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DAM-L LS: Ogden Quits Maheshwar (fwd)
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Date: Fri, 15 Dec 2000 11:12:35 -0800 (PST)
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subject: LS: Ogden Quits Maheshwar
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INTERNATIONAL RIVERS NETWORK
PRESS RELEASE
December 14, 2000
Contact:
Patrick McCully
Campaigns Director
Tel: 510-848-1155
patrick@irn.org
Ogden Corp. Quits Maheshwar Dam Citing Economic Concerns
New York-based Ogden Corporation have ended their involvement in the
controversial Maheshwar Dam on India's Narmada River. Mr Kent Burton,
Ogden's Vice President for Policy and Communications, told IRN today
that the company had decided to quit the dam due to "growing concerns
on project economics".
"IRN welcomes Ogden's decision to pull out of the Maheshwar dam," says
Patrick McCully, IRN Campaigns Director. "This is yet more evidence of
the non-viability of this project and of big hydro projects in general.
Its now time for Siemens and other foreign companies involved in this
disastrous project to follow Ogden's lead," McCully added.
"Ogden's prudent decision should serve as yet another warning to Indian
and foreign investors to stay away from this economically unviable and
destructive project," says Chittaroopa Palit, Narmada Bachao Andolan
(NBA - Save the Narmada Movement) activist. "We call on the Indian
government to scrap the dam and implement viable alternatives to meet
the energy needs of the people of India", says Palit.
Ogden signed a Memorandum of Intent to take a 49 percent equity share
in the Maheshwar dam in March, 2000. Since then the NBA, IRN and other
human rights and environmental organizations have repeatedly drawn
Ogden's attention to the poor economics and disastrous human rights and
environmental impacts of the project.
Ogden is the latest in a series of foreign companies to have dropped
out of Maheshwar. In 1998, Pacgen, a subsidiary of Oregon power utility
Pacificorp, withdrew their commitment to take a 49% share in the
project. Pacgen's stake was then taken up by German power utilities
Bayernwerk and VEW Energie, who then in turn withdrew in 1999.
In June 2000, after a highly critical report on the project was
published by the country's development ministry, the German
Hypovereinsbank cancelled its planned investment in Maheshwar.
Several foreign companies remain involved in the dam, most notably
engineering company Siemens of Germany. The German Development
Ministry's report on the dam, however, was a serious blow to Siemens
and forced them to withdraw their application for an export credit
guarantee from the German government. Siemens plans to sell generating
equipment and take an equity share in Maheshwar.
Others involved in the project are ABB Portugal, which is set to sell
equipment to the dam and UK engineers W.S. Atkins who are preparing -
in total secrecy - an environmental assessment of the project.
The Maheshwar Dam, located in Madhya Pradesh state in central India,
would affect around 40,000 farmers, wage laborers, fishers and crafts
people in 61 villages and submerge about 1,100 hectares of rich
agricultural land. Many of these people would lose part or all of their
lands, while others would lose their source of livelihood. Local
people, led by the Narmada Bachao Andolan which has campaigned for more
than a decade to stop dams on the Narmada River, are fiercely opposed
to the project and determined that it will never be completed.
Project promoter S. Kumars, an Indian textile firm with no prior
experience in dam building, is currently seeking financial backing from
Indian public financial institutions, such as the Power Finance
Corporation, Industrial Finance Corporation of India, and the Housing
and Urban Development Corporation. Preliminary construction work has
been done on the dam.
The recent report of the World Commission on Dams has highlighted the
poor economic performance of large dams. The World Bank-sponsored
commission found that the average cost overrun for the 81 projects it
reviewed was a massive 56% and that hydro projects produced on average
less energy that claimed in project documents.
####
for more information
Patrick McCully - 510 848 1155 patrick@irn.org
Chitaroopa Palit - nobigdam@vsnl.com
www.narmada.org
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