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dam-l LS: NBA PR on German Maheshwar Report (fwd)



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subject: LS: NBA PR on German Maheshwar Report
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Narmada Bachao Andolan
62 Mahatma Gandhi Marg,
Badwani. Tel: 07283-33162, 07290-22464
E-mail : nobigdam@vsnl.com

Press Note : New Delhi, 4 July, 2000

GERMAN MINISTRY REPORT EXPOSES MAHESHWAR PROJECT

NBA URGES GERMAN GOVERNMENT TO REFUSE HERMES GUARANTEE ,
CALLS UPON THE INDIAN GOVERNMENT TO SCRAP THE PROJECT

In a very significant development, a hard hitting report of the 
Development Ministry of Germany made public late last week has 
severely indicted the social and environmental viability of the 
Maheshwar project and found that the rehabilitation of the thousands 
of affected families is well nigh impossible. The Maheshwar 
Hydroelectric Project is a big dam under construction on the river 
Narmada in Central India. A team of three internationally renowned 
experts was commissioned by the German Development Ministry in 
May-June this year to assess the ground realities in the project 
impact zone, in order to be able to take a decision on the Siemens 
application for a Hermes export credit guarantee for the Maheshwar 
Project. The report has confirmed the issues being raised by the 
three-year-old struggle of the local people which has been carrying 
on in the face of  governmental apathy and severe police repression. 
The German Development Ministry has welcomed the report and said that 
it only confirmed their expectations. The Green Party has also come 
out with a statement demanding that the Hermes guarantee must be 
immediately refused.

In the wake of this report, which has exposed the fundamental and 
irreparable flaws in the Maheshwar Project and the complete 
impossibility of any fair and just resettlement and rehabilitation, 
the mass organisation of the affected people -the Narmada Bachao 
Andolan calls upon the German Government to finally and decisively 
refuse the Hermes export guarantee sought by Siemens for the Project. 
It also urges the Govt. of India as well the Govt. of Madhya Pradesh 
to take cognizance of this report and immediately scrap the 
destructive project. It may be recalled that the  Reports of the Task 
Force constituted by the Madhya Pradesh government and that of the 
Environment Ministry of the Central government in 1998and 1999 had 
come to similar conclusions about the Project but the Central and 
state governments had simply sought to ignore them.

The report of the German government notes that despite the fact that 
the project is already under construction, even the most preliminary 
demographic and socio-economic data about the impacts is totally 
unavailable. It says that " Significant uncertainty exist about the 
amount of land to be seriously affected (submerged or waterlogged) by 
the project, and there are no apparent plans by the authorities to 
remedy the problem." It also says that there is uncertainty about the 
number of people to be seriously affected and that the authorities 
are unlikely to "identify the thousands living in areas not yet 
agreed by the authorities to be affected by the Project or those 
whose livelihoods are affected ". The Narmada Bachao Andolan has 
estimated that the numbers of such families living on sand quarrying, 
fishing, draw down agriculture , etc. whose livelihoods will be 
affected by the Project is around 7000-8000 families.

It notes that the affected people have never been consulted or 
properly informed about the Project and that in the absence of the 
same, the Project has been sought to be continued with the use of 
brute force and human rights violations. It clearly says that "the 
approach of the rehabilitation program till date has failed to be 
transparent ,participatory and democratic, and dissent has been 
handled with police force rather than communication."

Noting the most flagrant and open violations of the Rehabilitation 
policy of the Madhya Pradesh government as well as the statutory 
clearances of the Central Ministry of Environment and Forests the 
team concludes that "the Project has not implemented the land for 
land policy set by the government of Madhya Pradesh and by 
international standards " and that the  "the R&R implementing agency 
has not allocated land to the landless, as called for in the 
environmental clearance of the Ministry of Environment and Forests 
and, in any case, required by international and other national 
standards".

Instead it found that the Project authorities have misinformed the 
affected people about their rights in order to compel them to accept 
cash compensation rather than land, and in some cases where the 
affected people insisted on their rights and refused to accept cash 
compensation, stones were dumped onto their lands by the Project 
authorities in order to bulldoze them into submission. It found that 
in the cases that people had accepted cash in lieu of land, "the 
damage to family income and future prospects arising from cash 
compensation instead of land for land are already evident in the 
project area and the validity of cash compensation, given the 
misinformation about the R&R policy, is questionable."

It concludes that there is no cultivable land for the rehabilitation 
of the affected people available in sufficient quantity even by the 
admission of the Government of Madhya Pradesh itself, and that "if 
the R&R policy were executed as provided, the additional cost to the 
project would require an entirely new financing package several times 
larger than currently provided for R&R. "

It is thus clear that in the absence of large amounts of cultivable 
land and financial resources and institutional capacities to ensure a 
just and fair resettlement of all the affected people, rehabilitation 
is impossible.

The Maheshwar Hydroelectric project, one of the controversial 30 big 
dams being built in the Narmada Valley in Central India, is the first 
privatized hydel project in India. The Project will affect the homes, 
lands, and livelihoods of approximately 40,000 people of the area and 
submerge thousands of acres of rich, agricultural lands, scores of 
sand quarries, draw down agriculture and a rich composite culture. 
Since 1997, the affected people of the area have been pointing out 
that the cost of power to be produced by this Project will be 
prohibitively high - at least 3-4 times the current cost of power in 
the area and the large part of power will be in the months when there 
is a surplus of power in the state. In these circumstances by putting 
electricity out of the reach of common people they anticipate that 
this Project will bring darkness to the people.

They have also been pointing out that in the absence of any 
cultivable land and other resources for rehabilitation , any further 
construction on the Project can only lead to a massive human tragedy 
and the use of the most unacceptable forms of repression and ruse on 
the people struggling against this destruction.  Thus it is clear 
that this ill conceived and destructive Project that will pauperise 
the  thousands of prosperous families currently living lives of 
dignity and working in this area, must immediately be scrapped, 
without any further delay.

The writing is clear on the wall. After this clear and unambiguous 
report, the German government must act swiftly to refuse the Hermes 
guarantee to the Maheshwar Project. For the people of the valley each 
day that the decision is kept hanging means a fresh outrage, a 
further violation and pushing of the Project towards a fait accompli.

The Narmada Bachao Andolan also calls upon the Ogden Energy Group, a 
power utility from the U.S. that has tentatively picked up 49% of the 
Project equity, vacated by the German companies Bayernwerk and VEW 
Energie in April 1999, to take cognizance of the ground realities and 
report of the Independent Review and withdraw from the Project, now 
rather than later. It may be recalled that this Project which is yet 
to achieve financial closure was planned to have 78% foreign 
investment . Yet besides the two German power utilities that withdrew 
from the Project  in the midst of an indefinite hunger strike by the 
affected people in April 1999, even earlier in 1997 and 1998 , the 
Bechtel Enterprises and the PacGen companies of the U.S. had first 
involved themselves in and then withdrawn from the Project.

The single largest foreign component of this project is a loan from a 
private German Bank, the HypoVereinsbank, which is to give the 
Project over 5000 million Rs. This loan is tied to the purchase of 
power equipment from the Seimens. It was in the context of this loan 
that the Siemens has applied to the German govt. for an export 
guarantee for this project.

In 1997 the Christian Democratic Government of Germany gave the 
project in-principle guarantee. However, as disquieting news from the 
project started to filter in from India, the decision to confirm the 
guarantee was put on hold. The Social Democrats and Green coalition 
government that came to power in 1998 also refused to confirm the 
Hermes guarantee.

It was in order to resolve the contentious issues that the 
Development Ministry, Government of Germany commissioned a team of 
internationally renowned experts to travel to the affected area and 
meet the different stake-holders and access the ground realities of 
the resettlement. This team travelled to the valley in the first 
fortnight of June 2000 and met affected people as well as project 
promoters and govt. functionaries at the state and central levels. 
The team comprised of  Mr. Richard E. Bissell, presently Executive 
Director of the Policy Division at the US National Research Council 
and former Chairman of the World Bank's Inspection Panel, Prof. 
Shekhar Singh, Environmental Expert ,faculty member at Indian 
Institute of Public Administration, New Delhi and Member of the 
Environmental subgroup of the Narmada Control Authority- the 
statutory body looking after  construction of the large dams in the 
Narmada valley. and Dr. Herman Warth, well known environmental 
consultant to the German and Austrian governments and to the European 
Union.

Finally the Narmada Bachao Andolan calls upon the Government of India 
and that of Madhya Pradesh to scrap this Maheshwar Project that is 
destructive for the affected people and the state and people of 
Madhya Pradesh without further delay , and to implement the cheaper 
and better energy options such as pump storage on existing dams, 
demand side management measures and bio- mass based dispersed power 
production that were detailed in the Task Force report of the Madhya 
Pradesh government.

The Narmada Bachao Andolan understands that the Indian government 
will not be able to fund this expensive Project on its own. Yet, if 
small amounts of public funds are injected into the Project simply in 
order to force the people out of their homes, the affected people of 
the valley reiterate their intentions never to let this dam be built 
and assert that they will use all means at their command through non 
violent direct struggle, legal redressal and mass mobilization in 
order to stop this Project.


Chittaroopa Palit                     Urmila Patidar 
Alok Agarwal

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