Financing Dams in India: Risks and Challenges

Tuesday, February 1, 2005

Financing Dams in India
Financing Dams in India
In 2003, the Government of India proposed to double the current electricity generation in the country, proposing 162 new Hydroelectric Projects. The government endowed India’s National Hydroelectric Power Corporation (NHPC) with the largest number of projects. This briefing paper informs about the risks of doing business with NHPC. NHPC has repeatedly violated national and international standards and regulations for dam building. This has resulted in cost and time overruns, social and environmental negligence, security concerns, widespread public opposition, human rights violations, court cases and the suspension of projects in the pipeline or even during construction.

From the briefing paper...

NHPC in Action: The Indira Sagar Project

"We were evicted at gun point. With the use of bulldozers. When we begged the officer ‘Saab, please do not bulldoze our houses, let us remove our belongings’, he ordered the bulldozers to work even faster." Women from Baldi village of the Indira Sagar submergence area report.

The Indira Sagar Project in the State of Madhya Pradesh exemplifies NHPC’s mode of operating. This 92 meter high dam will displace over 200,000 farmers, tribals and fisherpeople and will impound more land than any other hydro project in India. Instead of fulfilling its contractual obligations to provide land–based resettlement, NHPC quickly became notorious for its use of intimidation, threats and Special Armed Forces against people in the project area. Villagers were forced to accept small amounts of cash instead of the land–based compensation they are legally entitled to. Those who tried to complain were told that this would result in a loss of their right to any compensation.

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