India-Nepal Power Trade Agreement yet to kick-off

 The Dollar Business Bureau The India-Nepal Power Trade Agreement (PTA) reached between Nepal and India in September 2014 is yet to take a shape. According to a report by IPCS (Institute for Peace and Conflict Studies), the PTA much touted as the most significant achievement of the 18th SAARC summit authorises the two neighbours to develop transmission interconnections, grid connectivity, power exchange and trading through governmental, public and private enterprises on mutually acceptable terms. It also allows licensed electricity producers, buyers and traders from both countries to engage in cross-border electricity trading, including via power exchanges, and to seek cross-border transmission access as per the laws of the respective countries. The report said, this is not the first time Nepal has entered into agreement with India vis-à-vis power trade and water sharing. There are multiple water sharing treaties that have been signed in between between the two from the 1950s to the 1990s; and they too were lauded and considered as path-breaking as the 2014 PTA. However, in the long-run these treaties have proven to become major bones of contention between India and Nepal. For instance, vis-à-vis the Koshi Treaty (1954) and the Mahakali Treaty (1996), there still remains contention regarding two principal issues: water rights, and the question of the management, control and operation of the barrages, the report added. Additionally, information-sharing and co-operation on water issues is also crucial. This was particularly due to high ambition coupled with a lack of vision and cooperation from both ends. Therefore, it is important that the two countries seek to arrive at a common framework of perspectives on this subject. As the first step, joint mechanisms need to be evolved for water management and control. An inclusive approach would forge trust and make both countries accountable, the report concluded.    

This article was published on March 28, 2015.