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DAM-L NBA PR: No German Money For Maheshwar Project




Narmada Bachao Andolan
Jail Road, Mandleshwar
District Khargone, M.P., India
Telefax: 07283-33162
E-Mail: nobigdam@vsnl.com

Press Release, 29.08.2000, Bhopal

ANOTHER NAIL IN THE COFFIN OF THE  MAHESHWAR PROJECT:
NO GERMAN MONEY FOR THE MAHESHWAR PROJECT

SIEMENS WITHDRAWS APPLICATION FOR HERMES EXPORT GUARANTEE,
HYPOVEREINSBANK BACKS OUT OF RS.530 CRORE LOAN COMMITMENT

In an important victory for the struggling people of the Narmada 
valley, German multinational company Siemens has withdrawn its 
application for a Hermes export guarantee for the Maheshwar Project 
from the German government. Simultaneously, the private 
HypoVereinsbank of Germany has stated that it will now no longer be 
in a position to honor its commitment to give a Rs.530 crore  loan to 
the Maheshwar Project. This decision has been greeted by jubilation 
all through the valley. The decisions by the Siemens and the 
HypoVereinsbank will mean that now there will be no German money for 
the Maheshwar Project. It is clear that the decision Siemens was 
compelled to take is a direct consequence of the mass struggle in the 
valley in the last 4 years by the affected farmers, workers, 
boatspeople and fisherpeople, as well as the international solidarity 
and understanding that has supported it. Without doubt the withdrawal 
of the Hermes guarantee is yet another nail in the coffin of the 
Maheshwar Project.

The Maheshwar Hydroelectric Project will submerge the lands, homes 
and livelihoods of over 40,000 people in 61 villages and inundate 
thousands of acres of rich deep black cotton soils, scores of 
extremely profitable sand quarries that support thousands of landless 
people and a rich composite culture. The people of this area have 
been struggling against this destruction and displacement as well as 
raising the issue of the prohibitively expensive power to be produced 
by this Project that will bring darkness rather than light to the 
people of Madhya Pradesh.

It was on the 23rd of January,1997, that Siemens had applied to the 
German government for a Hermes guarantee for a tied loan to be given 
by the HypoVereinsbank to the Maheshwar Project for the purchase of 
generating equipment from Siemens. In response to the mass struggle 
in the valley and in order to take a well-considered decision, in May 
2000 the Development Ministry of the German government commissioned a 
team of international experts to investigate the status of 
rehabilitation and resettlement in the Project.

Soon after the team gave its report on the 15th of June this year 
sharply indicting the Project, Siemens told the German government 
that it would submit a report that would present substantially 
different findings about the status of rehabilitation in the valley. 
The fact that it then chose to withdraw the application itself 
instead of substantiating its differences demonstrates that Siemens 
has no answer to the basic finding of the report: that the 
rehabilitation of the affected communities is impossible.

The Siemens decision is a vindication of the issues that the affected 
people have been raising over the last four years vis-a-vis 
displacement: essentially that the impacts on people and the rich 
natural resources of the area will be much larger than anticipated, 
and that compensation of these losses and rehabilitation of the 
affected people is impossible. It is clear to all that if this 
project is built, enormous human rights repression and large scale 
destruction of rich natural resources and communities is inevitable. 
Since this cannot be acceptable, the project has to be stalled.

The Siemens decision to withdraw the application for the Hermes 
guarantee is a major victory not only for the people of the Narmada 
valley who have fought against this Project tooth and nail for the 
last four years, facing repeated arrests, beatings and indignities in 
the process, but also for all struggling people of the world who are 
facing the onslaught of a process of globalisation that bears no 
accountability to peoples and environments, and which puts the search 
for super profits over livelihoods .

We understand the "alternative financing" that Siemens now hopes to 
find is at best an attempt to save their own face as well as those of 
their partners, and at worst, an attempt to continue to  participate 
in this project through other means fully knowing its destructive 
consequences, establishing thereby that markets matter more to it 
than people and that its behaviour as a corporation will not be 
guided by the minimum norms of human rights acceptable in a civilised 
society.

The Narmada Bachao Andolan and the people of the Narmada valley are 
confident that they will successfully halt this Project in the next 
few months. Even at present the project is in a situation of complete 
paralysis. The American power utility PacGen withdrew from the 
Project in 1998 and two German power utilities, Bayernwerk and VEW 
Energie, were compelled to withdraw in 1999 because of the strong 
opposition to the project in the Narmada valley. The situation on the 
ground is that the project has not been able to achieve even 
financial closure in the last few years, let alone go ahead with any 
substantial construction.

The Central Power Ministry had announced that it would complete 
financial closure of this Project within 100  days after coming to 
power in October 1999. However because of the perseverance and 
struggle of the affected people the closure could not be effected. It 
is also a fact that all construction on this project has been stopped 
for the last few months because of the financially jeopardised 
situation of the project promoters, including the failure of their 
other projects. Therefore it is only a matter of time that the 
Project promoters - S.Kumars themselves - will withdraw from this 
project and the project will be discarded forever.

The affected people of the Narmada valley are resolved to continue 
and intensify their struggle until this destructive Project is 
completely stopped and the cheaper, better, and less socially and 
environmentally destructive energy and water alternatives are put in 
its place.

Chittaroopa Palit
Mangat Verma, Village Lepa, District Khargone
Sanjay Nigam, Village Mardana, District Khargone
Alok Agarwal


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