Nepal's new water bill redraws federal powers, tightens river and dam oversight

Nepal is poised to overhaul its water resource management with a new bill designed to harmonize with its federal governance structure. The proposed legislation aims to replace the 30-year-old Water Resources Act, 1992, by clearly defining the roles and responsibilities of federal, provincial, and local governments.

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Several provisions undermine the spirit of federalism by keeping key decision-making powers concentrated at the centre.

The bill introduces stringent provisions for water usage, environmental protection, and dam safety. Key measures include a mandatory water accounting system to track availability and utilization, and comprehensive assessments of all water sources. It also requires authorities to allocate water for religious, cultural, and ecological needs alongside allocations for drinking water, irrigation, and hydropower.

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The Constitution established three tiers of government, but requiring approval from the commission effectively keeps decision-making centralised.

However, the draft faces opposition from the private sector. Prakash Chandra Dulal, vice-president of the Independent Power Producers' Association Nepal (IPPAN), argues that the bill undermines federalism by concentrating crucial decision-making powers at the federal level, particularly through the Water and Energy Commission. He also warns that increasing the mandatory environmental flow release from dams from 10% to 15% could significantly reduce electricity generation from private hydropower projects.

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The bill requires either 15 percent of the minimum flow or the amount recommended by the environmental study, whichever is higher. That will reduce the generation capacity of our projects.