Chapter 1: introduction

6.2 Beneficial Issues

This section highlights the beneficial impacts due to implementation of the project. Beneficial impacts are also discussed in SA and SAP reports in detail.

6.2.1 Construction Phase

I. Employment opportunity for skilled, semi-skilled and unskilled local population

The project requires about 600 to 800 numbers of skilled, semi-skilled and unskilled workforces on a daily basis for 4 years during the construction period. The policy of the project is to provide maximum job opportunities to the local area people in the construction related jobs. As most of the competent population of the area is in search of jobs and there is a strong demand for job opportunities on the proposed project, the local people will benefit. While allocating job opportunities to the locals, the following preferential order will be followed:

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  Directly project affected people (whose land and property are affected by the project)
  
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  Indirectly project affected people (with houses close to the project site)
  
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  Project VDC people – Dalit and Adivasi Janajati are preferred than high caste groups
  
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  Project District people - Dalit and Adivasi Janajati are preferred than high caste groups
  
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  Citizen of Nepal - Dalit and Adivasi Janajati are preferred than high caste groups
  

II. Improvement of local economy/potential of micro-enterprises and small industries

KAHEP is a large construction project and involves a huge number of construction workforces (600 to 800 on a daily basis) for a period of about 4 years. The construction work force will require a variety of service facilities and consumer goods produced locally as well as from outside of the project area. Fresh vegetables, fresh fruits, milk and milk products produced locally will be in high demand. The local farmers of the project area producing these products will, thus, benefit. Tea shops, grocery shops, restaurants, fast food will be the major source of income to the local people. Besides, other micro and small industries such as dairy, poultry & livestock farming, furniture, tailoring, etc. could be established by the local people themselves to meet the requirements of the construction workforce. The project will incorporate programs to assist local farmers in the commercial production of local agricultural produces by training, distribution of improved seeds, or technology transfer etc. The cost estimates are included in a separate Social Action Plan (SAP) report.

III. Potential Improvement of public facilities and infrastructures

The project has a plan for environmental enhancement for the project affected VDCs, which includes support to water supply facilities, educational institutions, health care institutions, road network developments, and community forests right from the start of the project construction. The above programs are envisaged to help develop local infrastructures and social services in the project impacted VDCs helping the local people to improve their quality of life. The cost estimates are included in a separate SAP report.

IV. Potential exposure of the local population to new technologies and technology transfer

The Project has a plan of launching training programs for local people through environmental enhancement measures in specialized area such as house wiring and maintenance, slope stabilization, bio-engineering, spoil handling, masonry, gabion wires weaving, construction of dry walls & gabion walls, carpentry, welding etc. These trainings will confer technical skills and know-how to local construction workers that will help them to obtain employment opportunities in other construction projects especially hydroelectric as many hydroelectric projects are going to be constructed in the region. The cost is included in a separate SAP report.

6.2.2 Operation Phase

I. Positive impact on the rural economy due to electricity royalty

As per the provisions in the government regulations, 50 % of the total royalty obtained from the sale of hydroelectric produced will be allocated to the affected Development Region, out of which 12 % will be allocated to the affected District Development Committee (DDCs) for local development. As per the hydropower policy (2001), the project affected VDCs are part of rural electrification that will envisage the increase of the rural economy and are entitled to 1% of the royalties received by the affected DDCs.

II. Decrease in load shedding due to implementation of the project

Despite its high potential for hydropower, Nepal has not been able to harness its water resources for the overall development of the country. Though Nepal initiated its water resource development for hydropower since 1911, it has been able to harness only about 600 MW in the last 99 years, while its proven hydropower potential is estimated to be around 42,000 MW. Currently, the country is facing an acute shortage of electrical energy due to the increasing demand of around 8 to 10% per annum, while the annual hydropower energy input in the national grid falls short of the demand due to unexpectedly slow pace of the hydropower development. As a result, the country may expect a load shedding of 12 hours a day in the winter season. The implementation of the proposed KAHEP will generate 201.0 GWh of hydroelectricity per year and feed into the national grid and simultaneously, will help to decrease the present load shedding.

III. Opportunities for Hydroelectric Development

The implementation of the proposed KAHEP will add up 201.0 GWh of hydroelectricity into the national grid per year. As the rivers of the project site have high potential of hydroelectricity development, many investors will be motivated to invest in hydropower projects in the region. The construction of the transmission line and access roads of the proposed project could be utilized by other hydropower developers to develop new hydropower projects nearby the project site.

IV. Changes in local economic activities

The royalty provided to the project affected VDCs will increase the implementation of the development activities in the project area, which in turn, will improve the economic activities of the project area. Furthermore, many enterprises and industries could be opened in the area due to the availability of electricity thus enhancing the local economic activities.

V. Changes in micro and macro economy

With the increase in the economic activities, the local area micro economy will be drastically changed. Currently people are practicing subsistence agriculture for livelihood. There will be a shift in the agriculture practice from subsistence to commercial farming. Many people will establish cottage industries based on local resources as electrical energy will be available for the industries. This will bring a substantial change in the macro-economy of the entire district. Dependency on agricultural activities will be minimized by the introduction of industrial and service oriented enterprises in the local area.

VI. Development of new infrastructures

With the implementation of KAHEP, as the wheel of local economy moves forward, many new infrastructures in the form of access roads, transmission lines, communication networks will be developed from the locally generated economic resources by the people.

VII. Basis for rural electrification

As per the Hydropower Policy (2001), the project affected VDCs are entitled for 1% of the royalties out of the total allocated royalties for the affected DDCs received from the project by the government for local development. That includes rural electrification as well, which will increase the rural economy of the affected VDCs.