Given the less-than-rosy nature of Indo-Nepal ties, it wasn’t surprising that Kathmandu failed to warm up to Indian External Affairs Minister Pranab Mukherjee when he dropped by last month. Most Nepalis acknowledged him with the measured scepticism usually reserved for all visiting officials from India. And why not? Such visits follow a set routine: a hyped-up arrival, a few open-ended agreements and a departure amid mutual commitment to age-old friendship.
But the politics of rhetoric could be changing at last. On January 29, after three days of hectic talks that often stretched late into the night, Nepal’s Foreign Minister Prakash Chandra Lohani and Mukherjee initialled the new treaty on Tanakpur as Nepalese Prime Minister Sher Bahadur Deuba and his entire cabinet looked on with satisfaction. The treaty will bring the neighbours on an equalfooting for the first time over the most ambitious project yet in the history of bilateral cooperation. The agreement will receive the final stamp of approval when the prime ministers of the two nations sign the treaty during Deuba’s visit to New Delhi on February 12.
"It will open a new era of cooperation," said Mukherjee. "Most significantly, the new treaty defines the shape of Indo-Nepal ties in concrete terms," Lohani told Outlook. The agreement gives Nepal far more bene-fits than decided upon earlier, and is part of a comprehensive treaty on the integrateddevelopment of the Mahakali river. It effectively puts an end to the five-year stalemate over the Tanakpur Barrage. Under the umbrella agreement, the 4,000-plus MW Pancheswore hydel project is to be built on the Mahakali in west Nepal, and is expected to cost upwards of $5 billion. The Integrated Development Treaty overrides all previous treaties on the frontier river. Separate provisions have been made for the existing Sharada Barrage and Pancheswore.
The treaty grants Nepal equal rights on sharing of waters and other benefits accruing from all future projects on the Maha-kali. From Tanakpur, besides tripling the power supply to 70 million units of electricity, India will also double its water supply to Nepal from 150 cusecs to 300 cusecs. India’s disproportionately large claim over water resources in some frontier projects had earlier angered most Nepalis.
Nepal’s communist parties, particularly the CPN(UML), the largest party in Parliament, have successfully played the nationalist card to gain electoral ground on the issue of sharing water resources with India. "Even now, if the idea of equitable sharing is just a strategic move on the part of India to secure Pancheswore, there are reasons to be sceptical," says Sridhar Khatri, a political science teacher at Tribhuvan University.
The genesis of the Tanakpur controversy dates back to 1991, when the then prime minister Girija Prasad Koirala signed the Tanakpur agreement—which gave India 2.9 hectares of Nepalese territory for the Indian-built Tanakpur Barrage. He was accused by the Opposition of compromising national interests and "handing over Tanakpur to India as a gift". Their claim: Koirala got too little in return. In 1993, the Nepali Congress government was told by the Supreme Court that it would have to seek a parliamentary ratification, which has remained elusive ever since.
This time, all parties have admitted that the recent breakthrough has been possible due to the newly-forged national consensus. "It’s a lesson to Nepal’s political parties. You need a modicum of understanding, at least, in matters relating to foreign policy," says Khatri.
"The new treaty is definitely a better agreement than the previous one," observes Yadavkant Silwal, former SAARC secretary-general. "The ruling coalition must be commended for hammering out the ever-elusive national consensus...it’s a pointer to a good future as far as Nepal-India ties are concerned. Nepal is finally getting rid of its India-paranoia and India, on its part, is becoming increasingly accommodating towards its neighbours." The thaw should now extend to areas like trade, he adds.
But sceptics remain. Deepak Gyanwali, a noted hydro-power expert, describes the treaty as a political sleight of hand. "It is not a national consensus but a mere face-saving act on the part of political parties." Instead of resolving the Tanakpur issue in isolation, the new integrated approach has dragged a much larger project into the controversy, while leaving a number of questions unanswered, say the critics.
They cite the huge difference between Nepalese and Indian claims over the Panch-eswore project’s estimated output. While a Nepalese detailed project report (DPR) says the river can generate 6,000 MW of power, an Indian DPR puts the output at 4,000 MW. Critics ridicule plans to prepare a new DPR in six months and a detailed engineering study in another 18 months. The project itself is to be completed within eight years.
People like Khatri are worried by the euphoria the accord has created. "We seem to jump from one extreme to another," he remarks. "Once it was hopeless inaction and now it’s over-excitement. Good foreign policy is marked by cautious optimism."