UNCLAS SECTION 01 OF 02 KATHMANDU 000964

SIPDIS

SENSITIVE

STATE FOR SA/INS
STATE ALSO PASS USAID - DCHA/OFDA

E.O. 12958: N/A
TAGS: PTER ECON ECPS ENRG NEPAL'>NP
SUBJECT: UPDATE: ATTACKS ON INFRASTRUCTURE

REF: A. (A) KATHMANDU 0696

B. (B) KATHMANDU


1. (U) Nearly 4,000 people--civilians, military, police and
insurgents--have been killed in NEPAL's six-year-old Maoist
insurgency to date. According to Ministry of Defense
figures, more than 10 percent of that number--572--were
killed in the first half of May alone. (Note: MOD figures,
especially regarding Maoist casualties, are notoriously
unreliable. In our calculations, we have always taken their
lowest estimate. End note.) Countless more have been
injured, maimed for life, or have fled their homes. To our
knowledge, there has been no calculation of the economic
impact of this loss of life, limb, and manpower.


2. (SBU) Besides the mounting human toll of lives lost in
the six-year-old Maoist insurgency, the cost of
Maoist-inflicted damage to NEPAL's fragile infrastructure
continues to climb (Ref A). While destroying rural
infrastructure might seem to contradict the Maoists'
purported pro-poor ideology, the attacks likely serve other
purposes for the insurgents, i.e., isolating already remote,
underserved areas in the far west; intensifying already
substantial budgetary pressure on the Government of NEPAL
(GON); and forcing the Royal NEPAL Army (RNA) to divert
already insufficient troops from the battlefield to the
protection of key infrastructure.


3. (U) The attacks, which typically target and disable
small, village-level projects, have increased in frequency
over the past several months, threatening to set back years
of development progress in this impoverished nation. Another
typical tactic is the robbery and destruction of local
branches of the state-owned Agricultural Development Bank,
which provide credit for micro-enterprise schemes for rural
residents in the hinterlands. The Ministry of Finance
estimates just the cost of repairing damaged infrastructure
alone at about USD 100 million (Ref B)--money that the
Ministry will be hard pressed to find. As a result, many of
the disabled projects are likely to remain so indefinitely.
Many observers view the attacks as part of a deliberate

Maoista plan to cut off districts from communication with
other parts of the country, isolating them from government
contact.


4. (U) Hydropower: Since January, nine hydropower
facilities, both donor and community supported, have been
damaged or destroyed, leaving more than 125,000 people
without electricity. Many of these were micro-generation and
community-built schemes, but two larger projects, the USD 20
million 12 MW Jhimruk hydropower project in Pyuthan district
and the 5 MW Andhikhola project in Syangja district, were
also badly damaged. Another casualty: the salaries of
workers employed at some of these small projects. At least
90 employees at plants destroyed in Bhojpur, Khandbari,
Phidim, Jomsom, Darchula, Bajhang, Taplejung, and Tehrathum
are losing their jobs.


5. (U) Telecommunications: The Maoists have also destroyed
more than three dozen telecommunications towers, primarily in
the west, the repair of which will cost the state-owned NEPAL
Telecommunications Corporation more than USD 25 million.
Damage to repeater towers, terminal towers and VHF towers
have completely cut off the far-western districts of Achham,
Bajura, Darchula, and Bajhang, while nearly all of the lines
in Doti, Baitadi, Dadeldura, and Kailali have also been cut.


6. (U) Airports: 13 district airports--again, nearly all
located in the west--are non-operational because of damage
sustained during Maoist attacks. Among the districts thus
cut off from commercial air transport are Achham, Rukum,
Darchula, Bhojpur, Dolpa, Bajura, Kailali, Baitadi, Khotang,
Bajhang, and Jajarkhot. Repair costs are estimated at USD
1.7 million.


7. (U) Local Government: About one-third of NEPAL's 3,900
Village Development Committee buildings have been destroyed,
many of them burned to the ground. Over 250 rural post
offices have been similarly destroyed.


8. (U) Banks: To date, Maoists have robbed a total USD 4.2
million from various bank branches. In addition, the
insurgents have destroyed 132 branch offices of the
Agricultural Development Bank; 17 offices of the state-owned
Rastriya Bankijja Bank; and 13 offices of NEPAL Bank Limited.
The dwindling presence of financial institutions in the
hinterlands has also affected development projects that rely
on local banks for cash disbursements.


9. (U) Bridges and Roads: Attacks on bridges (Ref A) and
roads continue. An attack on a a bridge in Surkhet District
has left members of dozens of communities without access to
neighboring districts, while damage done to three different
suspension bridges in Mugu cut off a number of VDCs from the
district headquarters. In a turnabout of usual events, local
residents near NEPALganj forced suspected insurgents who had
destroyed a suspension bridge to repair the damage.
According to press reports, it took nine cadre five days to
fix the damage. Work on 12 road projects covering 418 km in
far-western NEPAL has been suspended because of the violence,
affecting 4 million people.


10. (U) Water: On April 15 in Dhading District, Maoists cut
off the water supply pipelines and dismantled the intake
system, depriving an estimated 10,000 people of drinking
water. On April 22 Maoists set fire to the district water
supply office in Sindhupalchowk district. An April 23 attack
on the Bijauri Drinking Water Project in Dang District has
deprived nearly 25,000 people of potable water. About 30
meters of pipes were completely destroyed, while another
1,000 meters were carted off, along with 20 kg of lead and
500 sockets, presumably to be used as ingredients for
improvised explosive devices. On April 26, a Maoist socket
bomb exploded at an irrigation project in Tanahu, injuring a
four-year-old child.


11. (SBU) Comment: There are various theories as to why
the Maoists are now targeting infrastructure--especially
infrastructure that benefits the poorest of the poor in some
of the remotest districts in NEPAL. Some observers speculate
that the attacks reflect just how desperate the Maoists have
become. Some suggest the attacks are intended to increase
the general misery index, increasing pressure on the GON to
come to the negotiating table. Others say that the
destruction marks the next progression in the insurgents'
revolutionary game plan. Certainly some of the devastation
does seem intended to isolate large parts of the far-west of
the country, and to deprive those residents of the few
government-provided services available in these remote
reaches. Such tactics have also forced the RNA to divert
already scarce manpower to protect key
infrastructure--including 75 district headquarters. The
Maoists may not be winning many hearts and minds with this
vicious new approach, but they don't seem to care.
Apparently for them, keeping the RNA stretched thin and the
GON unable to ensure basic services to its citizens is a more
important goal.
MALINOWSKI