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DAM-L LS: PR: Maheshwar Affected Capture HUDCO Office (fwd)



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-Dianne Muray
DRWG


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NARMADA BACHAO ANDOLAN
Jail Road, Mandleshwar,
District Khargone,Madhya Pradesh.
Tel: 07283-33162, 07290-22464,
E-mail:nobigdam@vsnl.com

Press note , Bhopal
4.10.2000

Hundreds of Maheshwar dam affected people capture HUDCO office at Bhopal
Officials agree to visit valley to appraise Maheshwar Project

Hundreds of people affected by the Maheshwar Hydroelectric Project 
captured the HUDCO (Housing and Urban Development Corporation) office 
in the Pariyavas Bhavan at Bhopal at 11.00 a.m. in the morning and 
held it till the officers disclosed the status of the loan 
application presented by the S.Kumars to HUDCO . The siege of the 
office continued till 5.00 p.m. in the evening when the HUDCO 
officers gave a written undertaking that no amount on the proposed 
loan had been disbursed till date nor had the proposal been cleared. 
They also gave a written consent to the demand of the NBA that a team 
of senior officials will visit the area from the 1st to 4th November, 
2000 and actually study the situation on the ground as part of their 
main appraisal process, before any further processing of the loan 
application.

Patlan mai, senior woman leader from Village Mardana said " Officials 
and investors will have to bow before the strength of the people and 
the truth of the issues. If the investment decisions are taken not on 
paper but by actually visiting the villages, the dam will never be 
built."

The offices in the complex were electrified as the protestors gave 
slogans and sang songs in the office complex all through the day. The 
HUDCO officials conceded that the Project promoters - the S.Kumars 
have not been able to give them even a list of those to be affected 
till date, nor have they responded to their various queries on the 
rehabilitation and environmental aspects of the Project. Later, the 
protestors went to the IFCI office in the same complex and questioned 
the General Manager Mr. Rajora about the issues. The General Manager 
promised to raise these issues at their Delhi office. The IFCI is the 
lead bank for the Maheshwar Project and has already appraised the 
Project without visiting the area.

The HUDCO is one of the public sector financial institutions that 
have been approached by the S.Kumars - the Project promoters of the 
controversial Maheshwar Hydroelectric Project being built on the 
river Narmada, to invest into the Project. According to the Chairman 
of the HUDCO, Mr. V. Suresh who was met by the activists of the 
Narmada Bachao Andolan last month, HUDCO has been approached to put 
in money for infrastructure construction for resettlement colonies.

The people of the Narmada valley expressed their complete outrage 
that in the light of the fact that this Project will produce 
prohibitively expensive electricity and that NO cultivable lands for 
the rehabilitation of the affected people exists, the HUDCO should 
even consider investing in the Project. The people made it clear that 
in the absence of any possibility of providing cultivable land and 
livelihoods, any infrastructure construction to support the creation 
of "colonies" of affected people rendered unemployed after 
submergence, is only a façade of rehabilitation and unacceptable to 
them.

The people affected by the Maheshwar Project and their supporters all 
over the country challenge the HUDCO, IFCI, IDBI, LIC, GIC, Punjab 
Bank, SBI, Dena Bank and all other financial institutions that are 
considering investment in the Project to establish that this Project 
is in public interest, financially viable and that the rehabilitation 
of the affected people and the land based restoration of the 
livelihoods of the affected people is possible. They challenge them 
to publicly disclose  the appraisal process and the conditionalities 
of the proposed investment. Failing this they intend to move charges 
against the decision making officers of squandering public investment 
and taking decisions on the basis of non transparent considerations 
that are not in public interest.

It may be noted that in the last two months delegations of affected 
people have met the highest officers of these institutions and 
briefed them about the realities on the ground and the discrepancies 
in what the S. Kumars and the state government have been saying. Now 
the people are resolved that if the institutions still go ahead with 
decisions to invest, they will institute a series of direct actions 
against these decisions as well as seek legal redressal and the 
fixing of personal responsibility on the officers taking these 
disastrous decisions . As the first of the contemplated direct 
actions, last fortnight, 400 farmers of the affected area who are 
also policy holders of the LIC submitted letters to the LIC 
threatening to withdraw their policies, totally amounting to Rs.1 
crore  if the LIC remained associated with this destructive Project. 
In the next month, the farmers plan to intensify this consumer's 
action on the LIC up to an amount of Rs. 30-40 crores.

It may be recalled that in the face of the determined struggle of the 
affected people in the last 4 years, several power utilities from the 
US and Germany, notably the Pac Gen, Bayernwerk and VEW Energie have 
withdrawn from this Project. Moreover last month, with the Siemens 
withdrawing its application for an export guarantee from the German 
government , a  Rs. 530 crore tied loan to the Maheshwar Project from 
the private German bank- the HypoVereinsbank fell through .The 
project promoters are now trying to raise the investment required for 
this Project by patchworking funds from several public sector 
financial and infrastructure institutions.

It is clear that the pressure of the state and Central governments on 
the FI's to pump money into this dying project is not sound economics 
or the protection of the interests of the investors of these 
financial institutions but represents the worst kind of subservience 
of public institutions and public money to political decisions. It is 
a betrayal of the confidence of the investors.

The Maheshwar project that will affect the lives, lands and 
livelihoods of more than 40,000 people of the area has been severely 
criticised in several international as well as Government reports. As 
recently as June, 2000, a report commissioned by the Development 
Ministry of the German government  sharply indicted the Project. The 
German government report notes the most flagrant and open violations 
of the Rehabilitation policy of the Madhya Pradesh government as well 
as the statutory clearances of the Central Ministry of Environment 
and Forests. It concludes that there is no cultivable land for the 
rehabilitation of the affected people available in sufficient 
quantity even by the admission of the Government of Madhya Pradesh 
itself, and that "if the R&R policy were executed as provided, the 
additional cost to the project would require an entirely new 
financing package several times larger than currently provided for 
R&R. " Thus if full and fair rehabilitation of the affected people is 
to be done, the Project becomes socially and financially unviable .

The German Development Ministry report of June, 2000 only confirms 
once again the 1999 report of the joint team of the  Central 
Environment Ministry, Ministry of Rural Development and Water 
resources as well as the 1998 report of the Task Force Committee 
constituted by the Madhya Pradesh state government ,that in the 
absence of cultivable land and other resources for rehabilitation, 
the Project cannot continue without serious legal and human rights 
violations on the rehabilitation front. The financial institutions 
will have to take cognizance of these governmental and international 
reports.

On the financial front, the CRISIL reports of June 1998 and October 
1999 have pointed out that a bankrupt MPEB - the monopoly buyer of 
power from this Project for the next 35 years is in no position to 
pay for the expensive power to be produced by this Project. In fact, 
the latest draft report of CRISIL of October 1999 has pointed out 
that the MPEB will not be in a position to service IPP payments 
unless it takes recourse to increase of tariff in the domestic and 
agricultural sectors and the closure of welfare schemes like single 
point connections to the poor.

The Maheshwar Project will produce electricity that will be 
prohibitively expensive. This expensive power will stop thousands of 
agricultural pumps and pauperise the peasantry in the state, bring 
darkness into the homes of thousands of common people who cannot 
afford this power, drive power loom workers to the brink of suicide 
and cause small industries to close down.

In these circumstances ,once again, the Narmada Bachao Andolan calls 
upon the financial institutions to either prove that the Project is 
financially viable and will help provide cheap and reliable power to 
the common people of this country and that the rehabilitation of the 
affected people according to the required norms is possible, or to 
withdraw from this Project.

Alok Agarwal	Kalabai Patidar	Mangat Verma


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