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DAM-L LS: Frontline - A moral victory for the NBA (fwd)



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subject: LS: Frontline - A moral victory for the NBA
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Frontline,  Volume 17 - Issue 15, July 22 - Aug. 04, 2000
India's National Magazine
http://www.frontlineonline.com/fl1715/17151150.htm

A moral victory for the NBA

The report submitted to the German government by a team of 
independent experts raises serious doubts
about the record of the Maheshwar dam project in terms of 
resettlement and rehabilitation.

V.VENKATESAN
  in New Delhi

A REPORT on the non-viability of the Maheshwar hydroelectric project, 
submitted by three independent experts for the German government and 
released "unofficially" in June, represents a milestone in the 
struggle of the people who are about to be displaced by the project 
in Madhya Pradesh. The 10-page report (excluding annexures) was first 
'leaked' to the German media probably by a section of the German 
government, which commissioned the report. The Narmada Bachao Andolan 
(NBA), which is spearheading the struggle, made it available to the 
Indian media on July 4.

                        The report notes that even preliminary data on 
the socio-economic impact
                        of the project are unavailable. It points out 
that the affected people have not
                        been consulted or properly informed about the 
project and that it has been
                        sought to be implemented by the use of brute 
force and violation of human
                        rights.

                        THE single largest source of foreign funds for 
the Maheshwar project is a
                        loan of Rs.523 crores from a German bank, the 
HypoVereinsbank. The
                        loan is tied to the purchase of power 
equipment from the German company
                        Siemens. Siemens therefore applied to the 
German government for an
                        export guarantee for the project. The 
guarantee is to be given by Hermes, a private company. If Siemens 
suffers any
                        loss in the transaction, Hermes would pay it a 
token amount, while the bulk of the balance will be underwritten by 
the
                        German government. This is an understanding 
that the German government has with Hermes, and hence the
                        government's prior clearance is required to 
secure Hermes' guarantee.

                        As German law requires the government not to 
fund agencies involved in human rights violations, the government
                        found it necessary to determine whether the 
human rights of people living in the project area were indeed 
violated, as
                        alleged by the NBA. There were also complaints 
that the resettlement and rehabilitation (R&R) measures taken by the
                        Maheshwar dam authorities were inadequate.

                        In order to resolve the issue, the German 
Development Ministry sent the team of three experts to the affected 
area to
                        meet the various stake-holders and assess the 
ground realities of resettlement. This team visited the valley in the 
first
                        fortnight of June 2000 and met affected people 
as well as project promoters and government functionaries at the State
                        and Central levels. The team's terms of 
reference did not include the financial and environmental aspects of 
the project,
                        but these issues are dealt with in the report 
to the extent they are relevant to R&R.

                        The team comprised Richard E. Bissell, at 
present executive director of the Policy Division at the U.S. National
                        Research Council and formerly chairman of the 
World Bank's inspection panel, Prof. Shekhar Singh, environmental
                        expert, faculty member of the Indian Institute 
of Public Administration, New Delhi, and member of the environmental
                        sub-group of the Narmada Control Authority; 
and Dr. Herman Warth, environmental consultant to the German and
                        Austrian governments and to the European Union.

                        In March this year, the First Secretary of 
Economic Affairs in the German Embassy in New Delhi, Bierbrauer, 
visited
                        the dam site. Her report concluded that the 
dam construction was in an advanced stage and had reached a point of 
no
                        return. She reportedly admitted that it was 
difficult to determine the veracity of rival claims - those put 
forward by the
                        NBA as well as the project officials - as she 
was not an expert on the matter.

                        The experts' team in their turn found that the 
construction work had not progressed that far. A causeway for vehicles
                        used in the work was built across the river 10 
years ago. More recently, excavation was undertaken for the 
powerhouse,
                        and some protective walls were built to 
prevent seepage of monsoon-fed waters into the site. Owing to 
protests against
                        the R&R plan, work failed to meet the 
deadlines, and an attempt to resume the project would require 
establishing new
                        time schedules for R&R and construction, the 
team observed.

                        Hermes will provide a guarantee to Siemens 
only with the approval of the inter-ministerial committee comprising 
the
                        Development, Foreign, Economic and Finance 
Ministries. The Green Party, a partner in the ruling coalition, has 
said
                        that a Hermes guarantee for the export of 
Siemens' turbines and generators for the Maheshwar dam would appear
                        irresponsible in the wake of the report.

                        The decision of the inter-ministerial 
committee is awaited, and the delay has caused considerable anxiety 
to the activists
                        and the people the Maheshwar dam will 
displace; not to mention S. Kumars, the private company entrusted 
with the
                        development of the project. The NBA says that 
for the people of the valley each day that the decision is kept 
hanging
                        means a fresh outrage, a further violation and 
a further push to the project to the state of being a fait accompli. 
Those
                        familiar with German policy-making expect 
intense lobbying by both sides before a decision is taken on the 
report in
                        the coming weeks.

                        Activists point out that while the Development 
and Foreign Ministries are in favour of accepting the report, and 
barring
                        a Hermes guarantee to Siemens, the opinion of 
the other two Ministries are yet to crystallise. Indications, 
however, are
                        that it would be difficult for the German 
government to reject the report as it is authored by experts who have
                        international credibility.

                        Siemens could still go ahead without the 
Hermes guarantee and export its equipment for the project. It would, 
however,
                        suffer an erosion of credibility.

                        THE experts' team spent 10 days in India, and 
recorded what it learnt from its interactions with a cross-section of 
the
                        people associated with the project in various 
ways. It held more than 30 meetings with stakeholders (the project
                        developer, project-affected people, government 
agencies, and other interested parties).

                        The annexures appended to the report include 
the list of official documents the team went through, excerpts from
                        meetings with people, villagers and officials, 
and a detailed account of their work during the visit. S. Kumars 
described
                        the report as unauthentic. However, it 
refrained from commenting on the findings.

                        Many of the team's findings have already been 
raised as issues by the dam activists. Uncertainty about the extent of
                        land that will be seriously affected 
(submerged or waterlogged) by the project and the number of people to 
be affected
                        in various degrees is one such.

                        Although there are hundreds of families 
engaged in river-based professions in Maheshwar, officials who met the
                        experts' team apparently underestimated their number.

                        The team noted that the project provided 
instances of the most flagrant violation of the rehabilitation policy 
of the
                        Madhya Pradesh government as well as the 
statutory clearances of the Ministry of Environment and Forests 
(MoEF).

                        The report mentions that the project 
authorities 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, stones were dumped 
on their lands in order to bulldoze them into submission.

                        In the opinion of the team, as per 
international standards of R&R (currently being followed for Sardar 
Sarovar and
                        Tehri), the Madhya Pradesh Electricity Board 
(MPEB), which has won the contract for R&R from S. Kumars, should
                        provide free of cost a minimum of two hectares 
of irrigated land (of a quality not less than the land acquired) per 
family,
                        whether landed (where it would be in lieu of 
land acquired up to two hectares), landless (including those whose 
sources
                        of livelihood is affected) or encroachers.

                        It is understood that those who got cash 
compensation were ignorant of this norm and were deprived of their 
free
                        entitlement. Cash compensation is only a 
grant-in-aid, and it is not at all sufficient for a family to buy, in 
the current
                        market economy, land elsewhere, the report 
suggested. Many of those who availed themselves of cash compensation
                        have exhausted it and are now in distress 
after leaving their lands, the report says. "There is no reason why 
Indian
                        citizens being displaced by a private sector 
project should be discriminated against to the benefit of the private 
investor,"
                        the report said.

                        The report found that the project recognised 
only sons who had reached the age of majority (and not major 
daughters)
                        for purposes of R&R. The team suggested that 
the project treat all major (married) sons as a separate family and
                        unmarried major sons and daughters as half a 
family and allocate each of them half the land and other forms of
                        compensation. "This is being provided for in 
other projects; besides, it is discrimination against women if only 
major
                        sons are so recognised," the report stated.

                        The report concludes that if R&R were executed 
as provided, the additional cost to the project would require an 
entirely
                        new financing package several times larger 
than that currently provided. It is thus clear that in the absence of 
large areas
                        of cultivable land and substantial financial 
resources and institutional capacities to ensure the just and fair 
resettlement
                        of all the affected people, true 
rehabilitation is impossible.

                        According to the NBA's estimates, about 40,000 
people will be displaced by the dam, if it comes up. The NBA alleges
                        that the electricity to be generated by the 
dam would cost four or five times more than the power currently 
generated in
                        Madhya Pradesh. S. Kumars is yet to rebut this 
argument convincingly. Contractors allegedly use child labour and
                        bonded labour at the dam site.

                        The NBA has called upon Ogden Energy Group, a 
power utility from the U.S. that has tentatively picked up 49 per cent
                        of the project equity (a memorandum of intent 
was signed by Ogden during President Bill Clinton's visit to India in
                        March) given up by the German companies 
Bayernwerk and VEW Energie in April 1999, to take cognisance of the
                        report and withdraw from the project. Ogden 
has promised, in response to the talks with activists and the 
stakeholders,
                        to look into it in August.

                        The project was initially meant to have 78 per 
cent foreign investment. Bechtel Enterprises and the PacGen companies
                        of the U.S., which had first involved 
themselves in the project, later withdrew. They were followed by 
Oregon Utility
                        PacificCorp, and the Dutch Bank, ABN-Amro.

                        The Maheshwar financial plan also envisages a 
Rs.182-crore loan from the HypoVereinsbank as well as from the BPI
                        Banco of Portugal to pay for equipment from 
ABB Portugal. The loan for the ABB equipment will be guaranteed by
                        COSEC, an insurance agency from Portugal. It 
is clear that these huge corporations, despite the overwhelming
                        imperative to increase their markets at great 
social and environmental costs, are not prepared to take any risks in 
the
                        process; they want public funds to guarantee 
their business.

                        With a question mark hanging over the supply 
of equipment by Siemens for the project, and with Ogden sending
                        signals for a rethink, observers wonder 
whether the financial closure of the project would be feasible at all 
in the near
                        future. The Central Electricity Authority 
(CEA), which had given techno-economic clearance to the project 
earlier, has
                        apparently proposed to clear its firm 
financial package. The new package represents a very substantial 
increase (of
                        nearly a third) over the earlier cleared cost 
of Rs.1,569 crores. The NBA has sent a legal notice to the CEA urging 
it to
                        revoke the techno-economic clearance and 
reject the proposed financial package, in view of violations of the 
conditions
                        in the clearance by the project authorities. 
Financial closure of the project is not possible without the CEA's 
clearance
                        for the firm financial package.

                                    Copyrights © 2000, Frontline & 
Tribeca Internet Initiatives Inc.

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