Guarantee for Maheshwar

Published : Feb 27, 2004 00:00 IST

THE Maheshwar dam, one of the proposed big dams on the Narmada river, is India's first private hydroelectric project. Promoted by the S. Kumars group, the construction of the dam has been plagued by the lack of finance. A series of prospective financiers who examined the project chose not to invest in it. Issues such as rehabilitation of the affected people have also stood in the way of the project. But now the Bharatiya Janata Party government in Madhya Pradesh has decided to support the project with a Rs.400-crore guarantee.

This is no surprise in the decision, given that the BJP has always been an advocate of big dams on the Narmada. It is unclear whether the Madhya Pradesh government has delved into the history of the Maheshwar project before investing public money in it. It is common knowledge that the land at the dam site has been attached by the Madhya Pradesh State Industrial Corporation Limited as the company defaulted on loan repayment. Similarly, the Industrial Finance Corporation of India has stated that no further public money is to be lent to the company. The Narmada Bachao Andolan (NBA) has asked "the State government to immediately withdraw this guarantee and issue a white paper on Narmada Valley Projects", which it says will result in a potential loss amounting to more than Rs.15,000 crores of public money.

The Maheshwar dam was given to the S. Kumars group in 1992. The NBA is opposed to the project on two grounds - the issue of rehabilitation and resettlement (R&R) and the cost of power from the privatised project. According to the NBA, the dam is "slated to submerge homes and irrigated agricultural lands of over 50,000 farmers, fisher people and boat people in 61 villages in the fertile plains of the Narmada valley, scores of sand quarries, hundreds of acres of riverbed draw-down land and the richest fresh water fisheries in the Narmada valley. This project is also slated to produce extensive water logging". The Maheshwar project is likened to the Enron experience in Maharashtra, where neither the public nor the State Electricity Board could afford to purchase the power.

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