Nepal Environmental and Scientific Services ( NESS ... and capacity...Nepal Environmental and Scientific Services (NESS) Thapathali, Kathmandu CONTENTS OF THE PRESENTATION SCENARIO

IPPAN Workshop, 12 April 2015, Pokhara

Salil Devkota, MD/ Environment and Social Safeguard Expert

Nepal Environmental and Scientific Services (NESS)Thapathali, Kathmandu

CONTENTS OF THE PRESENTATION� SCENARIO OF HYDROPOWER DEVELOPMENT IN NEPAL

� CHALLENGES IN HYDROPOWER DEVELOPMENT OF NEPAL (PROCEDURAL, TECHNICAL, FINANCIAL, SOCIAL)

� DISPUTES IN HYDROPOWER PROJECTS

� (COMPENSATION, LAND ACQUISITION, SHARES, GRIEVANCES)

� CASE STUDIES

� WHAT SHOULD WE DO TO OVERCOME OBSTACLES” FOOD FOR THOUGHT”

� QUESTIONS FROM FLOOR/DISCUSSIONS

Nepal’s Hydropower Potential

• Potential is huge theoretical 83,000 MW+ technically feasible 45,000 MW BUT COULD BE MORE THROUGH OPTIMIZATION !!!

• Growing demand for domestic consumption (beyond just household electricity) INDUSTRIES FOR NORTH INDIA

• Meeting needs of immediate neighbor and the region MEETING SAARC’s ENERGY SECURITY

Helicopter View of Energy Security

Afghanistan

Turkem inistan

Azerbaijan

UzbekistanKyrgstan

Tajikistan

Nepa lBuhta n

Bangladesh

Kazakhstan

DisputedTerritory

Pa kistan

Turkey

Iran

Qatar

Syria

Iraq

Jord

an

CHINAPR

4

Bangladesh

Mald ives

Srilanka

IndiaArabian Sea

Yem en

Om

an

Saudi Arabia

Qatar

•Highest population density with 22% of world population•All developing/poor nations, but rich in natural resources.•Large imports of fossil fuels•Low per capita electricity consumption, low access to electricity•Water scarcity during dry season and floods in rainy season•Large coal reserves in India and Pakistan, some reserves in Bangladesh•Gas and oil reserves in Afghanistan, Bangladesh, India and Pakistan•Large exploitable hydro power potential, 244080 MW (EH Countries 177826 MW).

Socio- ecom.Characteristics:

P HDP

5

Butwal- Gorakhpur TL

400/220 kVDuhabi Purnia TL400/220 kV

Proposed Naumure Project209 MW

Dhalkebar- Muzaffarpur TL400/220 kV Anarmani-Sigudi

400/220 kV

SK HDP

KC HDP

Rivers of NepalFor hydrological studies, Nepal is divided into four drainage basins

1. Sapta Koshi River basini) Tamor ii) Arun iii) Dudh Koshi iv) Likhu v) Tama Koshi vi) Sun Koshi vii) Indrawati.Indrawati.

2. Gandaki River basini) Trishuli ii) Budhi Gandaki iii) Marsyangdi iv) Seti Gandaki v) Kali Gandaki

3. Karnali River basini) Mugu Karnali ii) Humla Karnali iii) West Seti iv) Bheri.

4. Mahakali River basini) Chamelia ii) Surnagad.

Where is hydropower locked

W. Seti

Kar

nali

Mah

akal

i

Upper Karnali(300 MW)

Upper Karnali(300 MW)

Budhi Ganga(22 MW)

Budhi Ganga(22 MW)

Rahughat Khola(27 MW)

Rahughat Khola(27 MW)

CHINA

Mahakali BasinLegend:

Karnali Basin

Gandaki Basin

Southern Rivers Basin Koshi Basin

EDC, HMG/N

Kar

nali

BheriKali Gandaki

Trisuli

M arsayangdi

Burhi Gandaki

Arun

Tamur

Indr

awat

i

Sun Koshi

Dudh K oshi

Tama K oshi

BagmatiBasin

KankaiBasin

West Rapti

Babai

Sapta Koshi

NarayaniBhoteK oshi

Rapti

N

Likhu Khola(50 M W)

Likhu Khola(50 M W)

Tamur(101 MW)

Tamur(101 MW)

Mec

han

*KATH MANDU

Kabeli ‘A’(30 MW)

Kabeli ‘A’(30 MW)

Dudh Koshi(300 MW)

Dudh Koshi(300 MW)

CHINA

INDIA

Andhi Khola(5 MW)

Andhi Khola(5 M W)

Karnali (Chisapani)(10,800 MW )

Karnali (Chisapani)(10,800 MW )

Bhote Khosi(36 MW)

Bhote Khosi(36 MW)

Kali Gandaki-2(572 MW??)

Kali Gandaki-2(572 MW??)

West Seti(750 MW )

West Seti(750 MW )

Pancheshwar(6,400 MW ?)

Pancheshwar(6,400 MW ?)

Khimti Khola(60 MW)

Khimti Khola(60 MW)

Jimruk(12 MW)

Jimruk(12 MW)

Hydropower potentialRiver Basin/ Region

PotentialMW

Technical FeasibleMW

1 Sapta Koshi (East & Central) 22350 11400

2 Sapta Gandaki (Western) 20650 57252 Sapta Gandaki (Western) 20650 5725

3 Karnali & Mahakali (Far Western) 36180 26482

4 Southern Rivers 4100 1125

Total 83,280 44,724

CONSEQUENCES OF NOT BEING ABLE TO

HARNESS ELECTRICITY

Use of Petroleum Products for Electricity (Import)

Use of Petroleum Products: 17%Use of Petroleum Products: 17%

Use of diesel in Kathmandu : 60%

Source: Clean Energy Nepal, 2013

Historical Trend: Petroleum Import -----RISING

Comparison : Crude oil Vs. Electricity

Crude oil price-------Increasing trend

2010- US$ 100/barrel projection in 2030 : $200/barrel

� Cooking with electricity is cheaper recently for urban HH even with 20% electricity tariff in 2012HH even with 20% electricity tariff in 2012

� To completely substitute LPG imports in Nepal requires 850 MW extra thus saving Rs 25 billion annually

Nation’s Avoidable Import Cost (2014)

� Petro products for electricity : 20 billion NR

� LPG imports : 25 billion NR source: NOC, 2014

Challenges in Hydropower Development in

Nepal

� Technical

� Financial arrangements including lenders requirements

� Social and Environmental

Social� Social

� Compensation, Resettlement and Rehabilitation

�Benefit sharing; shares, others

�Other grievances

SOURCES OF RISK in Hydropower PROJECTS

> Natural peril, disaster

> Earthquake, fire

> Price, currency, interest rates fluctuation

> Inconvertibility of currency>Disable currency transfer> Change in law and legal

system> Political instability violence> Riot, strike, civil commotion

> Contractor insolvency

> Breach of contract

LEGAL/FINANCIAL

OTHER

MARKET/POLITICAL

> Earthquake, fire explosion

> Force majeur

> Riot, strike, civil commotion> Terrorism, war

>Handling/operation> Construction> Faulty design, lack of data

materials, workmanship> Reliability of feasibility study> Project performance> Supplier performance> Contractor performance>Defects > Alterations/betterments> Climate change

> Labor and working conditions

> Pollution >Health, safety and security

(community, employee)> Land acquisition and

involuntary resettlement> Biodiversity conservation &

sustainable natural resource management

> Grievances/Closures

TECHNICAL/OPERATIONAL SOCIAL/ENVIRONMENTAL

Compensation, Resettlement and Rehabilitation

Issues in Hydropower Development in Nepal

Generation Side

Hydropower Project require lands for Power house, ancillary facilities such as internal access house, ancillary facilities such as internal access roads, camps, construction yards, quarry and burrow pit sites etc.

Power Evacuation Side

Substations, RoW, APs,

TYPES OF LAND Require to Compensate and Acquire in Hydropower Project

Nepal mostly three Types of land:

�Private land

�Guthi Land

�Government Land

CATAGORIES OF LAND

The private Land Nepal Consist Three categories of Land

Private Land / Ghuthi Land Private Land / Ghuthi Land i. Paddy Land (Cultivated Land)

Abal, Doyam, Sim, Chaharii. Maize, Millet Land (Cultivated Land)

Abal, Doyam, Sim, Chahariii. Fallow Land

Process of purchasing private land for Project

� Direct negotiations with Land owners

� Nepal Government Land Acquisition Act 1977 (2034)

Process of purchasing private land for Project� Direct negotiations with Land owners

� Nepal Government Land Acquisition Act 1977 (2034)

Direct Negotiations with the landowner (Process)

� Prepare land acquisition report.

�Obtain cadastral map from survey office.

�Superimpose location of project component in cadastral map.

�Identification of landowners, area, types of land etc.�Identification of landowners, area, types of land etc.

�Obtain required sheet no from District Survey Department.

�Field visit by surveyor from District Survey Department.

�Obtain Field book copy from District Survey Office. (Note to identify the name of the landowner,(private/Government) location area of the land, land type)

�Verify the field book details at land revenue office.

Procurement of land� Collect required documents (Land registration

certificate, Citizenship certificate, Pay receipt of land tax, VDC recommendation letter).

� Prepare Registration form at District Land Revenue Office.Office.

� If land is purchased partially from one plot no. then Land Revenue office orders to District survey office for separation of land parcel (Kitta Kaat).

� Survey office separation of land parcel and send document to DLRO.

� Pay cash to owner and registration fee @ 2% To Government.

Land procurement process

� Notice to land owners/ concern Government authorities (CDO office, District Land Revenue office, District Survey office etc.).

� Preliminary meeting with land owners (General).

� Obtain the rate for various categories of lands from � Obtain the rate for various categories of lands from Land Revenue Office (Malpot Office).

� Call all the specific landowners in the negotiation for land price or rate.

� Fix the rate with all the land owners.

� Prepare minute and get signed for the rate agreed by the owners.

� Estimate the total land cost.

Procurement of land� Land procured .

� Land registration certificate received for the procure Land.

� Land Acquired. � Land Acquired.

Government Land ……….� Ministry of Forest will submit the document to council

of ministers for receive approval

� Decision of council of ministers for given authority to use of forest land for project and send the file to use of forest land for project and send the file to Ministry of forest

� Ministry of forest recommendation to Department of forest for lease agreement.

� Department of forest made lease agreement

� Signed the agreement for land use for project.

Nepal Government Land Acquisition Act 1977 (2034)

� Prepare detail of land acquisition report

� Application to department of Electricity Development (DoED) for Land Acquisition;

Application should include:

• Generation License or project development agreement.

• Company Registration certificate

• Tax/ VAT Registration certificate

• Memorandum of Association and Article of Association of the Company

Issues related to

compensation, land acquistionLand acquisition turning in to a major problem for

infrastructure project

Examples:- Track opening of Kathmandu-Terai fast track (high compensation - Track opening of Kathmandu-Terai fast track (high compensation

demands in Makwanpur where 40% land passes 40% through public land

- Day ports in Larcha near tatopani (demanded 5 lakh/ropani, GoN 1 Lakh, GoN decided to relocated in Panchkhal , people agreed 210000/ropani

- 132 KV TL around Kathmandu valley (obstruction by locals in Harissidhi)

� Substation (220 kVA) for Kali Gandaki Corridor TL (Dana to Kusamsubstation 40 KM apart) has been delayed due to dispute over land acquisition.

� Locals have opposed the land acquisition of land on the banks of KG River to built SS, MoE started land acquisition for 100 ropanies of land , problems emerged after ownership dispute over 50 ropanies of land.

� Project affected: Rahu ghat (42 MW), Ghar Khola (8.5 MW), KG Gorge (146 MW), Ghlaemdi (4 MW), Thopal Khola (11 MW), KGUHPP (65 MW) etc

� Six towers in Sindhuli couldn’t be completed (reason: some people

already bought the land on low cost and bargain with NEA for higher compensation)

Access road construction in Melamchi WS project (demand for more � Access road construction in Melamchi WS project (demand for more compensation for land and asset for already existed structure)

� Obstruction in many ongoing hydro projects related to compensation and resettlement

Likely reasons for stoppage due to

compensation, land acquisition related issues� Non Existence of Basin Wise Planning, Cumulative Impact Assessment (CIA)

� Absence of Government Plan, Policy to avoid land acquisition/environment conservation (Kabeli TL 132 KV Damak-Godak, instead of 220-440 KvA)

� Delay in securing timely clearance from forest departments, � Delay in securing timely clearance from forest departments,

� Flaws in GoN documentation (Land survey office, area of land, kitta, ownership, location in record doesn’t match with reality), missing data at LRO (Ex: Bhairavsthan VDC-Acham District- Upper Karnali HEP 900 MW)

� LAA lacks several practical aspects (min compensation in RoW of TL)

� Trend of registering land in lower grades than actual to avoid higher “tax/tiro”

� Land ownership related issues (tilling without entitlement for years)

� Improper assessment during studies (RAP, SIA)

� Mismatch between LAA and funding agency requirements is confusing, creates blurred vision and establish ad-hoc mechanism “case by case basis”

� Ad-hoc or irrational decision creates “ripple effect”

� (loss compensation: fruit trees compensations, compensation for houses for crack during road construction, compensation for fisheries due to turbidity in Melamchi River)

� Improper communication, political interference/influence, CFC influence resulting in biased decisions

� Non scientific valuation for compensation (ex: market area –non market area)

� Comparing and trying to get best practices even in GoN funded projects for which GoN staff, CFC doesn’t have leverage to follow it.

� Non transparency by project (hiding information, indirect benefits)

� Forceful acquisition (Poor/vulnerable, women headed, deprived)

� So called smarter folks “traders”/local elite/Gundas”

� Improper and miscommunication based on baseless relaity, cheap popularity

� Loose talk by project personnel, consultant, donors

� Misinterpretation and issues flared up by media

� Poor project PR, understanding, communication with broader stakeholder consensus (stakeholder mapping)

� Bargaining means for other interests – entering in to interest based negotiations

� Actual Vs. Greed

Requirements Force you to follow: Labor camp

situation earlier in one of the HPP

Present situation after IFC involvement

National Policy on Land Acquisition, Compensation and Resettlement in

Development Projects in Nepal (formulated 2006, awaiting cabinet approval on 2015)

� Although this policy has still not been converted to addressed in the form of an Act with operational regulations, it outlines a national land acquisition, compensation and resettlement safeguard regulatory framework which combines both national and international best resettlement practices. resettlement practices.

� This document is at least indicative of the government’s orientation and commitment to update the national land acquisition, compensation, and resettlement regulatory framework to the standard of international best practices.

The Policy’s has the following guiding principles which broadly meetinternational best practices in involuntary resettlement:

� Appropriate and adequate compensation for the loss of assets or income is a fundamental right of all project-affected persons. Physically displaced people must be relocated with facilities such as school, health, and postal facilities.must be relocated with facilities such as school, health, and postal facilities.

� Vulnerable groups such as Janajati/Adivasi, Dalits, landless, women, especially women-headed households, disabled, poverty groups and senior citizens are entitled to special benefit and assistance packages in addition to compensation and resettlement.

� All project-affected-persons should be assisted to restore at least their pre-project income and livelihood sources.

� The absence of legal title to land should not be a bar for compensation, resettlement and rehabilitation assistance.

� The draft Policy has established a range of entitlements for those affected by a development project:

� Cash compensation at full market value (equivalent to replacement cost) for all acquired land. If the provision of replacement land is not feasible, with the stipulation that a person who becomes a marginal landholder as a result of land acquisition should be provided with replacement land of equivalent productivity or value;

� Cash compensation at replacement cost for the loss of all structures (residential, business and other structures), with no deduction for depreciation or for salvageable materials; or provision of a replacement house;

� Cash compensation for privately owned trees based on the annual value of the produce for 15 years;

� Compensation for loss of income from rented buildings;

� Cash compensation for loss of standing crops; and

� Compensation to registered tenants and sharecroppers, equivalent to 50% of the compensation for the acquired area of land and lost crops.

Rehabilitation measures proposed by the Policy include:� •Proper resettlement planning, including developed relocation sites

with amenities and at least with easy access to amenities;

� For resettled farming communities, homesteads sites of sufficient size for storage of agricultural produce, keeping of livestock and for kitchen for storage of agricultural produce, keeping of livestock and for kitchen gardens;

� Employment on the project, where possible, at least one member of each affected household, with half of the employment opportunities reserved for women; and

� Additional relocation and rehabilitation support measures, particularly to displaced households, severely affected households, women and vulnerable people.

Squatters and Non title holders

� The Policy states that squatters and non-titled landholders are not entitled to compensation for the land they occupy.

� However, those who have earned their livelihoods from access to or use of the land for more than three years prior to the project’s compensation cut-off date should, wherever possible, be provided with replacement land on a lease basis. They should also be assisted in their efforts to legalize their tenure in order to qualify for compensation under the project.

Comparison between National Regulatory

Framework and Best Practices

Common

� Both permanent and temporary involuntary resettlement shall be avoided to the extent possible or minimized where feasible, exploring all viable minimized where feasible, exploring all viable alternatives project designs.

� Where displaced is unavoidable, people losing assets, livelihood, or other resources shall be assisted in improving status at no cost to themselves.

Gaps : National Vs InternationalInternational Best Practice National Regulatory

FrameworkHow to fill gaps

Compensate all affected structures, crops and other developments on land acquired regardless of it legal ownership

Legal ownership is required for compensation; however, registered tenants with the Land Revenue Office are also acknowledged. The national Policy meets this requirement: but it is still not the law to apply.

This is a key safeguard principles of the national Policy; at least for ADB funded projects, this requirement is mandatory

Consultations with all PAPs to obtain their views, suggestions and complaints

Consultation takes the form of official information distribution through notices and requesting to submit complaints and grievances

This issue is discussed in the Policy (2006); this mandatory for projects funded by ADB

Compensation for affected assets at replacement cost

Compensation rates are decides by CFC or through negotiated settlement. ‘Market value’ is calculated based on rules already given rather than careful examination of current values.

The comparison between replacement cost, market value and CFC rates are to be examined case by case. The Policy provisions for the payment of replacement cost as compensation

PARADIGM SHIFT: CONVENTIONAL TO STRATEGIC ORIENTATION

� REFINE POLICY AND UPDATED ACT

� STRONG POLITICAL COMMITMENT

� GOOD GOVERNANCE

� GOOD PROJECT MANAGEMENT, EFFECTIVE PR, AND FOLLOWING R&R � GOOD PROJECT MANAGEMENT, EFFECTIVE PR, AND FOLLOWING R&R APPROACHES

� FROM LANDLESSNESS TO LAND-BASED RESETTLEMENT;

� FROM JOBLESSNESS TO REEMPLOYMENT;

� FROM HOMELESSNESS TO HOUSE RECONSTRUCTION;

� FROM MARGINALIZATION TO SOCIAL INCLUSION;

� FROM INCREASED MORBIDITY TO IMPROVED HEALTH CARE; � FROM INCREASED MORBIDITY TO IMPROVED HEALTH CARE;

� FROM FOOD INSECURITY TO ADEQUATE NUTRITION;

� FROM LOSS OF ACCESS TO RESTORATION OF COMMUNITY ASSETS AND SERVICES; AND

� FROM SOCIAL DISARTICULATION TO REBUILDING NETWORKS AND COMMUNITIES

Dam site and resettlement area : Before and After Dam site and resettlement area : Before and After

at MMHEPat MMHEP

44

Example: Budhigandaki HEP (1000 MW) Project Total Land

Requirement other Losses

SN Land Requirements

Land

Requirement

Category Land Use (ha)

Cultivated land

Settlement Orchards Forest Bush Land

Grass

Land

Barren

Land Sand

Water

Body Total Low Land Upland Cliff

1Reservoir and Dam body Area Permanent 1992.49 1124.72 30.21 18.94 1704.92 621.76 222.24 2.87 4.06 538.21 378.88 6639.291Reservoir and Dam body Area Permanent 1992.49 1124.72 30.21 18.94 1704.92 621.76 222.24 2.87 4.06 538.21 378.88 6639.29

2Powerhouse Area Permanent 14.72 0.00 0.00 0.00 12.96 0.98 0.00 0.00 0.00 1.07 5.09 34.82

3Ancillary Facilities Area Permanent 0.00 16.86 0.00 0.00 5.07 3.63 0.00 0.00 0.00 6.43 6.27 38.26

4Batching Plant and Storage Area Permanent 0.00 0.00 0.00 0.00 4.30 0.00 0.00 0.00 0.00 0.00 4.30

5Aggregate Quarry 1 Permanent 0.00 0.00 0.00 0.00 7.42 7.61 0.00 0.00 0.00 0.00 0.00 15.03

6Aggregate Quarry 2 Permanent 0.00 0.00 0.00 0.00 21.61 0.00 0.00 0.00 0.00 0.00 21.61

7Access Roads Permanent 3.64 0.00 0.00 0.00 9.08 2.74 0.00 0.00 0.00 0.02 0.05 15.52

8Burrow Pits - Aggregate and Sand Temporary 0.00 0.00 0.00 0.00 0.00 0.43 0.00 0.00 0.00 16.62 0.00 17.05

Grand Total 2010.85 1141.58 30.21 18.94 1765.36 637.15 222.24 2.87 4.06 562.36 390.28 6785.88

Displaced Infrastructure BGHPP Nos/Length

Total built Structure (Houses and sheds) 11228

Public Educational Institutions (Nos) 23

Other service infrastructures (health posts, police post,

post office, community halls etc) Nos

64

Temples and Shrines (Nos) 62

Motorable Road (km) 131.95

Motorable Bridge (Nos/m) 6 (453)Motorable Bridge (Nos/m) 6 (453)

Suspension Bridges (Nos/m) 30 (2288)

Cremation Sites (nos) 44

Irrigation canal (km) 42.17

Budhigandaki HPP

Land Records and Estimated Affected HHs

District No of Land

Parcel

Physically

displaced*

Covered by

Census

Survey**

Economically displaced

***

Economically

Covered by

Census

Survey***

Gorkha 11198 2150 100% 2150 90%

Dhading 12819 2025 100% 2075 92.5%

Note: Total Numbers of HHs covered by Census Survey till date 7678. Final figures of the affected HH will be available only

after analysis of Survey Data after approximately 3 months.

*Estimation based on number of Total structure (counted from LiDAR Ortho-photomap) and sample observations of total

number of land parcel ownerships

** Census survey has ensured that all structures owners have been identified and surveyed.. Actual HH numbers will be

verified after analysis of filled questionnaires

*** Estimations based on sample observation of total number of land Parcel ownership in the area. To be verified based on

land record data and census survey covered HHs

**** Estimated to be verified

Dhading 12819 2025 100% 2075 92.5%

Total 24017 4175 100% 4225 91.5%

Total Population 17953 18176

Relocation Sites - On Site BGHEP

Arughat 1

Resettlement and Rehabilitation

� Resettlement and rehabilitation of the physically displaced HHs is one of the key issue of the Project

� Relocation of affected institutions, temples, shrines and other service infrastructure is the other issue as it should address physically displaced HH and uphill communities using these infrastructures and location significance of temples and shrines

Resettlement choices and Preferences Options floated for preferences

� Land for Land and house for house option (Option 1): This option does not foresee cash compensation for the land and house except supporting rehabilitation measures for livelihood restoration. Equal quality or better quality land and housing is provided for resettlement and rehabilitation;

� Developed Land Parcel for Housing (Option 2): This option foresee development of resettlement village with all support facilities such as motorable road connection, piped water, electricity, telecommunication, educational institution, health institution, community hall etc within the village. The land plot is provided in such developed village for housing, while compensation to the lost property and land is provided at the replacement cost to the affected households. The households will build their and land is provided at the replacement cost to the affected households. The households will build their house within the plot. Besides, the affected are provided with rehabilitation assistance for livelihood restoration.

� Developed Land Parcel for Housing with a Market Area (Option 3): This option is similar to the option 2, but such developed village will have a developed market area for people to initiate their own shops.

� Developed Land Parcel for Housing with an Industrial Area (Option 4): This option is similar to Option 2, with provision of land areas for industrial development. The industrialists are invited to develop industries where the affected people are provisioned for industrial employment.

� Cash Compensation only and resettlement and rehabilitation by themselves (Option 5): This option provides cash compensation to lost land and property at replacement cost with additional rehabilitation measure cost. The affected people will manage themselves for resettlement and rehabilitation.

� Any other option of the people Choice (Option 6): People could propose their own options other than the Option 1 to 5.

Resettlement choices and

Preferences � For each of the above options, the participants could make

choice for:

� Local Area (within the project VDC or districts), or

� Outside Area (Out of the Project VDCs and Districts

� For each of the above option again, participants could make choice for

� Together as a village unit in one place, or

� Separately not as village unit

Resettlement choices and Preferences

SN Resettlement Options

Priority Ranking ( 1= High Priority, 5= Least

Priority)

1 2 3 4 5 Total

1 Land for land 8.1 13.5 13.5 24.3 40.5 100.0

Settlement Plot with all

2

Settlement Plot with all

basic facilities 11.1 11.1 36.1 30.6 11.1 100.0

3

Settlement Plot with all

basic facilities and market 8.3 38.9 27.8 11.1 13.9 100.0

4

Settlement Plot with all

basic facilities and

industrial area 50.0 19.4 13.9 13.9 2.8 100.0

5

Compensation only,

resettlement by own 21.6 18.9 18.9 10.8 29.7 100.0

Resettlement Choices and

Preferences

SN Resettlement Options

Choice of Resettlement Place

Locally Outside Total

1 Land for land 64.9 35.1 100.0

2 Settlement Plot with all basic facilities 66.7 33.3 100.0

Settlement Plot with all basic facilities

3

Settlement Plot with all basic facilities

and market 63.9 36.1 100.0

4

Settlement Plot with all basic facilities

and industrial area 63.9 36.1 100.0

5

Compensation only, resettlement by

own 62.2 37.8 100.0

Overall 64.3 35.7 100.0

Rights and privileges of the local people

• Up to 10 % equity share for local people

• Electrification in the area of ½ km radius of head-

works and powerhouse

Policy Initiatives- Features of Electricity Bill …..

works and powerhouse

• Free 20 units of electricity

• 52 % of the royalty goes to the local government

Shares in Hydropower Project� Chilime model attracted the larger population and in

setting their “mind set”

� The IPOs is issued or in process by several other developers like Sanima, Ridi, Barun, Upper Tamakoshi.developers like Sanima, Ridi, Barun, Upper Tamakoshi.

� Chilime floated 636000 unit to project affected VDCs Goljung, Syapru, and Chilime VDC (face value of Rs 100/share)

� 624000 unites to locals of other 15 VDCs in Rasuwa (@Rs324/share, where Rs 224 is premium)

Amended securities registration and issuance regulation

2065

� Hydropower company must float shares for the locals before they open the issue for general public

� A company has to float a min of 30 percent of the � A company has to float a min of 30 percent of the shares to public and out of the 30 percent, 5 has to be set aside for the company’s staff, 10 percent for the locals and remaining 15 percent will be floated to the general public. The locals shares have a lock in period of three years.

Upper Tamakoshi IPO worth Rs

5.18 billion3 phases:1) members and employees of the employees provident

fund, employees of UTPHO, NEA, Nepal Telcom, Citizen Investment Trust and Rastriya Beema Sansthan

2) 10% of the shares will be issued to local residents of Dolakha district

3) General Public

There are PROs and CONs in share investment of hydropower project

� Raise public capital through initial public offering (IPO)

� The Pros and Cons of each hydropower company their investment, planning, other portfolio, and risk must be calculated by investors. The immediate investment by UTKHP? investment by UTKHP?

� People need to be aware of the project’s anticipated timelines for pre-construction activities, construction period, and actual generation. Tied to these are important questions whose answers potential shareholders have a right to know. Questions like when are shares going to be made available for sale, what kind, to whom, and at what price? What is the loan pay-off period? When can I expect to see my first dividends arrive? How are the dividends going to be structured? Will I have voting rights? What happens if the company goes bankrupt? And so on and so forth. (ref: Tamot, IBN)

Issues of Shares in Hydropower constructed prior

enactment of policy or regulations ?

News: Bhotekoshi row resolved, locals get 6 pc shares

Since there is no legal procedures for a private company to issue shares, an appropriate legal mechanisms would be worked out, and that the shares would be given to a company representing the residents of Sindhupalchowk

� Local Right ? Where ownership of natural resources?� Vests with local people? Who are local people?� How that ownership administered?

If So, why government issue license? Why not to locals?

What is required?

� Learn from international experiences Tanzania’s “-Sovereign Wealth Fund (SWF) and other examples

� SWF for “future generations”, investing in development projects, which able to address whole country rather than individual.

� SWF able to address negative externalities

� Society have to have a rule based on management and governance.

Issues of Benefit Sharing from Project Examples:

� Brazilian legislation on revenue transfers from the power sector to the Federal government, States and Municipalities: the Itaipu Project

� Colombian legislation on revenue transfers from the power sector to regional environmental agencies and municipalities: The Urrá 1 Projectregional environmental agencies and municipalities: The Urrá 1 Project

� Proyecto Hidroamazónico (PROHA): the Jondachi Hydroelectric Project

� Norwegian legislation relating to taxes and license fees: the Glomma and Laagen

� Basin Development and the Tokke Project� Columbia Basin Trust: the Duncan, Keenleyside and Mica dams� Hydro-Québec’s approach on partnership with aboriginal communities

� Minashtuk Project

� •Hydro-Québec’s approach on partnership with aboriginal communities: the

� Toulnustouc Project• Paix des Braves agreement between the Government of Québec and the Grand

� Council of the Crees: the Eastmain-1 Project and the Eastmain-1-A and Rupert� Council of the Crees: the Eastmain-1 Project and the Eastmain-1-A and Rupert

Diversion Project

� Chinese legislation on post resettlement and rehabilitation for hydropower

projects: the Shuikou Project

� Hubei Hydropower Development in poor areas

� Nepalese legislation on the payment of royalties to districts and villages: the Kali Gandaki Hydropower Project

� • Lesotho Fund for Community Development

NEPALESE LEGISLATION ON THE PAYMENT OF ROYALTIES TO DISTRICTS AND

VILLAGES:Example of KALI GANDAKI HYDROPOWER PROJECT

Key issue addressed:� Revenue transfers to provide additional long-term compensation to project-

affected populations

Integration of :� The 1992 Hydropower Policy in Nepal and the 1992 Electricity Act have also � The 1992 Hydropower Policy in Nepal and the 1992 Electricity Act have also

required hydropower projects above 1 MW to obtain a license and pay royalty to the government

� In 1999, the Local Self-Governance Act and Local Self-Governance Regulationsrecognized the necessity to redistribute part of the royalty to communities in thevicinity of the project since these communities contribute to the project benefits

by sacrificing their access to or use of land and other resources in the project-affected area. The regulations require that the central government allocate 10% of the hydropower royalty to districts where the hydropower project is located.

� In 2004, the second amendment of the Self-Governance Regulations increased the district’s share of the royalty to 12%. It also required the central government to distribute another 38% of the hydropower royalty among districts of the development region where the hydropower project is located.region where the hydropower project is located.

� In addition, the 2001 Hydropower Policy specifies that 1% of the royalty shall be provided to the Village Development Committees (VDC) that are directly affected by the hydropower infrastructure with the sole purpose of expanding village electrification of these VDCs.

� The legislation does not specify how such amounts should be spent and how it should be distributed within a district. Some district receives huge royalty example: Makwanpur.

� It should be taken as positive step, however norms and guidelines should be developed

� Guidelines in use and distribution of hydropower royalty should be clearly spelled out to protect people affected by hydropower project which should be in line with LSGA.

� Such royalty should also address PES.

Way Forward

� Stable Government, Good Governance, strict law and order situation� Integrated River Basin Development-Basin Optimization � Larger River Strategy� Couple of River Off limit (CIAs)� Practical /Implementable LARP� Maintaining consistency among LARP policy to avoid “ripple effect”� Maintaining consistency among LARP policy to avoid “ripple effect”� Proper project management, champions should run the show in PR, LARP� Development and Implementation of effective model of benefit sharing mechanism � Improvements records and data of land revenue offices� Sincerity and professionalism of professionals during survey� Maintain honesty, ethics and moral values� Coordination between developers, checking for design consistency between projects� Power Evacuation Lines � Educating people on shares and benefit sharing� Transparency , effective communication, and grievance redressal mechanism

There is no shortage of disputes in HPPPositive Pay Off from Conflict- Experimental learning- Internalization of the problems by parties of conflict- Vigilance and self appraisal- Wider participation and decision making- Wider participation and decision making- Let champions drive the process

In summary,- Conflict is inevitable: like human disease you can’t eliminate

them only way out is cure them- Focus on : interpersonal skills (leadership, communication,

motivation, team work, participation)- Follow mutual gain approach of conflict resolution.

Thank you