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NBA Press Release                                                 25th March 2000


In an act of supreme contempt for democratic processes and the human rights of the people of the Narmada valley and of India, the US power utility Ogden Energy Group which travelled to India this week as part of the corporate entourage accompanying US President Bill Clinton signed an agreement with the private promoters S.Kumars on the 23rd of March to invest 49% equity into the privatized Maheshwar Hydro- Electric Project. Exposing completely Clinton's environmental and human rights doublespeak and his comments at the public demonstrations of opposition at the Seattle convention earlier this year being a wake up call for the developed countries of the world, this hasty and ill considered investment shows up Clinton's much touted visit for what it really was - an act of commitment to the interests of the American big business overwhelming any respect for the common law of India and the constitutional and human rights of the Indian people.

The controversial and destructive Maheshwar Project is a big dam being built on the river Narmada which will affect the lives and livelihoods of nearly 40,000 people of 61 villages of Madhya Pradesh whose lands and homes will be partially and fully submerged by the dam. This Project which has no irrigation component has a proposed installed capacity of 400 MW .Yet the actual average firm power of the Project will be only 65 MW. Moreover while the Maheshwar dam will generate power for only 1- 1.5 hours a day for 8 months of the year, this power will be one of the most expensive in the country yet with the levellised tariff at point of production being Rs.6.52 and the cost of peaking power being Rs.9.65 per kWh . Clearly when the power reaches the consumer, its cost will be anywhere between Rs. 12 - 15 per kWh - a prohibitively expensive tariff that will put this power out of reach of any domestic, agricultural and industrial consumer in the country.

Soon after the news of the proposed tie-up between Ogden Energy Group and the S.Kumars was reported in the daily newspapers a couple of months ago, the Narmada Bachao Andolan and the affected people of the Narmada valley wrote to the Ogden group expressing their disquiet about the proposed investment and pointing out that not only was the Project of no real public utility to the people of Madhya Pradesh because of the prohibitively high cost of power, but also that in the last three years , the Project authorities have not been able to show the affected people a single square inch of cultivable land that they are legally required to do before commencing on any work on this Project. The affected people wrote to Ogden asking that no decisions about the investment should be taken without representatives of the company actually visiting the affected villages. On receiving no answer, nearly 300 newly elected Panchayat representatives of the affected area at the village, Janpad and District levels sent the Ogden Energy Group a resolution opposing the Project. However till date no Ogden representative has visited any of the affected villages or spoken to the affected people or members of their organisation - the Narmada Bachao Andolan. Yet the company has gone ahead to sign an agreement for investment into this destructive Project displaying their deep contempt for and indifference to the interests of the 40,000 affected people. It may be noted that the Maheshwar Project has a problematic history since its inception. The Project which was originally with the Narmada Valley Development Authority of Madhya Pradesh was transferred to the Madhya Pradesh Electricity Board in 1989. The project was privatized in 1994 and was handed over to the private promoters S.Kumars. Since then four private multinational companies have entered and left the Project. Of these three companies - Pacgen of the U.S and Bayernwerk and VEW Energie of Germany quit from the Project in 1998 and 1999 directly because of the strong popular resistance on the ground as well as deep flaws with the rehabilitation and economic aspects of the Maheshwar Project.

The Narmada Bachao Andolan expresses shock not only at the contemptuous attitude of the Clinton led US administration and the US multinational - Ogden Energy Group, but also at the subservient attitudes of our democratically elected state and Central governments and their unholy haste in trying to tie up finances for this destructive Project that will mean pauperization not only for the directly affected people but also for all energy consumers in Madhya Pradesh.

It may be noted that on the 23rd of March along with the agreement between the Ogden and S.Kumars, the Madhya Pradesh state government also signed an escrow agreement with Ogden that will guarantee the payment of nearly 600 crore Rs. annually to the private producers along with an assured return of 16% on equity, for the next 35 years whether the expected amount of power is produced or not. This money will be transferred automatically from the state treasury to the account of the private producers under this agreement. Since the Madhya Pradesh Electricity Board does not have the required financial position to make this annual payment it is proposed to do away with the welfare scheme of free single-point connections for the poor, subsidized electricity for the irrigation sector as well increase the tariff throughout the state substantially. This will mean a sharp decrease in the agricultural and industrial production as well as darkness in the homes of common people .This is especially incomprehensible because the Madhya Pradesh government had responding to the popular movement in the valley constituted a Task Force Committee to review the Project in 1998. At the end of long deliberations lasting 8 months ,the Task Force had submitted a report which detailed cheaper and better power alternatives to the Maheshwar Project

Simultaneously, the Central government is pressurising the Central Electricity Authority - the apex electricity body in the country to give a fresh clearance to the Maheshwar Project at the increased cost of Rs. 2200 crore Rs. - 33% over the earlier approved cost. The CEA had earlier last year turned down the proposal because of the prohibitively high cost of power. Even as the deliberations continue whether to approve the Project that does not comply with the minimum norms, the Narmada Bachao Andolan has served the CEA with a legal notice on all these violations.

The Narmada Bachao Andolan recognises that the elected governments of the country have forsaken the objective of national interest and are conniving actively with foreign multinationals to loot the public treasury and pauperise the common people of the country. It seeks to remind the powers that be that the peasants and the tribals of the valley had in 1993 compelled the largest international financial interest - the World Bank to withdraw from the Sardar Sarovar Project. In 1998 and 1999, it compelled 3 multinational companies to withdraw from the destructive Maheshwar Project. In the coming months it will intensify its struggle at the state, national and international levels , expose the real nature of the Project, demand accountability from elected governments and succeed in stopping the destruction of this rich area and darkness for the people. The struggle will ensure that there is no recurrence of East India Companies in free India.

Chittaroopa Palit