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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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