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WATER POLITICS

A second excellent piece from the Brookings Insitution details Central Asia’s opportunities and challenges to make better and more efficient use of it water resources, both by investing in large water storage and hydropower capacity and by more efficient utilization of water, especially in irrigation use.  As the article notes:

“…A visit to the site of what is to become the highest dam in the world, Rogun Dam along the River Vaksh in Tajikistan, demonstrates the many opportunities and challenges of one of Central Asia’s greatest assets – water. Thousands of glaciers in the high mountains of the Pamir region store huge quantities of water that give rise to the tributaries of Central Asia’s two great rivers: the Amu Darya and the Syr Darya. These rivers drain into the Aral Sea after irrigating the deserts in the northern parts of this land-locked region.

Soviet engineers planned and built hundreds of dams to regulate the water flow in the Aral Sea River Basin for more effective irrigation use and for generating electricity. Among them was Rogun Dam, planned for a height of 335 meters and started in 1976, but never finished since the break-up of the Soviet Union and Tajikistan’s subsequent civil war brought construction to a halt in 1991. Now the Tajik government is planning to complete the project. After a disastrous winter of energy shortages and facing a major drought and a protracted energy emergency, the country’s President, Emomali Rakhmon, met on May 30, 2008 with engineers, workers and their families at the site of the future dam to announce to them and to his weary populace that construction will resume this year. A group of representatives of the international community were also invited to visit the site since the government hopes to attract foreign financiers.

Placed in a narrow gorge between steep mountain flanks, the dam when completed will generate 3,600 megawatts of power. This will be enough to supply much of Tajikistan’s electricity needs and allow exports to Tajikistan’s neighbors, including to Afghanistan and Pakistan through a 1000 MW transmission line yet to be constructed. While a preliminary dam built in Soviet days was washed away by floods in 1993, there remains a network of huge tunnels and caverns carved inside the mountains on both sides of the river. These allow big construction equipment access to the dam and will house the eight turbines that eventually are to generate the power. While the completion of the dam is still expensive at a planned cost of $ 2.2 billion, the fact that a significant, and perhaps the most difficult, part of the work has already been carried out strengthens the economic justification for pushing forward with the project.

The Prime Minister, who accompanies the international visitors, explains that the dam should be finished in stages over the coming 8-10 years, and will take up to 18 years to fill, although some power generation could start earlier. It is to be built of rock and earth, which will allow it to absorb potential seismic shocks better than a concrete structure, an important consideration in this earthquake-prone region. While eager to involve others in the financing, the government intends to retain control over the dam and its energy output, a fact that may deter others from participating. Another potential obstacle is that down-stream countries may object. Uzbekistan has been especially concerned that the large storage requirements of the new dam, and possible mismanagement of the water flow by the Tajik neighbors will endanger the essential supply of water to the millions of Uzbeks dependent on the river’s uninterrupted flow during the summer months when irrigation needs are highest.

Rogun dam is the largest of the dams currently on the drawing board in Central Asia, but others are under consideration, among them the Kambarata 1 and 2 dams in neighboring Kyrgyzstan with a joint capacity of 2,260 MW and an estimated cost of $2 billion. According to the Eurasian Development Bank, total capacity of currently planned hydro investments in Kyrgyzstan and Tajikistan is 11, 360 MW at a total estimated cost of $10.2 billion. These projects share similar characteristics.

First, because of their high costs they cannot be funded by national resources alone—Rogun’s cost is about 85% of Tajikistan’s Gross National Income (GNI), Kambarata’s cost is 77% of Kyrgyzstan’s GNI. The two countries will have to attract public or private investors from abroad if they are to proceed. Aside from the financial costs of construction, there are costs resulting from the loss of agricultural land (for example, Kyrgyz farmers lost 21 thousand hectares due to the construction of Toktogul, the largest of Kyrgyzstan’s hydro dams and from having to resettle and compensate people displaced by the reservoirs.

Second, in terms of benefits, in the long term the hydro dams will generate large quantities of electricity that can meet the rising national energy needs of the countries at costs much lower than imported energy and help avoid the energy shortages currently prevailing during the winter months in Kyrgyz Republic and Tajikistan. Surplus power can be exported to neighboring countries, where electricity is also in short supply and generation costs are at least 3-10 times higher. Moreover, with seasonal differences in peak demand between the Indian subcontinent and Central Asia (summer peaks in the former, winter peaks in the latter) power exports from Central Asia to Pakistan and eventually to India are particularly attractive. Major regional transmission lines are under construction or being planned to allow power exports from Kyrgyzstan and Tajikistan.

Third, the dams can be used to regulate river flows so as to prevent down stream flooding during high run-off seasons and store water for release during the summer months when it is needed for irrigation. However, since energy is needed especially in the cold winters in Kyrgyzstan and Tajikistan, the recent practice has been the reverse: a higher release of water in the winter, with resulting flooding downstream, and in the summer less water release than needed for downstream irrigation. Construction of new storage capacity in the longer term can help reduce this tension between seasonal uses of water and also can help reduce the risks of water and energy crises, even though it will do little to address the immediate crisis now confronting Central Asia.

Fourth, an additional reason for focusing now on the long-term water resource management challenge is that global climate change is threatening the Central Asia’s long term ecological stability as global warming is melting glaciers in the region at an alarming rate. In the last fifty years the waters stored in the glaciers of Central Asia are estimated to have shrunk by 25% and they are projected to shrink by another 25% percent over the next 20 years. These numbers are at best guess work for now, but they do reflect the broad trends that will likely see major changes in water flows of the principal rivers in the region. Greater water shortages in the long term will force Central Asian countries to use their available water much more efficiently than has been the case so far, especially in irrigation. But they will also make cooperative approaches to rational storage and allocation of scarce water resources across the region much more important if peace and prosperity in the region are to be preserved.

Detailed feasibility and environmental impacts studies still need to be conducted for the new dams to assure that benefits outweigh costs and potential negative environmental and social impacts can be adequately mitigated. In the case of Rogun dam, the World Bank has initiated such assessments as a preparatory stage for possible funding by the international financial institutions. In view of the concerns of the downstream countries, it is necessary to ensure that the rules of international water conventions are respected and a potential source of conflict among Central Asia nations is dealt with constructively and peacefully.

There are various ways of dealing with the allocation of transnational water resources:

a) Downstream countries could pay upstream countries for the summer release of water stored in the winter. This in effect was the practice during Soviet days, when downstream republics provided upstream republics with free gas and coal to generate electricity and heat during the winter months. After the dissolution of the Soviet Union this arrangement broke down. And while upstream countries argued that water should be treated as a commodity and paid for by downstream countries (at least in terms of the cost of maintaining and running the dams and turbines), downstream countries rejected this notion on the grounds that water in transnational rivers is not a property of any country but a common good shared equally by all riparians.

b) Downstream countries could build dams and reservoirs on their territories so as to catch the waters released by the upstream countries during the winters for summer use. Such reservoirs have already been constructed (e.g., in Uzbekistan) and more are currently under construction (e.g., the huge “Golden Century Lake” in Turkmenistan) or planned (e.g., Kokserai reservoir in Kazakhstan). The problem with these downstream reservoirs is that they are inefficient and partial responses. Since they are located in flat land rather than deep mountain valleys they are more expensive, provide little or no hydroelectric capacity, and lose lots of water to evaporation and seepage.

c) A third option is to build dams and reservoirs along the same river or river system in sequence or as “cascades”. This allows the release of water from the higher reservoir for electricity generation in winter, but catching and storing the water in the subsequent reservoir for summer release. In the case of Rogun dam the downstream reservoir of Nurek dam could serve this purpose; for Kamabarata dam the downstream reservoir of Toktogul dam is available.

Among these options, the last one may well be the most feasible for the Central Asian region, but it requires a level of trust among countries that is currently not universally present. So far Uzbekistan strenuously objects to the building of Rogun. Kazakhstan, which is the main country downstream of Kambarata, in contrast appears willing to support the development of this new set of dams in Kyrgyzstan, although it will likely want to have a say in the management of the dams. The practical question then is whether a mechanism can be found to provide appropriate guarantees for the downstream countries that create the minimum of trust to permit cooperation in this critical area.

Currently various efforts are underway to try and find such a mechanism. This includes a High-Level Group set up in 2006 by the Eurasian Economic Community (EurasEC – with Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan as members) to develop a strategy for the efficient utilization of water and energy resources in Central Asia. It is currently working on a strategy document but apparently has not yet reached agreement. The Central Asia Regional Economic Cooperation Forum (CAREC – whose participants are Afghanistan, Azerbaijan, China, Kazakhstan, Kyrgyzstan, Mongolia, Tajikistan and Uzbekistan, as well as six multinational institutions, including the Asian Development Bank and the World Bank) is also preparing an energy sector strategy which, among other objectives, is to develop a broad agreement on the principles for the development of the region’s hydroelectricity resources. The Shanghai Cooperation Organization (SCO – with China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan as members) in its 2007 summit agreed to develop an “energy club”, but so far little is known about its practical implementation and how it would address the hydropower issues of Central Asia.

While the preparation of regional strategies and broad understandings are helpful for creating a platform for dialogue and improved mutual understanding, the key will be the pragmatic implementation of major specific river-basin projects, such as Rogun for the Amu Darya and Kambarata for the Syr Darya. In the first place, all regional players will have to realize that given present and likely future energy market developments there is a clear inevitability to the development of cheap and renewable hydropower resources in the region, even as the timing may be uncertain. Second, given the need for significant external financial resources and the widely shared interest in the effective development and management of the region’s hydro potential – not to mention sustained peace and prosperity—there should be ways to get upstream and downstream countries to agree on a shared approach.

A practical way to achieve this would be the creation of a consortium of partners, including all directly affected countries, as well as possibly one or more of the big neighbors (such as China or Russia), the international financial organizations and private financiers. The Government of Tajikistan has in fact invited Afghanistan, Kazakhstan, Kyrgyzstan, Turkmenistan and Uzbekistan to join such a consortium. Kazakhstan has responded positively to this invitation. The consortium would operate under a carefully crafted agreement that lays out the key water and energy sharing arrangements, the financing and management responsibilities, and the arbitration mechanism in case of unresolved disagreements. International financial institutions could be asked to provide guarantees, which in turn would be counter-guaranteed by the regional member governments. Perhaps the best example of a successful internationally backed river basin agreement with lasting success is the Indus Water Treaty which was signed in 1960 between India and Pakistan after years of arduous negotiations with the support of the World Bank.

In sum, there are great potential benefits to Central Asia and its neighbors that argue for the swift implementation of cooperative solutions for the development of Central Asia’s “blue gold”. The principal responsibility for this rests with the countries of the region, but the big neighbors and the international community can do much to help create a supportive environment: offering financial support for appropriately structured regional consortiums, funding neutral third-party analyses of costs and benefits and of their distribution across countries, creating opportunities for constructive dialogue and trust building among the regional players, and stressing the shared long term interests of all concerned. Of course, even under the best of circumstances, the construction of new hydro capacity is a long term proposition. Measures to encourage more efficient utilization of available water resources and emergency steps to prepare for water and energy crises when they threaten, as is the case right now, need to be promoted also as a matter of high urgency.”