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dam-l LS: PR: German Govt. Report Blasts Maheshwar Dam



INTERNATIONAL RIVERS NETWORK     -------------        URGEWALD

PRESS RELEASE 				EMBARGOED UNTIL JUNE 29, 2000

Patrick McCully				Heffa Schücking
International Rivers Network			Urgewald
Berkeley, CA, USA				Sassenberg, Germany
Tel: +1 510 848 1155			Tel. +49 2583 1031
patrick@irn.org				urgewald@koeln.netsurf.de


GERMAN GOVERNMENT REPORT BLASTS MAHESHWAR DAM
Acceptable Resettlement "Unlikely or Even Impossible"

The German Ministry of Economic Cooperation and Development today 
released a strongly critical review of resettlement for the Maheshwar 
Dam on India's Narmada River. The review was commissioned due to 
controversy over a proposed export credit guarantee from the German 
government to multinational company Siemens for the supply of 
turbines to the project. The review team was led by Dr. Richard E. 
Bissell, Executive Director of the Policy Division at the US National 
Research Council and a former chairman of the World Bank's Inspection 
Panel.

The report will put major pressure on the German government to 
withdraw from Maheshwar. Such a withdrawal would force Siemens to 
drop out or find another government with lower standards to guarantee 
the turbine sales from one of the company's foreign subsidiaries. 
Activists are ready to oppose any government which may be prepared to 
take up the export credits for Maheshwar.

The increased uncertainty over the future of Maheshwar will also have 
repercussions on US-based Ogden Corp., which is slated to make a 
major investment in the project.

Following are some of the conclusions of the review:

* The number of people who would lose their land and jobs to the 
project is "much higher" than claimed by project authorities, and the 
amount of replacement land required for resettlers "would be many 
times higher than the currently calculated requirement".

* It is "unlikely or even impossible" that agricultural land required 
for resettlers would become available. "Land-for-land" resettlement 
is required by Madhya Pradesh state policy and the clearance for the 
project from the central government Ministry of Environment, and is 
"considered the minimum acceptable level of rehabilitation" by the 
review team.

* "the requirement of money for just the agricultural land would be 
many times the current budget for the entire R&R [Resettlement and 
Rehabilitation] plan."

* The payment of cash compensation to farmers by project authorities 
"clearly violates the standard" that farmers should be provided with 
replacement land.

* "the Madhya Pradesh Electricity Board has been contracted by the S. 
Kumars to carry out R&R. However, according to their officials, the 
[Madhya Pradesh Electricty Board] has little or no experience in 
implementing R&R . . . the resources and capability to carry out R&R 
in accordance with the stated policy and conditions of clearance, do 
not exist."

* "the project planning process was neither transparent nor 
participatory. Even now, there is little transparency, participation 
and democracy in the process of implementation."

* "the benefits of the dam to the regional and national power sector 
have become increasingly controversial as the cost of construction is 
now four times the estimate submitted to the government ten years 
ago."

Heffa Schücking of the German NGO Urgewald said "The Bissell Report 
confirms what we have long been telling our Government. As the 
Government themselves have commissioned this report, we are confident 
that Siemens application for export credit insurance will soon be 
turned down."

The bulk of foreign investment in the Maheshwar Dam is slated to come 
from New York-based Ogden Corp. Despite intense local opposition to 
the project, Ogden Corp. signed a Memorandum of Intent to take a 49% 
shareholding in the 400 megawatt dam during President Clinton's visit 
to India in March this year.

"The Bissell Report makes a mockery of Ogden's statements that the 
project will improve the quality of life of local people and shows 
that the number of people affected will be many times higher than 
they claim," says Patrick McCully. "Ogden should quit Maheshwar now."

Ogden Senior Vice-President, Kent Burton, has assured activists that 
human rights and environmental considerations would not be 
disregarded by the company, and that Ogden is committed to pursuing a 
democratic, transparent process in their involvement in the project.

A number of international investors have already pulled out of 
Maheshwar citing social, environmental and economic concerns. These 
include San Francisco engineering giant Bechtel, Oregon utility 
PacifiCorp, Dutch Bank ABN-Amro, and German utilities VEW Energie and 
Bayernwerk.

Intense local opposition to the project has resulted in numerous dam 
site occupations, marches, rallies and hunger strikes which, despite 
mass arrests and beatings at the hands of police, have forced long 
delays in project construction. The Bissell Report notes that this 
opposition has meant that work on the project "has failed to meet any 
of its deadlines". The project was scheduled to have been completed 
in 1998 but the report states that "construction work is limited to 
date".

Maheshwar Dam is part of the Narmada Valley Development Project which 
envisages the construction of 30 large and 135 medium-sized dams in 
the Narmada Valley. The most notorious of these projects has been the 
mammoth Sardar Sarovar Dam under construction downstream from 
Maheshwar in Gujarat state. The World Bank and bilateral aid donors 
stopped financial support for large dams on the Narmada in the early 
1990s. Maheshwar is the first attempt to finance one of these 
projects through the private sector.

-- ends --

FOR MORE INFORMATION AND COPIES OF THE REPORT:

Patrick McCully, USA Tel. +1 510 848 1155 (w) +1 510 528 2930 (h); 
patrick@irn.org
Heffa Schücking, Germany Tel: +49 2583 1031; urgewald@koeln.netsurf.de

International Rivers Network supports local communities working to 
protect their rivers and watersheds. IRN works to halt destructive 
river development projects, and to encourage equitable and 
sustainable  methods of meeting needs for water, energy and flood 
management.

Urgewald is a German human-rights and environment organization that 
monitors German involvement in large-scale projects in developing 
countries. Urgewald's director is a recipient of the San 
Francisco-based Goldman Environmental Prize.

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