Kosi Basin Development: A Potential Win-Win Case forIndia, Nepal, Australia and ICIMOD

  • Published in Editorial

On the World Water Day, 22 March, it is worth considering why water is not high-up in the national or international political agenda.

Politicians become interested in water mostly when there are prolonged droughts, serious floods, natural disasters like earthquakes and man-made catastrophes like in Flint, Michigan, with long-term lead contamination of the water supply system.


To a significant extent this is probably due to the way the water issues are currently framed. For example, water discussions mostly focus on supply and availability, quality and efficiency of use. They are very seldom framed in a larger context that could interest the politicians. For example, this could be on how water can act as an engine for economic development, or how water development could be used to alleviate poverty, generate employment and improve quality of life of the people.

Last month, the International Centre for Integrated Mountain Development (ICIMOD), with the support of the Department of Foreign Affairs and Trade (DFAT) of the Australian Government and the Bihar State Disaster Management Agency (BSDMA) organized a meeting, in Patna, India. The discussion was on how the poverty in the vast stretches of the Kosi Basin can be alleviated. Kosi is a transboundary river that links Nepal and India.

The framing of the issues for this meeting was important. The Kosi Basin is a very fertile flood plain, with good arable land, plenty of water and good sunshine over the entire year. This should have made the basin a breadbasket for the region, with high agricultural productivities, and good agro-industrial developments. This should have given the people of this region a good quality of life.

In spite of these natural endowments, Kosi Basin is regrettably now home to some of the most impoverished people of the world. Young and able-bodied men from Bihar now work all over India in low-paid jobs which keep them in a poverty trap.The situation in Nepal has been equally bleak. Political turmoil, security problems, and consistent poor policies over the past several decades have meant that Nepal’s sagging economy has failed to meet the aspirations of its people. This has forced young Nepalese men to emigrate to Middle East and Southeast Asia and undertake difficult, dirty and dangerous jobs. During 2006-2014, more than 1,000 Nepalese workers died in Malaysia alone. More than a hundred die in Qatar each year in construction accidents. It has been estimated that constructions activities for the FIFA World Cup of 2022, in Qatar, may claim the lives of some 4,000 migrant workers, majority of whom are likely to be from India and Nepal.

ICIMOD and DFAT’s choice of the Kosi Basin for a pilot project for water-based regional development has the potential to improve the standard of living of the region significantly. The choice is particularly important since the Kosi Basin covers only one Indian state, Bihar. This is important, since, in India, states are responsible for managing their water and land resources. Rivalries and mistrusts between the Indian states in water-related issues are invariably intense and have long histories. It is likely to be decades before they can come to an agreement on how best to manage their land and water resources effectively to improve the lifestyles of their people. Since the Kosi Basin includes only one Indian state, Bihar, it should be simpler than considering major Indian transboundary rivers that include two or more states, and also include other countries like Nepal, Bhutan and Bangladesh.

The plights of the mountain people are not only mostly unknown in the world but also the magnitudes of the problems they pose have been under-appreciated and mostly neglected in the global fora.

Mountains cover nearly 22% of the world’s land mass. In 2012, some 915 million people, 13% of global population, lived in mountainous areas. This was an increase of 126 million people over 2000. Nearly 90% of the mountain people live in the developing world.

The contributions of the mountains to the plains are often grossly underestimated. Take water. Mountains are responsible for providing between 60-80% of the world’s freshwater. Yet, the mountain people of the developing world seldom have access to clean and safe water, and very rarely to proper wastewater treatment services.

FAO estimates that 41% of mountain people living in developing Asian countries are vulnerable to food security. They also suffer from lack of proper infrastructure, like highways and housing, as well as availability of essential services like education, health and communication.

The Kosi Basin is no exception. Both in North Bihar and Southern Nepal, the major source of income of the residents is from remittances of the people living outside the region. People continue to live in poverty. Prosperity has passed them by.

Yet, this should not have been the case. With proper policies, and good and constructive relations between India and Nepal, the Kosi Basin should have been, and can become, one of the prosperous regions of the sub-continent.

Issues like regular floods and droughts, poor agricultural productivities, low cropping intensities, lack of infrastructures which prevent market access of farmers, consistent mistrust between India and Nepal for various real and perceived reasons, absence of adequate energy,and neglect of this region by the two countries,have all contributed to the perpetuation of poverty in the region. Yet, opportunities have existed for decades to develop water infrastructures in which could have controlled floods, reduced significantly the impacts of droughts, and contributed to hydropower generation. These developments could have significantly improved the livelihoods of the people living in the Kosi Basin in both the countries.

Nepal has a hydropower potential of well over 50,000 MW of which only about 800 MW have been developed. Nepal’s electricity requirements have been growing at about 9% annually and supply has fallen sharply behind. Consequently, even in the capital, Kathmandu, residents and industry often face 10-12 hours of power cuts every day.

If hydropower potential of the Kosi and other transboundary rivers could be harnessed, Nepal can easily sell excess electricity to its southern neighbour, and this electricity sale can be the largest export earner of the country. Instead, Nepal now imports electricity from India to supplement its grossly inadequate power generation.

Water can be the engine for regional development in the Kosi Basin through hydropower generation, prevention of floods and droughts, agricultural development and construction of other essential infrastructure. 

A good model is India-Bhutan collaboration on hydropower. With cooperation and collaboration with India, Bhutan now covers all its expanding electric needs through hydropower developments, and sells the excess electricity to its southern neighbour. Hydropower has now become by far the major export of Bhutan. Over the past four years, hydropower has contributed to about 60% of its total export income. Because of hydropower, Bhutan now has by far the highest per capita GDP in South Asia, as well as the highest per capita electricity use. It has very significantly enhanced its social and economic development.  

Both India and Nepal should realize that hydropower is not like oil or minerals which can stay in the ground until they are developed. In contrast, if water is not used for electricity generation and agricultural production, these benefits are gone forever. They are not bankable.

The Kosi Project has another distinct advantage. Since it is supported by DFAT, it can use the lessons learnt, both positive and negative, from the development of the Murray-Darling Basin (MDB). One of us was the independent reviewer of the MDB Plan. In our view, it is one of the best river basin plans available at present. The reason it has received considerable criticism in Australia is primarily because the process through which it was developed had many fundamental flaws, and not the Plan itself.

The lessons of the MDB Plan can be modified appropriately so that it suits the social, economic and environmental conditions of the Kosi Basin. In our view, the current effort has a good potential to nudge India and Nepal to use water as an engine for Kosi Basin development. DFAT could be the catalyst and ICIMOD could act as the “honest broker”. Together they should be able to bring India and Nepal together to improve the social and economic conditions of the people of the Kosi Basin. This project has the potential for all the four parties, India, Nepal, Australia and ICIMOD, to have a successful joint venture, which individually they probably would not be able to achieve for at least a decade more.

Asit K. Biswas and Cecilia Tortajada

(Asit K. Biswas is the Distinguished Visiting Professor, Lee Kuan Yew School of Public Policy, National University of Singapore. Cecilia Tortajada is the Senior Research Fellow, Institute of Water Policy in the same School.)