NBA Press Release
  16 March 2004
Save The Narmada, Save Humanity!

Hundreds of Maheshwar dam and Upper Beda dam affected people from Narmada valley protest at financial institutions in Bhopal, demand scrapping of large dams in Narmada valley, accountability for public money

Jail Road, Mandleshwar
District Khargone, Madhya Pradesh
Tel: 07283-33162

Rs. 400 crores state guarantee given by Uma Bharati government to Maheshwar Project privileges corporate interest of private company at the cost of public interest

Today, on the 16th of March 2004, nearly one thousand people from the Narmada valley affected by the Maheshwar and Upper Beda Projects in District Khargone reached Bhopal to begin a series of protests in front of various financial institutions financially supporting these Projects as well as the state government. In the morning, the affected people demonstrated at the offices of HUDCO (Housing and Urban Development Corporation of India), IFCI (Industrial Finance Corporation of India) and NHDC ( National Hydro-Development Corporation) located at the Paryavas Bhavan in Bhopal demanding accountability for the use of public money already invested in or being sought to be invested in the destructive Narmada Projects, demanded that no more public monies be jeopardised in the destructive Maheshwar Project. Subsequently, the affected people went to the office of the MPSIDC (Madhya Pradesh Industrial Development Corporation Limited) and demanded that the MPSIDC should attach and recover their outstanding of Rs. 70 crore from the S.Kumars by attaching the bungalows, factories, offices and other properties belonging to the S.Kumars situated at Mumbai, Bhopal, Dewas and other parts of the country.

It may be noted that since the last eight years the people of the Narmada valley have waged a strong struggle against the Maheshwar dam under the aegis of the Narmada Bachao Andolan. This mass struggle on the ground compelled several US and German power utilities to withdraw from this Project. Since 2001 all work was stopped on the Project and in December 2002, the movable and immovable properties of the Maheshwar Project was attached. However, despite several financial controversies surrounding this high cost Project that threatens to be another Enron, on the 28th of January 2004, the newly elected Uma Bharati government held a cabinet meeting in Maheshwar and announced a Rs. 400 crores guarantee for the S.Kumars promoted Maheshwar Hydel Project. This guarantee was surprising and illegal in the light of the fact that

The movable and immovable properties of the Maheshwar Project had been attached by the MPSIDC since December 2002 because the S.Kumars had willfully defaulted on a loan of Rs. 45 crores of public money Thus, even the dam site lands are not in the S.Kumars control there can be no possible basis for the state government to offer a state guarantee of Rs. 400 crores to the Promoters for the project. The CAG (Comptroller and Auditor General) Report for the year ending 2000 states that the loan given by the MPSIDC to the S.Kumars on which the S.Kumars has willfully defaulted was irregular in the first place being over the Rs. 3 crore allowable limits. The IFCI Report of March 2000 states that Rs. 106.4 crores of Project funds meant for the Maheshwar Project had been irregularly transferred by the S.Kumars to agencies unconnected to the Project and that no further disbursements of public money would be given to the Project without the entire sum being returned with the accumulated interest. That has not happened as yet. Moreover, this transfer of funds would amount to siphoning and diversion under RBI rules and should mean cutting off all public funds and not rewarding them with a Rs. 400 crore state guarantee.

Two CAG Reports state that the S.Kumars are yet to pay Madhya Pradesh government agencies crores of rupees that they were supposed to do at the time of the transfer of the Project properties over a decade ago.

Several S.Kumars companies SKNL (S.Kumars Nationwide Limited), Induj Enertech Limited and Modak Rubber have been declared by the MPSIDC and the IFCI to be willful defaulters or having indulged in the diversion of public funds.

On the 17th of February 2004, nearly 12,000 people affected by the Maheshwar dam had demonstrated against the decision of the state government to give a Rs. 400 crore guarantee to this destructive Project and had challenged the state government to reverse the decision within two weeks or face public protests and legal action. The government has taken no action in this regard. It is to confront the government on this guarantee and demand the scrapping of the Maheshwar dam that the people of the Narmada valley are on the streets of Bhopal

In the morning, the peasants and adivasis from the Narmada valley went to Prayawas Bhavan and began their demonstration outside the HUDCO office. The S.Kumars has given a proposal for a loan of Rs. 300 crores to HUDCO. On the demand of the people, the Regional Manager of HUDCO, Bhopal Shri Rajendra Mathur had to come out and listen to the people, accept and examine the documents, and answer the queries of the people. The NBA informed him of the various financial controversies surrounding the Project and its promoters including the attachment of the movable and immovable properties of the Project, the transfer of Rs. 106.4 crores of Project funds to companies unconnected to the Project, the non-payment of GoMP dues till date, and the willful defaulter status of various S.Kumars companies. The NBA informed him of the RBI regulations that stipulate that companies that are involved in willful default and other financial controversies are to be denied any further public funds as well as access to capital markets. Shri Mathur stated that the HUDCO had not yet taken any decision about sanctioning the said amount and they are examining the whole proposal critically, and that they would take cognizance of the various objections raised by the affected people and the movement.

A delegation from the NBA also met the Deputy General Manager of the IFCI at Bhopal. The NBA activists informed him that since the IFCI was the lead agency of the consortium that had lent public money to this Project, it is their responsibility to examine all financial irregularities and take urgent action on the same in order to recover public money. The officials at the IFCI informed the delegation that the IFCI was not putting any further public money into the Project, rather they were trying to recover their share from this sinking project.

Another delegation met senior officers of the NHDC (Narmada Hydro-Development Corporation) at Paryawas Bhavan. The delegation protested against the inhuman treatment being meted out to the oustees of the Narmada Sagar and Omkareshwar Projects, the failure of power production from the Project and warned the NHDC not to get involved in the high cost and destructive Maheshwar dam.

Subsequently, the oustees took out a rally and went to the office of the MPSIDC and demonstrated there. Senior officers of the MPSIDC met the demonstrators and answered their questions. It became clear from the discussion that both the loans given to S.Kumars by the MPSIDC Board were in contravention of the allowed limits and hence irregular. The activists demanded that in addition to the Maheshwar Project, other properties of the S.Kumars should also be attached and sold in order to effect recovery of the Rs. 70 crores of outstanding monies, and that the people would brook no agreement that would jeopardise public money as a result of political pressures and clout of industrialists. The MPSIDC officials assured the gathered people that they had already begun the wider process of recoveries by sending Revenue Recovery Certificates to the administrations in Indore and Mumbai.

On the 17th of March, the protestors will continue with their demonstrations in Bhopal this time in front of the state government. The NBA demands that the state government withdraw the Rs.400 crore guarantee and cancel the socially destructive, technically flawed and financially controversial Maheshwar Project. They want the government to implement available alternatives at a fragment of the cost of the expensive high cost Maheshwar Project and thus make available cheap and adequate power to every citizen of Madhya Pradesh. The protestors also demand the scrapping of the destructive Rs. 87 crore Upper Beda Irrigation Project in Khargone that will submerge the lands and homes of tribals and peasants in 14 villages in the area. They demand, that in lieu of the large hundreds dam, Rs. 1 crore must be distributed to each of the 72 command area villages making possible the construction of dispersed water alternatives as well as plentiful employment opportunities in each of these villages.

Suresh Patidar
Alok Agarwal
Chittaroopa Palit