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THE MAHESHWAR DAM
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Press Note                                                 November 30, 1999


NO GERMAN MONEY FOR MAHESHWAR DAM
Demonstration of Maheshwar Dam Affected People at German Embassy

Around 150 women and men of the Maheshwar Dam affected area demonstrated at the German Embassy even as around 500 people, both men and women - peasants, dalits, Kevats and Kahars affected by the Maheshwar dam being built on the Narmada river, continued to sit on dharna at Rajghat beginning yesterday. They will sit on dharna till the evening of the 1st of December. These hundreds of Maheshwar dam affected people have come to Delhi in order to urge the German government to refuse an export (Hermes) guarantee to the Maheshwar Project and to ask the Central Ministries of Environment and Power to immediately withdraw environmental and techno-economic clearances in light of clear and proved violations in the project, such violations having been detailed in the the recently available Report of the Ministry of Environment and Forests.

Around 150 affected people and other supporters from Delhi demonstrated at the German Embassy to protest against the possibility of the German Government sanctioning a guarantee for a loan to the project. They handed over 10,000 protest postcards to the officials at the German Embassy. A delegation of affected people and activists from the Andolan had an hour-long meeting with the First Secretary (Economic and Commercial) Ms Bierbrauer, in which they shared their anxieties and concerns. The village people appealed to the German Government not to give a guarantee to this destructive dam and asserted that under no circumstance would they let the dam be built, even if they had to sacrifice their lives in the process.

It may be noted that 76% of the total capital outlay of the Maheshwar Project will come from foreign sources. So far, this foreign investment has been marked by repeated withdrawals. In 1997, Bechtel a US power utility, moved out of this project; then in 1998, PacGen another US power utility also moved out. In April 1999, during the course of a 21-day fast by oustees and members of the Narmada Bachao Andolan (NBA), two German utilities Bayernwerk and VEW Energie which together would have contributed 49% of project equity - withdrew from Maheshwar refusing to be a party to environmental and human rights violations. As of now the Maheshwar Project has no independent foreign investors. The Siemens share of 17% and the ABB share of 10% is linked to the sale of their power equipment.

However, the German Hypovereinsbank is prepared to give the Maheshwar Project a loan of Rs. 523 crores in order to allow Siemens to supply equipment to the project and has applied to the German government to guarantee the loan. Over the last 4 weeks the people of the Maheshwar area had embarked on an extensive postcard campaign. About 10,000 postcards against the project have been signed by people affected by the project. The 10,000 postcards that were brought to Delhi by people in the impact zone of the Maheshwar dam call upon the German government not to give this guarantee for their destruction and give notice of the fact that the people will never allow the dam to be built.

The Maheshwar Project being built on the Narmada in Madhya Pradesh will affect around 40,000 people in 61 villages in the region submerging hundreds of acres of fertile, irrigated black cotton soils, scores of sand quarries and a rich riverine economy. This dam is a hydro-electric project with no irrigation potential. Although the project will have a proposed installed capacity of 400 MW, the average firm power will be only 82 MW, and power production in the 8 non-monsoon months will not be more than one-and-a half hours a day. Yet the cost of power from this project will be prohibitively high - an average of Rs. 6 to 8 per unit, with the cost of peaking power being Rs. 8 to 10 per unit at point of production. It may be recalled that the project was privatized in 1994 and handed over to the S. Kumars and that the S. Kumars have, even prior to the financial closure, inflated the project costs by 5 times from Rs. 465 crores to Rs. 2000 crores in the course of just 5 years.

It is clear that nobody will be able to buy the expensive Maheshwar electricity. Further, it is expected that when this expensive power feeds into the Madhya Pradesh grid, rising power costs will lead to a decline in agricultural and industrial production and consequently to the pauperization of the peasantry.

It must be noted that the project is still in its initial stages. No work has been done on the main dam at all. Only the powerhouse pits have been dug and a protection wall has been constructed.

The NBA has determinedly and resolutely fought the destructive Maheshwar dam over the last three years, and constantly challenged the underestimation of economic, environmental and cultural costs of the dam and the concurrent overstatement of benefits. It was when the project promoters were unable to offer or give cultivable agricultural land to a single project affected family, that the NBA petitioned the Ministry of Environment and Forests (MOEF) in 1998 demanding that environmental clearance be immediately revoked. Following this, a joint team of officials from the MOEF, Rural Development Ministry, and Water Resources Ministry conducted a field visit in the Maheshwar Project impact zone on 14-15 October 1998.

It maybe noted that the Environment Ministry had stipulated in its conditional clearance of 7 January, 1994 that all persons affected by the Maheshwar project must be rehabilitated and resettled by 1997-98. This environmental clearance which is a statutory requirement also clearly stated that the Environment Ministry reserves the right to revoke the Environmental Clearance of the Project (under the Environment Protection Act 1986) in case of violation of stipulated conditions.

The Madhya Pradesh government's rehabilitation policy for the oustees of the Narmada Project (1997) which stipulates land-for-land based rehabilitation was strengthened by subsequent clearance conditions which stated that this package must be extended to adult sons, landless people and encroachers. The environmental clearance also stated that land capability surveys must be carried out in order to establish the cultivability of lands and that project work could only be initiated after all arrangements for rehabilitation and environmental mitigation were in place.

The investigation report, which has now become available has accepted that the project affected area is "prosperous and wealthy" with "deep fertile and black cotton soil irrigated by pipelines drawn from the Narmada river and follow three crop rotations in a year" and a variety of rich riverine resources. Moreover, while the State's Rehabilitation Policy provides "land for land", it notes that there is actually no agricultural land available for the rehabilitation of project affected people. The Ministry report has clearly recommended that in order for the Ministry to take a decision on whether to revoke the environmental clearance, the project authorities must be asked to identify and demonstrate sufficient agricultural land for the rehabilitation of the oustees within 3 months, as well as conduct a resurvey of the area and number of people to be affected by the project. It has also recommended that all blasting work on the project site must be stopped until the affected people of the first village Jalud are rehabilitated.

The conclusions of the MOEF report unambiguously confirm the contentions of the NBA and bear out the destructive potential of the Maheshwar dam. Given the non-fulfillment of the a priori conditions, the NBA and the people of Maheshwar call for a revoking of environmental clearance and an immediate halt to dam construction.

The NBA also calls upon the Central Electricity Authority (CEA) to revoke the techno-economic clearance provided to the dam. The CEA had given a techno-economic clearance to the Project, subject to the implementation of the environmental mitigative measures as stipulated in MOEF's letter. In the face of flagrant and illegal violations of the environmental clearance, the NBA demands that the CEA withdraw techno-economic clearance as well and stop all project-related work. The Tata Institute of Social Sciences report, the report of the Madhya Pradesh government's Task Force and the MOEF field report all point to innumerable resources which have so far not been accounted for and the NBA asks the CEA to order a fresh cost-benefit analysis of the Maheshwar project.

In the last 5 years the project promoters have recklessly inflated project costs. The CEA should take cognizance of this adhoc increase in project costs which make the cost of power from this project prohibitive. Thus this project has ceased to be a public interest project and in fact currently works against the interests of electricity consumers in Madhya Pradesh. Clearly this is no longer a least cost project but has become an inferior endeavor which must be rejected.

In 1998, 25,000 people stormed the dam site and sat on dharna for 21 days during which 6 of the protestors went on indefinite fast. As a consequence of this the Madhya Pradesh government was compelled to announce a review of the Maheshwar Project putting a halt to work on the dam, powerhouse and land acquisition. A Task Force was set up to conduct a review of the Maheshwar Project as well as other big dams in the Narmada Valley in order to create an alternative framework for development of resources in the Valley. Senior government officials, independent energy experts and representatives of the NBA were part of this Task Force.

The Task Force has now published its Report in which it has recommended that work on the Maheshwar dam should be halted and a fresh analysis of costs and benefits should be undertaken to establish the viability of the Project, as well as to devise a rehabilitation plan based on the actual availability of land and on the principles of land for land and land to the landless. It has also suggested various alternatives to the dam including

  1. a 180 MW pump storage,
  2. dispersed micro-hydel,
  3. biomass waste generation,
  4. demand-based management measures, and
  5. optimum use of oil-based plants

The people hope to receive satisfactory answers to their questions. The struggle against the Maheshwar dam has been resolutely pursued for the last two and a half years. In the course of this struggle, people have captured the dam site 8 times, barricaded all roads leading to the dam for 3 months, held repeated massive demonstrations and rallies and embarked on indefinite fasts and dharnas on numerous occasions. This time too the people are completely resolved to embark on indefinite public as well as legal action if their demands are not met.

Dhani Jiji Kahar, Village Pathrad
Kalu Singh Mandloi, Village Mardana (Maheshwar)
Chittaroopa Palit, Narmada Bachao Andolan