The Maheshwar dam is one of the large dams of the Narmada Valley Development Project, which entails the construction of 30 large and 135 smaller dams in the Narmada Valley. The dam, slated to provide 400 Megawatts of energy and priced at 530 million dollars, is to be built in the Nimad region in Madhya Pradesh. Planned since 1978 and initially overseen by the governmental Narmada Development Authority, the dam construction was made the responsibility of the Madhya Pradesh Development Electricity Board (MPEB), a parastatal company, in 1989.
Due to massive protests surrounding the Narmada project and the withdrawal of the World Bank and bilateral aid donors from the Sardar Sarovar dam (downstream from Maheshwar in Gujarat), aid from developmental organisations became unlikely. Subsequently, in 1993, the concession for the project was awarded to S. Kumars, one of India's leading textile magnates, making Maheshwar the first privately financed hydroelectric dam in India. In 1994, the project received a conditional environmental clearance from the Central Ministry of Environment and Forests, MoEF.
The people to be affected by the project include titled land holders and long-term encroachers, who count officially as "project-affected persons" or PAPs; their compensation from S. Kumars is currently uncertain. In addition, a number of landless communities are directly dependent on the river for their sustenance. About a third of these people are Kevats and Kahars, ancient communities of fisherfolk, ferrymen, sand quarriers and cultivators of drawdown silt banks. If the dam is completed, they will lose their only source of livelihood without compensation. Rendered invisible by the dam builders, these people's status as Indian citizens is questioned. There seems to be no need for accountability to them. In total, approximately 35,000 people will be displaced by the project. 61 villages lie in the submergence zone.
1998 Task Force : The people's participation played no part in the dam's planning, until the NBA and the valley's inhabitants forced it. In response to concerns, the Madhya Pradesh government set up a Task Force in 1998 consisting of representatives from all concerned groups: the dam builders, the government, the NBA, and the affected people. The Task Force's report recommended a halt to construction of the dam pending the completion of a comprehensive and participatory review of the project's cost-benefit analysis, and of the viability of alternative forms of water and energy development. The MP government has, however, chosen to ignore these recommendations and work on the project continues.
Faulty cost-benefit analysis: No review of the planners' wilfully misleading cost-benefit analysis has been undertaken. The German NGO Urgewald states in their report on Maheshwar (1999), that "[i]f compensation at replacement value would be undertaken, the project would very likely not be economically viable." Erroneous data has been used, consistently underestimating the level of wealth and infrastructure in the villages, as well as the proportion of irrigated land. It follows that the affected people will not be adequately compensated for their losses.
Resettlement policies: One can draw the conclusion that the project's success is contingent upon the displacement and pauperization of 35,000 people. Illegal measures, such as forced acquisition of land and cash compensation instead of land-for-land resettlement, are not uncommon, in disregard of both resettlement policies set up by the state government (the 1989 Resettlement Policy of MP for the Narmada Projects) and the Task Force. Contrary to statements by the MoEF and S. Kumars, there is not enough land available for resettlement in Madhya Pradesh and whatever land exists is very often unsuitable for agriculture. Some of it even lies elsewhere in the submergence zone. There is also a backlog of resettlement from six other dams already built in the state, with approximately 100,000 people waiting for land-for-land resettlement.
Foreign investment : In light of the implausibility of support from either the World Bank or bilateral aid donors, the search for foreign investment continues. One of the earliest investors was the American utility Pacificorp, who withdrew in May 1998, stating concerns over social impacts and local opposition. Pacificorp's stake in SMHPC was then taken over by the German utilities Bayernwerk and Vereinigte Elektrizitatswerke Westfalen, VEW, who together would have acquired 49 % of the equity. In April 1999, they, too, withdrew, stating similar concerns. Their withdrawal, however, leaves a number of companies involved: the German company Siemens is still committed to providing turbines and generators in exchange for a 17% non-voting share of project equity. Swiss-Swedish ABB is also to provide equipment.
The withdrawal of these companies and the setting up of the Task Force are testimony to the struggles of the people in the valley in collaboration with the NBA. A massive grassroots movement has raised consciousness about people's rights and the ill-planned and deeply anti-democratic nature of the dam project and S. Kumars handling of it. Rallies have been held in the valley as well as in the town Mandleswar, gathering up to 12,000 people. There have been occupations of dam sites, at which people have been brutally manhandled, teargassed, and jailed by the police. Activists have gone on hunger strikes, and there have been demonstrations outside the German embassy and meetings with officials of, among others, the Central Electricity Authority in Delhi. This has made the project into a risky venture for investors, and forced debates about governmental and corporate accountability. Ultimately, the struggle forces the question of what development entails in India, and whom it benefits.