Seal the deal

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    PTA with India

    During the Nepal visit of Indian Prime Minister Narendra Modi in early August, one of the key agreements between the two countries was to conclude Power Trade Agreement (PTA) and Power Development Agreement (PDA) within 45 days, to harness Nepal’s hydropower potential to the advantage of both countries. Those interested in hydropower follow this development with eagerness, associating credibility of the two prime ministers and their countries on whether such agreements really take place within the given timeframe. 

    That Modi hit right buttons through the visit to reset Nepal-India relations is a foregone conclusion. Although no major agreements were signed, Modi’s initiative propelled the level of trust between the two countries to a new space of potentially zero-problem, creating opportunities to break out of several bottlenecks, creating new agreements and reviewing old ones. But has the momentum been maintained? With the fast approach of the deadline, what’s the progress on PTA, PDA front?
    Following up with the prime ministerial commitment, Nepali parliament’s Water Resources Committee on August 18 asked Energy Ministry to produce every document related to PTA, together with Nepal government’s response back in June to an earlier Indian proposal. The Committee also instructed Energy Minister Radha Gyawali to present in the parliament a progress report on the proposed agreement. Additionally, National Planning Commission Vice Chairman and the officials of Nepal Investment Board were invited in the committee to deliberate on Upper Karnali PDA, to be signed with Indian builder GMR. 

    PDA+PTA

    At this stage, with the deadline barely a couple of weeks away, roadblocks are visible from both the Nepali and Indian sides, not only hindering advancement of the deal, but also signaling the danger of a premature death of such a significant agenda. 

    First, let’s talk about the Nepali side. Ten small left parties, including Mohan Baidya-led CPN-Maoist, aim at the revival of their otherwise evaporating political future in opposition to the agreements, and have cobbled an alliance. Give them anything, they would find an excuse to counter it. They stayed out of the democratic elections, yet they demand sharing of state power. They get the basics of democracy wrong. Therefore, a win-win agreement, upholding Nepal’s national interests as well as India’s, must be reached, without giving much credence to what this bunch of political leaders say. Pragmatism would suggest that any accord of this nature cannot be one-sided. 

    Nepal government’s own response to the proposals is not helping. In the first place, it gave the issue a relatively low profile. That is okay but the hush-hush around the agreement brewed further doubts, pushing the government to the fence. Now, the timeframe promise cannot be kept without an apposite intervention of Prime Minister Sushil Koirala. 

    The bigger problem, however, seems to be with the Indian side. Their bureaucracy’s preoccupation with Bhutan in the neighborhood prevents them from exploring further horizons. What they fail to internalize, despite accepting it in words, is that Nepal-India relations are already special and need no other benchmark. 
    In Nepal, at least a low-intensity debate persists about the nature and scope of proposed power agreements. In India, it is totally missing. Modi spoke and went back and that’s the end of the story. Indians rather appear to be talking up the open-ended revision of 1950 Treaty of Peace and Friendship, mostly stung by Nepal’s desire to remove the defense clause. Many in Nepal aware of India’s way of handling bilateral issues regard this as ‘constructive deviation’, applied to make room for the passage of close-ended commitment in PTA and PDA. 



    Second problem with India remains rather deep-rooted and has further implications. Despite enough indications of Modi being in-charge of the state of affairs, South Block seems to relish the continuation of extra-legal syndicate in Nepal-India relations. Apparently this syndicate, comprising a handful former ambassadors and a couple of ‘experts’, praises Modi’s way of work. But in practice, since the office of the prime minister cannot monitor everyday affairs, it operates with old-school mindset, including on shaping the Indian response to PTA and PDA. 

    One of India’s old-school preaching on PTA with Nepal is interesting. It says India is the natural buyer of Nepal’s excess hydroelectricity in the future even without any PTA; and signing the agreement, guaranteeing Indian market for Nepali electricity, would place Indian companies at a disadvantage in a competition with China and the West to generate hydropower in Nepal. 

    This is malicious as reality is otherwise. Hydropower requires high end investment. Western companies in Nepal have no big projects in the pipeline, in contrast to the 14,000 MW (Pancheshwar included) generation license issued to several Indian companies and about 6,000 MW to the Chinese. That there was no big or medium size project to offer to Modi for immediate construction during his visit was an indication that licenses for most of the feasible big projects have already been issued. PTA will not change this significantly. 

    The narrative of Nepal’s much sought-after economic growth hinges on the country’s hydropower potential, also possibly capable of removing “India’s darkness”, as enunciated by Modi. For this to materialize, both countries should communicate through their bureaucracies the significance of proposed agreements. Prime ministerial intervention in both countries, mainly in India, would be really helpful in meeting the deadline. It would be great to see Prime Minister Koirala picking up the telephone to seize the initiative this time. 

    The historical relations between Nepal and India now have potentially zero problems. India’s foreign policy wonks must come to terms with modern day reality, in line with their prime minister’s path-breaking address to Nepal’s parliament, rather than try to take our relationship to the old Nehruvian days of ‘divide and rule’, or to glide it towards the impracticable path of Bhutan. 

    The author “TIKA P DHAKAL is a political analyst and co-author of ‘From a Buffer towards a Bridge: Nepal’s new foreign policy agenda’
    tikadhakal31@gmail.com

    Source : Republica