Introduction to this website
SARDAR SAROVAR
THE MAHESHWAR DAM
Links To Press Clippings
Other Resources On The Web
Read the latest NBA Press Releases
Images
Contact Information

Return To The Front Page



FINANCIAL VIABILITY

The critical analysis of the benefits proposed for the SSP is rounded off by a brief look at the financial viability of the SSP. The total cost of the project is still a much debated figure. The cost of the project was estimated to be Rs. 4,877 crores in 1981 (TEC 1981). This rose to Rs. 6500 crores in 1985. In 1991, Shri Babubhai Patel, the Narmada Minister of Gujarat, stated that the cost of the project was Rs. 9,000 crores. The Gujarat State budget for 1992-93 states that the cost of the project is Rs. 9,400 crores. All these cost estimates refer only to base cost and not the total project cost. The total cost of any project is the sum of the base cost and physical and price contingencies. The latter may be very roughly described as the effect of inflation over the implementation period of the project. In 1985 the World Bank estimated the cost of the project to be Rs. 13,640 crores in 1985 (WB 1985). This included a base cost of Rs. 6,264 crores, price contingencies of Rs. 6,574 crores and physical contingencies of Rs. 803 crores. In other words, the total cost of the project is more than double the base cost. Thus, if we accept that the base cost of the SSP was Rs. 9,400 crores in 1992, the total cost in 1992 terms should be around Rs. 20,470 crores.

It is shocking that the government and project planners have consistently chosen to ignore contingency costs when informing the public about the cost of the SSP. As recently as 1993, the Deputy Finance Minister at the Centre informed Parliament that the cost of the SSP was Rs. 6,400 crores. Such blatant disregard for facts is all of a piece with the overall attitude of secrecy and misinformation that seems to obscure the SSP like a miasma.

The true cost of the SSP may be even more than estimated above. The total cost of the power component of the SSP was estimated to be Rs. 1,700 crores by the World Bank (WB 1985). However, the Government of Gujarat announced in April 1993 (after the World Bank withdrawal) that the "Rs. 2,700 crore power component of the SSP will be privatised." In other words, the power component costs 58.8% greater than was assumed. If the total project cost has been similarly affected, the total cost of the SSP would rise to Rs. 21,700 crores. It should be kept in mind that the drinking water costs of the SSP are not included in any of these cost estimates. The "several thousand crores" required for this component of the project may raise the total cost well



Return to Contents Previous Page Next Page