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dam-l IRN STATEMENT ON MAHESHWAR: Green Group's red signal on dam

Source: Statesman, March 29, 2000

Green group’s red signal on dam

                      DESIKAN THIRUNARAYANAPURAM
                      STATESMAN NEWS SERVICE

                      WASHINGTON, March 28. — A leading international
environmental group has
                      urged a US company to withdraw from the
controversial Maheshwar dam project
                      on the River Narmada.
                      New York-based Ogden Corporation signed a
memorandum of intent on 23 March
                      with
                      the Madhya Pradesh government and S Kumar’s for
the 400 megawatt
                      Maheshwar Hydropower project as part of President
Bill Clinton’s India visit.
                      The California-based International Rivers Network,
in a letter endorsed by 124
                      organisations from 27 countries, called on Ogden
Corporation to withdraw from the
                      project.
                      According to IRN and the Narmada Bachao Andolan,
the Maheshwar dam would
                      submerge about 1,100 hectares of rich agricultural
land and displace more than
                      35,000 people in 61 villages.
                      The dam’s serious financial risk and intense
opposition to it caused US power
                      utility company PacifiCorp to back out of the
project in 1998 and the German
                      utilities Bayernwerk and VEW Energie to pull out
in April 1999.
                      In a statement, the IRN spokesman, Mr Patrick
McCully, said: “Electricity
                      generated by the dam will cost four to five times
more than other electricity
                      generated in Madhya Pradesh and will be
prohibitively expensive for local
                      consumers.”
                      The Madhya Pradesh Electricity Board (MPEB) has
guaranteed the project
                      developers a return on equity of 16 per cent for
the next 35 years, whether or not
                      the expected amount of power is produced.
                      As the MPEB is on the verge of bankruptcy and
cannot afford this annual
                      payment, it has proposed to cut subsidised
connections for the poor and
                      substantially increase tariffs, Mr McCully said.
                      In response to popular opposition, Madhya Pradesh
government formed a task
                      force in 1998 to review the dam project. At the
end of eight months of
                      deliberations, the task force submitted a report
which detailed cheaper and better
                      power alternatives to the Maheshwar project.
                      Ogden Energy, which signed the Maheshwar
agreement, is a wholly owned unit of
                      Ogden Corporation which has interests in airline
services, entertainment,
                      environmental and energy sectors.
                      “The company has no experience with large dam
projects. Its current portfolio
                      contains only six small hydroelectric dams (four
in the USA and two in Costa
                      Rica) with an average generating capacity of 20
megawatts each,” Mr McCully
                      said.
                      S Kumar’s, which is a textile firm, also has no
previous experience of
                      dam-building.
                      The IRN letter to the Ogden Corporation president
and CEO, Mr Scott Mackin,
                      urges the company “to withdraw from Maheshwar and
decline involvement in a
                      project which is based on the destruction of local
people’s livelihood.”
                      The letter said the environmental organisations
which signed it “are determined to
                      support and publicise the struggle of the
villagers in the Narmada Valley.
                      NGOs will not hesitate to inform the shareholders
and other stakeholders of
                      Ogden Corporation about the social, environmental,
legal and financial risks of the
                      Maheshwar project.”
                      When news of Ogden’s interest in the Maheshwar dam
was first reported in India
                      in late 1999, local people who faced displacement
wrote to the company insisting
                      that Ogden representatives should visit the
affected villages before deciding on
                      their investment. In February this year, nearly
300 elected representatives of the
                      affected area sent Ogden a resolution opposing the
project. “Ogden has failed to
                      reply to these demands. No Ogden official has yet
visited any of the affected
                      villages or spoken to their representatives,” Mr
McCully said.