infrastructure building. PPPs for service delivery are applicable to the most of public services such as drinking water supply, garbage collection and disposal, waste water treatment, operation of transport services, real estate development and management, education and public health.

In the context of the kind of urban services in Nepal, there is limited scope for the multinational companies (except in Water Supply Management). However, there is a high potential for local and national companies. But comprehensive national policy on public private partnership is still underdeveloped. PPP should be based on mutual prosperity and fairness and PPP policy should follow national policy for timely and cost effective development by allocating risks to the party best able to manage them and benefit from private sector’s efficiency, expertise, flexibility and innovation.But PPPs will only help if there is a good regulatory authority that can enforce policies and regulations. The issue of public-private partnership is complex, even more so in the case of municipal water supply. Hence, every law and institution that can affect PPP must be carefully examined. These include labour law, industrial enterprise act, company act, company taxation rules, environmental standards and regulatory tools, power and capacity of regulatory agencies, division of responsibilities between municipality, VDCs and Nepal government, among other related acts and policies.

The private sector seeks commitment of the political parties to PPP approach, clear definitions of scope of work, transparent tendering process, security of water supply, clear definition of responsibilities of municipalities and VDCs, an autonomous body for drinking water management and a company act for drinking water.New and effective financing mechanisms are essential for the development of water sector. New funding mechanisms should be sought that include bond financing, expanded role for urban banks in water sector, independent intermediary private sector funding through increased participation in water services with appropriate sharing of risks between contracting parties - with the banks providing guarantees for some risks as well as issue of treasury bills.

Private sector participation would be enhanced by arrangements with international agencies to protect against political risks. Availability of guarantee would be contingent upon having appropriate contractual structures for private sector participation. Private companies need to be assured return on investment, as investment in the water sector is high and irreversible. Further, there is no ‘one size fits all’ approach and the choice of a particular partnership depends on local context and feasibility. It is indispensable for governments as regulators to understand the motive of private sector for entering PPPs and have skills to manage unknown circumstances over the life of the partnership.Dr Nepal teaches Economics at TU

Source: The Himalayan Times, May 30, 2007

Worries About Water Politics

John Child

A Maoist minister's move to block a much-needed drinking water project for Nepal's capital is more about politics as usual than power to the people. As Kathmandu residents queue under the tropical sun for water of dubious purity pumped from battered tank trucks, a much-delayed project to bring water to the city from the Melamchi River to the east appears about to collapse. Maoist Minister of Water Resources Hisila Yami has blocked a critical contract at the last minute, citing concerns about the foreign company which has been hired to manage distribution of the water.

Not even Minister Yami disputes the necessity of the project: Kathmandu is chronically short of water. In the 1980s it became clear that action was needed, and surveys selected Melamchi as the best source close to the city. In 1998 the Asian Development Bank threw its weight behind the project, and serious planning began. In 2001 the Nepal government announced that funding commitments from the finance ministry and international donors had been reached, and it initiated the massive project.

The plan calls for a 26-kilometer (16-mile) tunnel to deliver the water, with associated access roads, power lines and water treatment facilities. Importantly, the plan also requires a private agency to manage the water supply in the Kathmandu Valley in place of the inefficient and corruption-ridden Nepal Water Supply Corporation.

The plan called for completion of the Melamchi project in 2007. So far only part of the access road has been built. Delays caused by political bickering and frequent changes of government are partly to blame. The Maoist insurrection caused long work stoppages, and disputes with contractors led to several false starts. In the face of this, some donors withdrew and other money had to be found.

With contract and funding commitments due to expire early in 2007, the Nepal government last year created an independent water supply board, Kathmandu Valley Drinking Water Limited (KUKL), to hire a private water management company. KUKL received only one bid on its contract, from Severn Trent, one of the ten privatized English water suppliers, and it accepted Severn Trent's $8.5 million, six-year proposal. The company's fee is to be paid directly by the Asian Development Bank. With the original deadline already passed and an emergency extension of the ADB contract set to expire next month, Yami's refusal to approve the Severn Trent contract and the bank's threat to pull all its funding if the deal isn't completed immediately may kill the project.

Minister Yami points to Severn Trent's spotty record in England, where it has been convicted of overcharging customers and misleading regulators and where the government's serious fraud office is investigating the company. She also is reluctant to have a foreign company given the lucrative contract, and says she is confident that Nepali bidders would come forward if the contract were re-opened. Yami has also played up Severn Trent's announced plans to immediately double the effective water tariff for most Kathmandu Valley households.
No doubt those concerns are sincere. But the risk of having the long-planned and vitally important project collapse is so serious that she must have other motives too, ones that are vitally important to her. Cynics suggest that the prospect of renegotiating the contract and perhaps even the whole project, with attending lucrative commissions and kickbacks, is motive enough. Perhaps. But ordinary politics can explain Yami's action.

Consider the situation from the perspective of the long-time member of the Maoist politburo. The Maoist struggle continues in, as Prachanda said last week, "street, parliament, and government." There are big issues on the table: Maoist return of seized land, ethnic tensions in the south, reigning-in the Young Communist League, scheduling a date for elections, and a Maoist-led teacher's strike. Yami saw the Melamchi project as a big chip, and she has laid it down.
Whatever her other motivations, Minister Yami is playing power politics at the highest level with the Melamchi project. The move may already be bearing fruit: Shortly after she said that "other options" would become available even if the ADB and Severn Trent pulled out, Koirala approved funds to build 1,000 barracks-style buildings to replace tents in the Maoist cantonments. Revolutionary or not, Minister Yami clearly knows how to play the old game.

Source: News Blaze, May 25, 2007

Nepal's Terai MPs not happy with new commission

Though Nepal's coalition government announced the formation of a probe panel to investigate the violence in the Terai plains this year, MPs from the area said they were still not satisfied.The dissenting MPs have paralysed the parliament for over a month over the issue.At a cabinet meeting held Friday to discuss the various crises gripping the country, the council of ministers announced a five-member commission to probe the mounting violence in the Terai plains in which nearly 80 people have died.Headed by Supreme Court judge Khilraj Regmi, the commission also includes a lower court judge Janardan Bahadur Khadka, a senior police officer, deputy inspector general of Nepal Police Rabindra Pratap Shah, an official of the state intelligence department, Sukha Chandra Jha of the National Investigation Centre, and joint attorney general Raj Narayan Pathak.

The commission has been asked to submit its report within a month.Despite the formation of a commission, Terai MPs Saturday said they were not satisfied with the gesture and would decide if they should allow the house to proceed.The stalled house was scheduled to convene Saturday afternoon.Bijay Gachchedar, a powerful MP from the plains and former minister from deposed prime minister Sher Bahadur Deuba's Nepali Congress (Democratic) party, said the plains legislators would hold an emergency meeting to decide on their next move.'The formation of the commission doesn't address all our demands,' Gachchedar told IANS. 'Though meant to probe violence targeting the Madhesi community (people mostly of Indian origin living in the southern plains), it doesn't include a single Madhesi.'

Different Terai groups had been demanding the setting up of the commission for a long time. Prime Minister Girija Prasad Koirala's government was finally forced to announce the commission as MPs from the southern plains, cutting across party lines, have obstructed parliament proceeding since last month, vowing they would not allow it to function till their demands were met.With the house remaining paralysed for over five weeks, the international community began pressuring the eight-party alliance to resolve the impasse. This week, ambassadors from the European Union countries based in Nepal, one of the kingdom's biggest donors, met both Koirala and Maoist chief Prachanda to express their growing concern at the 'deteriorating internal political situation'.Besides the commission, the dissenting MPs are demanding that the government scrap an earlier commission formed to delineate fresh election constituencies, especially in the Terai belt.'We want a fresh census in Terai,' Gachchedar said. 'New constituencies should be formed only after that.'

Thousands of Terai residents have been living without citizenship for decades, owing to neglect of the belt by a succession of governments. As a result, they can't vote or hold government jobs.Though the Maoist guerrillas signed a peace pact last year, signifying an end to their decade-old armed uprising demanding a republic, a fresh movement began in the Terai plains with the Diaspora demanding higher representation in the government and greater rights.Although the new government began issuing fresh citizenship certificates, Terai residents say thousands still lack them.After weeks of stalling, Koirala has finally called a meeting of top leaders of the eight parties Saturday. Leaders of the alliance are expected to come up with a fresh date for the much-awaited election.They have to also decide how to end a strike that has closed down Nepal's schools for nine days now. Another task at hand is to find fresh donors to continue with an ambitious drinking water supply project that runs the risk of being grounded once the Asian Development Bank's financial commitment ends June 30.Last but not the least, they also have to find a way of combating an imminent fuel crisis as supplies from India dry out because the main fuel transit point at Birgunj-Raxaul will close down due to elections in Bihar.

Source: Malaysia Sun, May 29, 2007

Maoists bar Indian vehicles in Nepal

KATHMANDU: Nepal Maoists forced Indian vehicles to return to India, accusing its neighbour of encroaching upon Nepalese territory, a news report has said. Accusing India of encroaching upon Nepalese territory and alleging that Indian vehicles were plying in the Himalayan state illegally without paying any tax, Young Communist League (YCL), the Maoist youth wing, turned back at least 50 vehicles to India at the Pashupati Nagar customs point while taking out a rally on Sunday. Security has been beefed up at the Pashupati Nagar customs point along the Nepal-India border after Indian vehicles were forced to return to India. The situation was tense after around 100 YCL cadres shouted slogans such as "stop border encroachment," "down with expansionism" at the border point. Following the YCL activities, top Indian border security officials, expressing serious concern over the incident, have stepped up ‘inspections" of the bordering areas.

Source: The Times of India, May 29, 2007