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Thursday Jul 13 2000
German report criticises MP govt, Maheshwar project
Gurbir Singh
MUMBAI
A REPORT of the German development ministry has indicted the Maheshwar Hydroelectric Project and the Madhya Pradesh government for the poor relief and rehabilitation measures. The Shree Maheshwar Hydro-Electric Power Corporation Ltd, promoted by the S Kumars group, is developing the Rs 2,000-crore private sector power project near Mandaleshwar (Madhya Pradesh) in the Narmada river basin.

The report’s likely impact on an export credit guarantee provided by the German government’s export credit agency Hermes is yet to be seen. The export credit is tied to the sale of power generation equipment from engineering giant Siemens.

The German ministry of economic cooperation and development commissioned the report in May, 2000. The report, recently submitted to the German government, has pointed out that ‘’significant uncertainty exists 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 this problem.’’

Aloka Bannerjee, senior vice-president with Shree Maheshwar Power, said any cancellation of loan would not affect the project since the company had arranged financial guarantees from an alternative consortium of banks. She, however, clarified that she could not comment on the report since the company had not yet obtained a copy.

‘’We were expecting this. The German ministry has been working hand-in-glove with the Narmada Bachao Andolan,’’ responded Mukul Kasliwal on behalf of the S Kumars group. ‘’The German government has been dilly-dallying since 1998, and they commissioned this report because an earlier German Embassy survey had okayed the rehabilitation measures,’’ he added.

Kasliwal also alleged that one of the German team members, Shekhar Singh, was a known opponent of power projects.

The German development ministry has been involved with the project since the single largest foreign component of the hydroelectric project is a Rs 500 crore loan from the German bank, the Hypo Vereinsbank. Since the loan is tied to the purchase of power equipment from Siemens, the company had applied for an export guarantee for the project.

Initially, the Christian Democratic government had cleared the project in 1997, but with the Social Democrat-Green coalition coming to power in 1998, the project came under review.

The German ministry of development subsequently commissioned a team of environmental experts to study the Maheshwar project.
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