[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]
DAM-L LS: FIs must stop funding Maheshwar Project (fwd)
----- Forwarded message from owner-irn-narmada@netvista.net -----
Return-path: <owner-irn-narmada@netvista.net>
Received: from DaVinci.NetVista.net (mjdomo@mail.netvista.net [206.170.46.10])
by lox.sandelman.ottawa.on.ca (8.8.7/8.8.8) with ESMTP id RAA19381
for <dianne@sandelman.ottawa.on.ca>; Fri, 1 Jun 2001 17:33:27 -0400 (EDT)
From: owner-irn-narmada@netvista.net
Received: [(from mjdomo@localhost)
by DaVinci.NetVista.net (8.10.0/8.8.8) id f51LCH708702
for irn-narmada-list; Fri, 1 Jun 2001 14:12:17 -0700 (PDT)
(envelope-from owner-irn-narmada@netvista.net)]
Date: Fri, 1 Jun 2001 14:12:17 -0700 (PDT)
Message-ID: <200106012112.f51LCH708702@DaVinci.NetVista.net>
Subject: LS: FIs must stop funding Maheshwar Project
Sender: owner-irn-narmada@netvista.net
Precedence: bulk
Narmada Bachao Andolan
Jail Road, Mandleshwar,
District Khargone., M.P.
Telefax: 07283-33162
E-mail :nobigdam@vsnl.com
Press note, 31.05.2001
Financial Institutions must stop funding Maheshwar Hydro-Electric Project
Lesson from Dabhol: Moratorium on all further FI lending to Independent
Power Projects
Over two hundred people affected by the Maheshwar Hydro-Electric Project –
peasants, workers and fisherpeople demonstrated at the IDBI, UTI and Dena
Bank offices at the World Trade Centre premises at Cuffe Parade in Mumbai.
Simultaneously, smaller groups of affected people demonstrated at the SBI,
bank of India, LIC, GIC and the IFCI. Waving banners like “ Do not fund the
Maheshwar Project – the Enron of Madhya Pradesh “ and “FI’s hosh me
ao,public ka paisa mat dubao”, the affected people called on the FI’s to
desist from funding the economically non-viable, financially disastrous and
socially destructive Maheshwar project. They expressed deep surprise that
at a time when the nation was calling for a judicial investigation of the
Enron agreements the FI’s should seek to fund yet another such project in
Madhya Pradesh. They urged the FIs to declare a moratorium on all further
lending by the Indian Public Financial institutions to the independent power
projects pending a case-by-case re-examination.
This demonstration was joined by many groups in Mumbai. These include the
Forum Against Oppression of Women, India Centre for Human Rights and Law,
Footpath Vasi Nagrik Sanghatana, YUVA, Samajwadi Jan Parishad, National
Fishworkers’ Forum, Sachetna, Bombay Sarvodaya Mandal ,Jhopadpatti Bachao
Parishad, Sanctuary and the Narmada Bachao Support Group.
At the Bank of India today, the police roughed up the activists of the NBA.
Instead of taking heed of the voice of the people whose lives and
livelihoods are severely threatened by the Maheshwar project and had braved
a long journey from their villages to Mumbai, the police brushed them aside
and refused to listen to them. At the IFCI, the strength of the people of
Maheshwar persuaded the General Manager to invite the people for an
hour-long discussion where he admitted that even they had not received the
Lender’s report as yet! As a result they were unable to take a decisive and
informed step in this context. At the LIC, officials were forced to go down
to meet the affected people and accept the memorandum prepared by the
people.
At the State Bank of India the people met the Secretary to the Chairman who
tried to evade the issue of FI accountability and told the people that they
have not as yet invested any money in the project. However, they assured
the delegation that they would consult with the affected people before
taking any step in this direction. They also promised to call the people in
a month’s time for further discussions. At GIC they had an hour-long meeting
with the Chairperson who expressed interest in looking at the various
dimensions of the project. He has asked the people for more information and
has promised the people of Maheshwar that he would call them for more
discussions.
At IDBI at the World Trade Centre where the demonstration lasted four hours
senior officials invited a 12 member delegation to meet them. NBA stressed
that they firmly believe that the Maheshwar project is like Enron which is
under a big cloud today primarily because of shortsighted policies. The NBA
urged the IDBI to desist from spending public money on such fundamentally
flawed projects and to learn from the Enron experience. The NBA and the
IDBI officials engaged in a wide ranging discussion that touched on issues
like the prohibitively expensive cost of electricity to be generated by the
project, the people’s inalienable right to information to relevant reports
pertaining to the project. The NBA strongly emphasized that all reports
should be made public and the affected people in particular should have
ready and immediate access to all reports. Legal obstructions to such
access were mere excuses and could not be tolerated. The NBA further
stressed that the IDBI was a public finance institution and could not
sidestep the issue of accountability and particularly so when there was a
struggle going on against the destructive project.
It may be noted that the project promoters of the privatized Maheshwar Hydro
Electric projects—the S.Kumars is seeking project financing from a
consortium of Indian public financial institutions comprising of IDBI, IFCI,
UTI, SBI, LIC, and GIC, lending from the other commercial banks and
financial institutions as well as a proposal for non—convertible debentures
from the UTI. The project promoters have approached the public financial
institutions to bridge the large gaps in equity and credit after two US and
two German power utilities withdrew from the project and a Rs.900 crores
private German bank loan promised to the project fell through after the
refusal of the German and Portuguese governments to give guarantees to the
Maheshwar Project.
The decision and consideration of the financial institutions to invest in
the Maheshwar hydro-electric project is inexplicable for several reasons.
These include: the high cost of power to be produced by the Maheshwar
project, the financial bankruptcy of the Madhya Pradesh government and the
Madhya Pradesh Electricity Board and its inability to honour any repayments,
the lack of techno-economic and environmental clearance at the proposed
level of investment and the huge social and human costs of the proposed
submergence of several thousand acres of fertile and irrigated lands and
livelihoods of over 50,000 affected people in the area.
At the proposed level of Rs.2254 crores outlay for the Maheshwar Project the
cost of power will be Rs.6.52 per kWh as levelised tariff for the next 35
years and Rs.9.65 per kWh as the cost of peaking power. It may be noted
that around 76% of the total outlay is dollar denominated and the power
purchase agreement executed for the project promises to make large and more
compulsory payments of nearly Rs.600 crores per annum whether power is
produced or not and can be sold or not. The power purchase agreement also
provides for 16% to 30% guaranteed rates of return on equity.
The current cost of MPEB produced power is Rs.1.25 per unit and the central
undertaking NTPC is Rs.1.67 per unit. Obviously the cost of the Maheshwar
power at Rs.7 to Rs.10 per unit will be prohibitively expensive and cannot
be bought by any consumer—agricultural, industrial, domestic or commercial.
Moreover, successive financial investigations by the CRISIL in June 1998 and
Oct 1999, as well as the very recent Shivraman Committee report confirm that
Madhya Pradesh has no escrowable capacity at all, that it is in default on
other bonds and leases and that it is now in fact bankrupt and hence cannot
pay for this power even for a year, let alone the next 35 years.
Successive investigations into the displacement and rehabilitation of the
affected people by the Task Force Committee set up by the Madhya Pradesh
government in 1998, the investigation team of the Central Ministry of
Environment in 1999 and the team of independent experts commissioned by the
Development Ministry of the German government in 2000 have all indicted the
project for the complete lack of agricultural land to be provided to the
oustees and any possibility for the restoration of livelihoods.
The people of the Valley and the Narmada Bachao Andolan have brought these
facts to the notice of the financial institutions repeatedly in the last one
year. The Andolan has also served legal notices to the financial
institutions mentioned above three weeks ago. Regrettably there has been no
response or demonstration of any sort of accountability by the financial
institutions. The Narmada Bachao Andolan notes the role of the financial
institutions in backing the disastrous Enron project, destroying the energy
and production economy of the state of Maharashtra and jeopardizing nearly
Rs.6000 crores of public money in the Enron project. The Andolan decries
the complicity and collusion displayed by the financial institutions in
backing “Greenfield” projects promoted by private promoters and the failure
of the appraisal and audit processes.
The Andolan warns the financial institutions and their managements that the
Indian public will not tolerate the loot of their money in this manner and
that if they continue to act against public interest they will individually
be held accountable for all such scurrilous decisions. It urges the
financial institutions to learn from the Dabhol experience and take a step
back, declare a moratorium on all further lending to the independent power
projects and to withdraw decisively from the high cost and destructive
Maheshwar project.
Chittaroopa Palit Alok Agarwal Urmila Patidar
Mangat Verma
-------------------------------------------------------------------------------------
To unsubscribe from this list, send a message to majordomo@netvista.net
with no subject and the following text in the body of the message
"unsubscribe irn-narmada".
----- End of forwarded message from owner-irn-narmada@netvista.net -----