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NBA Press Note                                                 4th July 2000



In a very significant development, a hard hitting report of the Development Ministry of Germany made public late last week has severely indicted the social and environmental viability of the Maheshwar project and found that the rehabilitation of the thousands of affected families is well nigh impossible. The Maheshwar Hydroelectric Project is a big dam under construction on the river Narmada in Central India. A team of three internationally renowned experts was commissioned by the German Development Ministry in May-June this year to assess the ground realities in the project impact zone, in order to be able to take a decision on the Siemens application for a Hermes export credit guarantee for the Maheshwar Project. The report has confirmed the issues being raised by the three-year-old struggle of the local people which has been carrying on in the face of governmental apathy and severe police repression. The German Development Ministry has welcomed the report and said that it only confirmed their expectations. The Green Party has also come out with a statement demanding that the Hermes guarantee must be immediately refused.

In the wake of this report, which has exposed the fundamental and irreparable flaws in the Maheshwar Project and the complete impossibility of any fair and just resettlement and rehabilitation, the mass organisation of the affected people -the Narmada Bachao Andolan calls upon the German Government to finally and decisively refuse the Hermes export guarantee sought by Siemens for the Project. It also urges the Govt. of India as well the Govt. of Madhya Pradesh to take cognizance of this report and immediately scrap the destructive project. It may be recalled that the Reports of the Task Force constituted by the Madhya Pradesh government and that of the Environment Ministry of the Central government in 1998and 1999 had come to similar conclusions about the Project but the Central and state governments had simply sought to ignore them.

The report of the German government notes that despite the fact that the project is already under construction, even the most preliminary demographic and socio-economic data about the impacts is totally unavailable. It says that "Significant uncertainty exist 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 the problem." It also says that there is uncertainty about the number of people to be seriously affected and that the authorities are unlikely to "identify the thousands living in areas not yet agreed by the authorities to be affected by the Project or those whose livelihoods are affected". The Narmada Bachao Andolan has estimated that the numbers of such families living on sand quarrying, fishing, draw down agriculture, etc. whose livelihoods will be affected by the Project is around 7000-8000 families.

It notes that the affected people have never been consulted or properly informed about the Project and that in the absence of the same, the Project has been sought to be continued with the use of brute force and human rights violations. It clearly says that "the approach of the rehabilitation program till date has failed to be transparent ,participatory and democratic, and dissent has been handled with police force rather than communication."

Noting the most flagrant and open violations of the Rehabilitation policy of the Madhya Pradesh government as well as the statutory clearances of the Central Ministry of Environment and Forests the team concludes that "the Project has not implemented the land for land policy set by the government of Madhya Pradesh and by international standards" and that the "the R&R implementing agency has not allocated land to the landless, as called for in the environmental clearance of the Ministry of Environment and Forests and, in any case, required by international and other national standards".

Instead it found that the Project authorities have misinformed the affected people about their rights in order to compel them to accept cash compensation rather than land, and in some cases where the affected people insisted on their rights and refused to accept cash compensation, stones were dumped onto their lands by the Project authorities in order to bulldoze them into submission. It found that in the cases that people had accepted cash in lieu of land, "the damage to family income and future prospects arising from cash compensation instead of land for land are already evident in the project area and the validity of cash compensation, given the misinformation about the R&R policy, is questionable."

It concludes that there is no cultivable land for the rehabilitation of the affected people available in sufficient quantity even by the admission of the Government of Madhya Pradesh itself, and that "if the R&R policy were executed as provided, the additional cost to the project would require an entirely new financing package several times larger than currently provided for R&R."

It is thus clear that in the absence of large amounts of cultivable land and financial resources and institutional capacities to ensure a just and fair resettlement of all the affected people, rehabilitation is impossible.

The Maheshwar Hydroelectric project, one of the controversial 30 big dams being built in the Narmada Valley in Central India, is the first privatized hydel project in India. The Project will affect the homes, lands, and livelihoods of approximately 40,000 people of the area and submerge thousands of acres of rich, agricultural lands, scores of sand quarries, draw down agriculture and a rich composite culture. Since 1997, the affected people of the area have been pointing out that the cost of power to be produced by this Project will be prohibitively high - at least 3-4 times the current cost of power in the area and the large part of power will be in the months when there is a surplus of power in the state. In these circumstances by putting electricity out of the reach of common people they anticipate that this Project will bring darkness to the people.

They have also been pointing out that in the absence of any cultivable land and other resources for rehabilitation , any further construction on the Project can only lead to a massive human tragedy and the use of the most unacceptable forms of repression and ruse on the people struggling against this destruction. Thus it is clear that this ill conceived and destructive Project that will pauperise the thousands of prosperous families currently living lives of dignity and working in this area, must immediately be scrapped, without any further delay.

The writing is clear on the wall. After this clear and unambiguous report, the German government must act swiftly to refuse the Hermes guarantee to the Maheshwar Project. For the people of the valley each day that the decision is kept hanging means a fresh outrage, a further violation and pushing of the Project towards a fait accompli.

The Narmada Bachao Andolan also calls upon the Ogden Energy Group, a power utility from the U.S. that has tentatively picked up 49% of the Project equity, vacated by the German companies Bayernwerk and VEW Energie in April 1999, to take cognizance of the ground realities and report of the Independent Review and withdraw from the Project, now rather than later. It may be recalled that this Project which is yet to achieve financial closure was planned to have 78% foreign investment . Yet besides the two German power utilities that withdrew from the Project in the midst of an indefinite hunger strike by the affected people in April 1999, even earlier in 1997 and 1998 , the Bechtel Enterprises and the PacGen companies of the U.S. had first involved themselves in and then withdrawn from the Project.

The single largest foreign component of this project is a loan from a private German Bank, the HypoVereinsbank, which is to give the Project over 5000 million Rs. This loan is tied to the purchase of power equipment from the Seimens. It was in the context of this loan that the Siemens has applied to the German govt. for an export guarantee for this project.

In 1997 the Christian Democratic Government of Germany gave the project in-principle guarantee. However, as disquieting news from the project started to filter in from India, the decision to confirm the guarantee was put on hold. The Social Democrats and Green coalition government that came to power in 1998 also refused to confirm the Hermes guarantee.

It was in order to resolve the contentious issues that the Development Ministry, Government of Germany commissioned a team of internationally renowned experts to travel to the affected area and meet the different stake-holders and access the ground realities of the resettlement. This team travelled to the valley in the first fortnight of June 2000 and met affected people as well as project promoters and govt. functionaries at the state and central levels. The team comprised of Mr. Richard E. Bissell, presently Executive Director of the Policy Division at the US National Research Council and former Chairman of the World Bank's Inspection Panel, Prof. Shekhar Singh, Environmental Expert, faculty member at Indian Institute of Public Administration, New Delhi and Member of the Environmental subgroup of the Narmada Control Authority- the statutory body looking after construction of the large dams in the Narmada valley. and Dr. Herman Warth, well known environmental consultant to the German and Austrian governments and to the European Union.

Finally the Narmada Bachao Andolan calls upon the Government of India and that of Madhya Pradesh to scrap this Maheshwar Project that is destructive for the affected people and the state and people of Madhya Pradesh without further delay, and to implement the cheaper and better energy options such as pump storage on existing dams, demand side management measures and bio- mass based dispersed power production that were detailed in the Task Force report of the Madhya Pradesh government.

The Narmada Bachao Andolan understands that the Indian government will not be able to fund this expensive Project on its own. Yet, if small amounts of public funds are injected into the Project simply in order to force the people out of their homes, the affected people of the valley reiterate their intentions never to let this dam be built and assert that they will use all means at their command through non violent direct struggle, legal redressal and mass mobilization in order to stop this Project.

Chittaroopa Palit     Urmila Patidar     Alok Agarwal