US group quits project to construct Indian dam

Financial Times; December 16, 2000

By Allan Beattie

Ogden Corporation, the US energy company, has abandoned its plans to build part of the controversial Narmada dam in western India, citing "economic concerns with the project".

The decision is the second heavy blow to private-sector involvement in building the Maheshwar hydroelectric dam, situated in the Indian state of Madhya Pradesh. Earlier this year the German government buckled under pressure from environmental activists and withdrew export credit guarantees to Siemens, the construction company also interested in building Maheshwar.

Ogden's withdrawal was hailed as a victory by the international coalition of campaigners that has been protesting against the dam's construction.

"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," said Chittaroopa Palit, an activist with the local Narmada Bachao Andolan (Save the Narmada) movement.

"We call on the Indian government to scrap the dam and implement viable alternatives to meet the energy needs of the people of India."

The Indian supreme court ordered work to restart on the Narmada dam in October after a six-year legal delay.

NBA activists targeted Ogden offices in Washington and New York as part of their campaign against the dam, which they say threatens the livelihoods of hundreds of thousands of local people and risks massive environmental destruction. But yesterday Kent Burton, Ogden's vice-president for policy and communications, declined to say whether public protest had been a factor in the company's decision.

During President Bill Clinton's visit to India in March, Ogden signed a memorandum of intent to take a 49 per cent equity stake in the corporation that will operate the dam.

Other international companies, including Siemens and the UK engineering company W.S. Atkins, are still interested in the project.

Large dam projects have come under pressure recently from a report by the World Commission on Dams, an international grouping of experts convened by the World Bank.

The commission said the benefits of large dams were routinely overstated and their human and environmental costs underestimated.

But Mr Burton said yesterday: "We have not changed the way we operate because of the World Commission on Dams. We do not feel constrained because of its report."

© The Financial Times Limited