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dam-l LS: Siemens under scrutiny Over Maheshwar Project
Source: The Times of India, March 8, 2000
Siemens under scrutiny over power project
By Manik Mehta
FRANKFURT: A hydro-electric project in Maheshwar in
the Narmada Valley, in which German multinational
Siemens is involved, faces extensive scrutiny following
allegations that the company had not conformed to
guidelines set by the German government for providing
guarantees.
An independent German organisation, Urgewald, which
monitors progress of developing nations, has alleged that
Siemens wilfully gave wrong information in its application
for official German guarantees and had thus violated the
guidelines of the Hermes export credit insurance. It has
asked the German government to reject Siemens' plea for a
guarantee.
Urgewald also claimed that the protests at the site of the
dam, which allegedly threatened the existence of 40,000
peasants faced with eviction from their dwellings around the
site, had once again flared up.
Siemens will be supplying components valued at $175
million for the planned power station. The German
multinational, which has business interests ranging from the
energy sector to telecommunications, is keen to tap India's
"colossal energy demand".
Urgewald alleged that Siemens had the turbines and
generators for the project manufactured in Russia. As a
result, a "substantial part of the supplies to be made" were
not of German origin, a condition for the Hermes guarantee,
an Urgewald spokeswoman said.
The Hermes guidelines state that "export guarantees can be
undertaken only if the services (including parts, components
or products) are largely of domestic (German) origin".
Foreign supplies can "make up a share of 10 per cent."
Wolfgang Breyer, Siemens' spokesman, dismissed the
allegations. He, however, confirmed that large parts of 10
turbines and generators meant for the Maheshwar project
are to be manufactured by companies in St Petersburg,
Russia. Siemens has minority stake in the Russian
companies LMZ and Elektrosila which manufacture
generators and turbines.
Supplies of non-German origin would account for at the
most a quarter of the total supplies envisaged under the
entire contract, which will also include transformers, switch
systems and engineering services, Breyer said. He pointed
out that the non-German component was necessary
because Siemens would otherwise not be able to compete
against international bidders, given the extremely high cost
of production in Germany.
In 1997, the German government signalled its agreement to
provide a tentative coverage for the Siemens project, but
final approval for the guarantee has not been issued.
Berlin-based government sources said on condition of
anonymity that there had been wrangling between two
different ministries represented in an inter-ministerial
committee set up to clear the project. The economic
ministry supports the Hermes guarantees whereas the
ministry for economic cooperation, which oversees aid to
developing countries, is against it, they said. The ministry for
economic cooperation has taken a tough stand against India
and frozen aid since the nuclear tests of 1998.
However, Urgewald said it is concerned over another
aspect. Siemens has been assuring that the resettlement of
23 villages in the region is making headway and a
committee comprising representatives of the local
population is monitoring whether the "compensation is
functioning''.
However, Urgewald alleged that "not a single Indian family"
had so far been compensated with any alternative land.
Repesentatives of the affected population, according to it,
had also not been included in the monitoring committee.
(IANS)