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dam-l LS: German Government May Pull Funding for Maheshwar
Germany may pull the plug on Indian dam
By Suzanne Goldenberg in Maheshwar, Madhya Pradesh
UK Guardian, 8/4/99
Banana and sugar cane farmers who have enjoyed the bounty of the Narmada
river for generations, and fought for 14 years to save their birthright
from one of the world's boldest dam projects, may have found an ally in the
German government.
Germany's red-green coalition, which came to power last autumn promising
government with a social and ecological conscience, must decide within two
months whether to extend DM240m ($150m) in export credit guarantees to
Siemens and another firm building the Maheshwar dam.
The project, a German-Indian collaboration, is one in a chain of 30 big
dams along a 1,000km stretch of the Narmada. The scheme is bitterly opposed
by environmentalists. The controversy led to the withdrawal of two of
Siemens' partners in April.
Indian environmentalists and intellectuals, including the best-selling
author Arundhati Roy, claim the Narmada river valley project would uproot
tens of thousands of villagers for relatively small irrigation and
electricity gains.
Last week Ms Roy visited one of 61 villages threatened by the reservoir for
the Maheshwar dam. The focus of the protests against the harnessing of the
Narmada is downstream, where villagers have vowed to drown in their homes
as the river, cut off from the sea by the Sardar Sarovar dam, overflows its
banks.
The river has started to flow backwards from the sea, and the landscape
changed dramatically after several days of heavy rain in early July.
The region is home to some of India's richest farmers. While hired hands
walk the rows of cotton, dousing the plants with pesticide from cylinders
strapped on their backs, the farmers sit at home and fret about rates of
compensation.
"They have said our land will be flooded, but they will not pay us
compensation," says one. "They told us, 'If we give all of you
compensation, we will not have enough money left to pay for the dam'."
Their concern increased in January when giant earth-movers gouged out a
22-metre crater for the planned power plant. They have yet to start on the
55 sq km reservoir - and if the German government does not act soon, they
may never do so.
In May Siemens, which is collaborating with Bavarian Hypo Vereinsbank and
the Indian conglomerate S Kumar, told the Berlin government that it could
not proceed without export guarantees. The Swiss multinational ABB has
asked its government for guarantees of $140m.
"We cannot wait longer than September," says Surendar Singh, director of
the Shree Maheshwar Hydel Power Corporation, the German-Indian joint
venture. "Either Siemens gets the guarantees from the German government, or
we need to find other partners."
That may prove difficult. In April two German electricity companies
abandoned the project after the Urgewald environmental group said that the
project was ignoring environmental safeguards and guidelines for the
villagers' resettlement. A United States consortium abandoned the project
in the mid-1990s.
Indian activists say the $530m project will never generate enough power to
make up for the social cost of flooding so much prime farmland.
They claim the 400-megawatt plant would function for only 90 minutes a day
during the dry season, and that the state could manage by increasing the
efficiency of the Madhya Pradesh electricity board, whose power plants
presently operate at only 66% capacity.
© Copyright Guardian Media Group plc. 1999