A popular movement is gathering strength in Chhattisgarh against the privatisation of a stretch of the Sheonath river, which has deprived thousands of families of their livelihoods.
"ALL the water as far as the eye can see belongs to me," said Kailash Soni, chief executive officer, Radius Water Limited, perched atop the dam he built to harness water from the 23.6-kilometre stretch of the Sheonath river in Chhattisgarh's Durg district, which he now "owns". For him, every drop of water along this stretch translates into hard cash - Rs.600 crores, if the facility operates at its full capacity for the next 20 years, the remaining period of lease.
Sheonath river, entering Chhattisgarh in Durg district and flowing into the Mahanadi river at Shivrinarayan, has been a source of livelihood to farmers and fishermen for centuries. Not any longer. Small farmers can no longer cultivate along the 23.6-km stretch; they cannot install pumps or tubewells to draw water even a kilometre from the river, and people are not allowed to fish, bathe or wash clothes in the river. For the villagers, a lifeline has been cut, and they are unable to come to terms with it. "The river belongs to everybody, doesn't it?" asks a bewildered Bolanath. Generations of his family have survived because of the river.
A 1998 build-own-operate-transfer (BOOT) agreement signed by the undivided Madhya Pradesh government gave Kailash Soni ownership of the stretch of the Sheonath. Through the 22-year (renewable) "concession", Soni controls the stretch of the river that runs mostly through Mohlai village, and has monopoly on the supply of water in the Borai industrial area, near Durg town. The agreement covers groundwater as well. Metres have been installed on tubewells supplying water to the local industrial units, which have to pay Soni for the water used.
According to the initial lease agreement between Radius Water Limited and the Madhya Pradesh Industrial Development Board (MPIDB, before Chhattisgarh was split from Madhya Pradesh), the company would supply 40 million litres of water at Rs.10 a litre to the MPIDB, which would then supply the water to the industrial units. The MPIDB had to pay the company for the water used by the industries and in turn collect the money from the industries. But after the formation of Chhattisgarh, the company hiked the cost of water to Rs.15 a litre, which was brought down to Rs.12.60 after a prolonged agitation by activists and the local people.
The first river privatisation effort in India has had a chequered history. The Borai Industrial Growth Centre, on the banks of the Sheonath, was set up in 1989 and the water for it was to be drawn from the river. Since the Sheonath is not a perennial river, the government of undivided Madhya Pradesh had committed to the release of water to the industrial units from the Kharkhara reservoir on the Sheonath between September and July when the river is in flow. But to store water for further use, it was necessary to build a barrage at a cost of Rs.1.1 crores. Owing to the paucity of funds, the project was put off.
In 1992, pressure by the industrial units to revive the project forced the Madhya Pradesh government to set up the Madhya Pradesh Audyogik Kendra Vikas Nigam (now called the Chhattisgarh State Industrial Development Corporation Limited) as the nodal agency and to re-estimate the project. As the cost had escalated four times, to Rs.4.5 crores in the three years, the project was shelved once again.
Over this time, the water requirement of the industrial units - distilleries, a sponge iron plant and a thermal power plant - nearly doubled to 3.75 million litres. This demand included the requirement of 3.6 million litres of a single unit, which was promised the required water through an agreement it had entered into with the nodal agency.
In 1996, under mounting pressure from the industries that now included the water-intensive Bhilwara Synthetics, Khoday distilleries, and food park (Western Foods), the project was once again revived and the cost estimated. Now the cost had risen to Rs.7.5 crores. Unable to raise this money, the nodal agency asked the bulk consumers to contribute 50 per cent of the cost of the barrage. It promised to supply water to the units at a fixed rate for a long period and also adjust their share against the water bills. With the units not ready for this, the project was once again back on the shelves.
Finally, in 1998, succumbing to pressure from the bulk consumers, the government decided to involve the private sector. It thus signed a 22-year lease with Radius, giving it the right to 23.6 km of the Sheonath and supply the Borai Industrial Centre water from July till September through the nodal agency. Called the Rasmada scheme, the project was commissioned in April 2001. The company now supplies 40 million litres of water at Rs.12.60 a litre to industries, the railway station and a railway colony through the nodal agency, which would pay Radius irrespective of whether it collects the money from the industries using the water. The nodal agency has paid Rs.4.13 crores to the company between November 2002 and February 2003, but has recovered only Rs.1.29 crores from the industries. The largest consumer (HEG) has paid up less than half its water bill.
HAVING spent Rs.39 crores to construct an integrated water supply system by building a dam with pumping stations, distribution lines and effluent treatment plants, Kailash Soni is now looking for other sources of revenue from the river such as from fisheries. The 200-metre high dam has three-metre tall gates that operate automatically with a flood-regulating barrier system. The water spreads over 3 km, forming a reservoir. According to the local people, trees are planted around the reservoir by the company as an additional source of income from timber.
Kailash Soni claims that it is only for safety reasons that people are not allowed to use water from the reservoir. But thousands of local people, who had survived on the river for generations, now find themselves without a livelihood. People are unable to eat on all days of the week. They are agitating against the Chhattisgarh government seeking the termination of the contract with Radius Water Company. The people, supported by activists, social workers and Left parties, want their livelihood systems restored.
Activists from the National Alliance of People's Movements, the All India Youth Federation, the Nadi Ghati Sangharsha Samiti and the Chhattisgarh Mukti Morcha have been uniting people living along the river. People from several villages, including Mohlai, Kekro Koli, Bedwa Pathra, Vagrum Nala, Basik Hai and Chatarri, have joined the struggle.
With the protests intensifying, Chief Minister Ajit Jogi decided, in April, after a ministerial meeting, to cancel the contract. According to the State government, the agreement would be terminated "within the legal framework" and compensation paid to the company for the lease period after the Law Department and the Advocate-General give their opinion. Though the agreement was signed by the Madhya Pradesh government, the Supreme Court will allow (as per its directive in the Balco case) the Chhattisgarh government to review the agreements made by the Madhya Pradesh government. This, according to Ajit Jogi, is particularly so as the contract goes against the interest of the people. According to him, the government is ready to pay any price to end the contract, but will at no cost allow the privatisation of natural resources.
According to the State Legal Committee, to which the issue was referred, if the government ends the contract with Radius Water Company, it has to pay a compensation of Rs.400 crores. But the government now points out that as the company had not taken the State Water Utilisation Committee's approval, as mandated, it may not be eligible for compensation.
It is six months since the government decided to end the lease agreement, but nothing seems to have happened. Soni himself seems unperturbed. According to him, after all he is only "providing a service to the people".
On the outcome of the Sheonath project hangs the fate of 19 water privatisation projects that are in different stages of implementation in various parts of the country. The unofficial figure of such projects, in States as diverse as Tamil Nadu, Maharashtra, Karnataka, Kerala, Himachal Pradesh, Manipur, Rajasthan, West Bengal, Andhra Pradesh and Sikkim, is 40. The Indian water market is estimated to be worth over $2,000 million.
While R.C. Sinha, the CSIDC's Managing Director, says that the project is working well and that the contract is going by the book, he agreed that the government is looking at ways to end the contract. Kailash Soni, on his part, it is alleged, is garnering support from companies with similar projects in Andhra Pradesh. Together, they plan to file a public interest petition if the Chhattisgarh government cancels the contract. On the other hand, activists are gearing to start another round of agitations urging the government to cancel the contract.