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Narmada Bachao Andolan
Jail Road, Mandleshwar
District Khargone, M.P., India
Telefax: 07283-33162

Press Release, 29.08.2000, Bhopal

Another Nail in the Coffin of the Maheshwar Project:


In an important victory for the struggling people of the Narmada valley, German multinational company Siemens has withdrawn its application for a Hermes export guarantee for the Maheshwar Project from the German government.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

Patrick McCully, California: Tel. +1 510 848 1155 (o) +1 510 528 2930 (h)
Shripad Dharmadhikary, Baroda:, Tel +91 265 382232
Jharana Jhaveri, Delhi: Tel. +91 11 2211851
Pervin Jehangir, Mumbai: Tel. +91 22 2184779 / 2185832
Alok Agarwal, Badwani, Madhya Pradesh:
Venu Madhav Govindu, New Jersey : +1 609 951 2823 (o)
Peter Bosshard, Switzerland: Tel. +49 1271 6425
Alex Wilks, England: Tel. +44 171 523 2170

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