WASHINGTON: The Indian government recently canceled much of a $450 million World Bank loan for a vast irrigation and hydroelectric project, because it cannot meet the bank’s environmental and resettlements standards.
Bimal Jalan, India’s representative on the bank’s board told his colleagues that his country would not seek the remaining $170 million that had been authorized for the project, but not yet allocated, for the $3 billion project on the Narmada River, in the drought prone northwest part of the country.
The decision is a major victory for international environmental groups who have fought the huge irrigation and hydroelectric project and the bank’s involvement in it. For many environmentalists, the dam was aa symbol of misguided support of heavy-handed’ development projects that sometimes do more harm than good.
But Indian officials emphasize that they intend to complete the project on their own, adhering to the bank’s environmental and resettlement requirements. World Bank officials said privately that India preferred to complete the project without interference from multinational lending institutions. The Indian Government has viewed the criticism by environmentalists as an affront to its sovereignty, and an example of Westerners telling a developing nation how to. Run its affairs.
‘The enormous project includes the 535foothigh Sardar Sarovar dam and more than 3,000 others, 47,000 miles of canals and a plan to provide 1,450 megawatts of power enough energy to provide electricity to 1.4 million American homes for a year irrigation for 4.4 million acres of land and drinking Water to 40 million people. The project is sponsored by three Indian States: Gujarat. Maharashtra and Madhya Pradesh.
The World Bank chose to finance a portion of the Narmada River Valley project in 1985, without the benefit of a full environmental impact study, Concerns raised by environmental groups forced! The bank to undertake its first independent review of a bank financed development project.
The review, done in 1991 by Bradford Morse, an American who was the former head of the United Nations Development Program and Thomas Berger, a Canadian Supreme Court justice, cited a number of environmental and resettlement problems and called for the bank to “’step back from the project and consider it afresh.”
Despite the report, the bank board kept funding for the project alive in October, over the objections of American and Japanese representatives. At the same time, the board gave India until March 31 to meet a series of standards, called “benchmarks,” covering environmental concerns and how to resettle the more than 140,000 villagers who would be forced off their land by the rising waters.
Unable to meet the standards, the Indian Government decided to forgo World Bank funding rather than try to plead for more time to comply. “They knew as well as anyone else that getting an agreement for relief of the benchmarks would have been a very contentious and politically charged task,” a World Bank official said.
(Courtesy New York Times
Article extracted from this publication >> April 9, 1993
