Arun III loan scrapped

A historic victory was achieved by
Nepal's environmentalists and citizens' groups, when the World Bank
announced on August 4 in
Washington DC, that the proposed
Bank loan to Nepars Arun IH dam project, which was cleared earlier, would
be scrapped. Gopal Siwakoti of the
Arun Concerned Group in Nepal said,
"it is...a crushing defeat for the World
Bank's management. We support
smaller, cheaper, less damaging, and
more efficient hydrodams."

Lori Udall of the International
Rivers Network says that the Bank's
decision "sends strong signals to
other aid donors that large dams are
risky, expensive and destructive
investments". The Arun III, which had
been opposed on socio-cuttural, environmental, economic and technical
grounds, was claimed by the critics as
having a higher cost per kilowatt-
hour than alternative smaller hydel projects.

Originally, the Bank would.have
had approved the project in August
1"3. but for pressure from Nepalese
and international activists who
charged that the Bank had failed to
comply with its policies regarding
environmental assessment involuntary resettlement and indigenous
peoples. The review panel of the
Bank had concluded on June 22 that
remedial measures appeared adequate enough to bring the loan into
compliance. However, Nepalese
activists' pessimist world view considered it highly unlikely that these
measures would have been successfully Implemented.