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Arunachal Pradesh is awarding hydroelectric projects to private companies at the breakneck speed of one every nine days without proper scrutiny. The government says hydroelectricity is the key to the state's development. But arnab pratim dutta finds out that the people exposed to risks will not gain much from the projects
Once you reach Lower Dibang Valley in Arunachal Pradesh, you know you have stepped into the shadowy side of "shining" India--the cell phone stops catching signals, the roads are worn out and the electricity supply, erratic. If you drive 40 km out of its district headquarters Roing to Nizam Ghat and then trek for three hours in Mishmi hills, you will reach Pather Camp, a nowhere destination in absolute wilderness. A helipad is the last thing you will expect here. Yet there it stands, a testimony to the importance of this place. Pather Camp is where India's biggest dam, the Dibang Multipurpose Project (dmp), is proposed to come up.
Dams are a big idea in Arunachal Pradesh,touted as the open sesame to the state's financial prosperity. They have the resonance of both promise and apprehension.
Promise because they can be the harbinger of development--one paisa per unit of power the 3,000-mw dmp will generate is promised to be spent on local development. And apprehension because the people fear that dams will pave the way for the government to take over the control of natural resources or worse, ruin them--they opposed dmp at a public hearing in January, and stalled the next hearing in March.
Hydroelectric projects are also a big booming business in the state. In just 11 months from April 2007 to February 2008, the Arunachal Pradesh government signed agreements for 38 projects with private companies. That is three-and-a-half projects a month or a project every nine days. Many of these companies have no expertise in building dams.
Where will it stop? The government plans to erect 104 hydroelectric projects in the state, with a cumulative generation capacity of about 56,000 mw -- one-third of India's hydropower potential. It has smelt a cash cow in these projects. "If the available potential (hydropower) can be harnessed, the state will be floating 'Hydro Dollars'" like petro dollars in Arab countries, says the state hydropower policy. The Arunachal Pradesh government estimates that mega hydropower projects planned in the state can augment its annual income by up to Rs 8,000 crore through the sale of its share of electricity--the 2008 state budget was Rs 2,065 crore.
A senior official of the Arunachal Pradesh government, who prefers to remain anonymous, says the government wants to generate most of this power in the next 12-14 years and, therefore, it is in a hurry to allot projects to private developers.
According to the official, private players entered the hydroelectric sector in 2005. In April that year, the prime minister announced the North-East Water Resource Authority on the lines of the us Tennessee Valley Authority as an independent corporation. This authority had the World Bank's support. While all the six other states of the Northeast accepted the draft proposal for setting up the authority, Arunachal Pradesh opposed it. Recognizing the authority would have meant placing the rights to river systems under its control. The then Arunachal Pradesh chief minister, Gegong Apang, instead came up with the state's Hydro Power Policy in November 2005.
With the hydropower policy in place, Apang initiated private developers in the sector. Public sector units like the National Hydro Power Corporation (nhpc) began to lose projects allotted to them by the central government. In 2005-06, five mega projects, for which the detailed project reports had been prepared or were being prepared, were given to private firms.Siyom (1,000 mw) and Tato-II (700 mw) went to Reliance Energy; Hirong (500 mw) and Lower Siang (1,600 mw) to Jaypee Associates; and 1,000 mw Naying to DS Constructions, a real-estate developer and hydropower contractor.
The next year nine agreements for projects with the total generation capacity of 4,425 mw were signed with Bhilwara Energy, little-known Mountain Fall, KSK Electricity Financing and GMR Energy. By then a political turmoil was brewing. In April 2007, Apang had to step down as chief minister and power minister Dorjee Khandu took over. According to informed sources, Apang had to quit, not because of any discord with his mlas, but for not obeying the centre and opposing large storage dams (see box Big trouble).
Since the power shift the trickle of mous has turned into a flood. Thirty-eight more agreements were signed by February 2008, bringing the total mous with private developers to 52 (see table Taming rivers). The combined installed capacity of these projects is 14,289.5 mw. Besides, seven projects have been awarded to public sector units, nhpc, National Thermal Power Corporation (ntpc) and the North Eastern Electric Power Corporation (neepco).
What were the criteria and methodology for selecting power developers? There is no transparency. A glance at a notice inviting bids for three hydroelectric projects by the state government on September 25, 2007, reveals that companies wishing to invest in hydropower in the state need not have any experience in building such projects. The only techno-economic requirement the government sought for constructing the mega Hatung II, Kalai I and Bharali II projects was that the "bidders should have a strong financial and technical base and adequate free reserves and surpluses and requisite technical capability". There were no specific guidelines for determining the bidder's technical strength or experience in building dams.
The three projects were allocated to Mountain Fall India, a company unheard of in the power and infrastructure sector. KSK Electricity Financing, Indiabull Real Estate, Raajratna Metal Industries and Energy Development Company are other companies which have no experience in building dams but have been allotted projects. What's more, the mous completely overlook safety concerns. There is no clause in the agreement fixing responsibility for the damage caused by dam break in case of earthquake or landslide, although Arunachal Pradesh falls in high seismic zone and is landslide prone.
A senior official in the state power department admitted that most bids by private proponents do not go through any scrutiny and the projects are awarded on the basis of the upfront payment and the free electricity they promise to the state. Reliance Energy, DS Constructions and Jaypee associates, for example, promise 12 per cent free electricity for 10 years and 15 per cent thereafter, much more than public enterprises.
Says Bamang Anthony of the Arunachal Citizens Rights "Any company willing to pay an upfront payment can set shop in Arunachal Pradesh." A private company has to pay a non-refundable processing fee of Rs 10,000 per mw of the project's installed capacity and a lump sum amount of Rs 21,000 per mw. For the 1,000 mw Siyom project, Reliance Energy paid a processing fee of Rs 1 crore and an upfront Rs 2.1 crore. The government is said to have hiked the upfront payment recently.
"In other words," says Anthony, "the government has committed to these projects before any assessment or clearance." Despite repeated queries, the state power secretary did not comment. Until December 19, 2007, the state had collected an upfront payment of Rs 158.64 crore for 35 projects. nhpc has given a soft loan of Rs 225 crore for dmp. This money is being used to bail out scam-hit Arunachal Pradesh State Apex Bank.
The government, however, does not tire of saying that it needs the money from hydroelectric projects for building physical and social infrastructure in the state. The chief minister, in his presentation at the National Development Council meeting on December 19, 2007, said the state generated little revenue on its own. Arunachal Pradesh's annual per capita income is Rs 19,566 (2003-04), which is less than the national average. Half of the villages in the state do not have electricity. The road density is 21.8 km per 100 sq km, against the national average of 76.8. The coverage of national highway is even more dismal at 0.5 km per 100 sq km, one-tenth the national average.
Under such circumstances, the government says, a project like dmp can provide the state exchequer Rs 300 crore annually or 15 per cent of the state's annual revenue. In January this year, the prime minister also said that with some of the mega hydroelectric projects in place, Arunachal Pradesh could generate between Rs 3,000 crore and Rs 4,000 crore annually. The state's hydropower policy, however, does not promise that this money will be used for the benefit of the affected people.
Politicians claim that the projects will also benefit the people directly. "dmp is integrally linked with the development of the valley," says Lata Umbrey, mla, Lower Dibang Valley. All grade III and IV jobs and 25 per cent executive posts in the project are reserved for the residents of the valley, he says.
With the potential are associated possible threats. Arunachal Pradesh is in a high seismic zone and the silt load in its rivers is also high. "The lower Himalayas are young and geotectonic activity is still very strong in the region. They are also prone to landslides and geological upheavals, hence any development activity warrants careful and studied interventions," says Dulal Goswami, former head, Department of Environment Sciences, Gauhati University, Assam. There has been no basin-wise study to gauge either the ecological, social and technical difficulties, or rivers' carrying capacity, says Neeraj Vagholikar of ngo Kalpavriksh. In January and February, the Expert Appraisal Committee on River Valley and Hydroelectric Projects of the environment ministry ordered basin studies on the Kameng and Lohit rivers. "But there is a clause in the order that individual project clearances will not be subject to these basin-level studies," says Vagholikar.
dmp developer nhpc has refused any compensation in case of a dam break to people. Asked if the government had done any study to assess the overall impact of all the dams in the state, R Kemp, conservator of forest, said "No."
"When dmp's environment impact assessment (eia) report itself says that due to high seismicity in the region the reservoir should not be filled to its capacity for the first few years, then how will they generate the peak power?" asks Mitai Lingi, president, Idu Cultural Literary and Society, Roing. He has reasons to doubt. The only operating project in the state, Ranganadi Hydro Electric project (rhep) stage I, in Lower Subansiri district is generating much less than its installed capacity (see Project disaster). Nor have these project developers taken into consideration the impact of melting of glaciers and silting of reservoirs. High discharge of silt could affect the power production of some dams, says Arup Saikia, geologist with Rural Volunteer Centre, an ngo involved in flood control in Assam.
The dmp reservoir will also submerge over 5,000 hectares (ha) of forest, and nhpc will have to acquire community forest land for compensatory afforestation, which means more displacement and resource alienation (see 'Truth is more slippery', Down To Earth, April 15, 1999). With 17 projects planned on the Dibang, communities in the region could end up losing most of their land.
Then there is the threat of migrant labourers disturbing demography. A 2,000 mw project, Subansiri (Lower) is using about 12,000 labourers. Bigger projects like dmp may hire more labourers, although its eia talks of only 5,000. Seventeen projects planned on the Dibang mean over a lakh labourers visiting the area, while the local population, comprising Idu Mishmis, is only 12,000. The Arunachal Pradesh government has not done any study to look into possible social conflicts.
River management is another concern. Diversion of water from the Ranganadi to the Dikrong for rhep is not only affecting the people downstream of the dam but also changing the nature of the rivers. "A thousand are affected by unsystematic management of the river. Nearly 20 ha of land has become uncultivable due to lack of water," says Takio Taram, a resident of Kimin, a settlement 30 km downstream of the dam.
Further downstream, Assam too is feeling uneasy. There has been no formal study on the impacts of the dams on the lower riparian state. In December 2006, after the All Assam Students Union (aasu) agitated against Subansiri (Lower), the Assam government directed nhpc to conduct a study on the project's downstream impacts but nothing happened. After several ultimatums by aasu, the Assam government, nhpc and the students' union set up a committee of experts from iit Guwahati, Gauhati University and Dibrugarh University in September 2007 to look into the project's impacts. nhpc was to finance the study. Jatin Kalita, professor of zoology at the Gauhati University, who is the coordinator of the committee, says nhpc has not yet sanctioned the study budget, hence the delay. According to Assam power and industries minister Pradyut Bordoloi, the government is ensuring the state at least gets some benefits. "We've negotiated with nhpc to provide us 6 per cent free power from Subansiri (Lower)," he says. The governments seem too distracted by the jingle of coins to address the concerns.