Odisha's gift to Vedanta: penalty waiver for using scarce water

Company's Jharsuguda refinery has using water for free because it has no agreement with the state government on water

By Anupam Chakravartty
Published: Wednesday 21 December 2011

For over three years, Vedanta Aluminium Limited (VAL) has not paid a single rupee for the groundwater used at its refinery in Jharsuguda district in Odisha. The revelation comes close on the heels of the state government declaring Jharsuguda and 17 other districts in the state as drought-hit on December 15. Documents relating to the state government's waiver on the water penalty imposed on the company were produced in the state Legislative Assembly by opposition leader Bhupinder Singh during the current session. A letter from the water resources department shows that the refinery drew 6.7 million litres of water from borewells without any agreement from August 2008 onwards. 


The letter states that six times the penalty has been imposed on the company for operating borewells inside the company’s premises. VAL's Jharsuguda unit owes over Rs 10.43 crore since September 1, 2007 till August this year. As on August 2011, Vedanta is supposed to pay Rs 92.85 lakh to the water resources department.

The documents show the department of water resources waived off penalties against VAL for drawing groundwater as well as using reservoir water from the Hirakud dam because there is no agreement between the company and the state government on water.

“A telephonic instruction was received from the additional secretary to department of water resources that industries having government allocation should not be charged penal rate merely due to non execution of the agreement. Accordingly all such industries like Vedanta Aluminium Limited are charged the normal rates from August 2009 onwards,” stated a letter by the executive engineer of the main Hirakud dam division on November 18, 2011. VAL was allocated with 1.55 cubic metre per second (Cumecs) water from the Hirakud dam reservoir. The same letter states that during July 2009, due to non execution of the agreement with state government for drawing water, the company was charged penal rate.

Farmers' complaints ignored

Ranjan Panda of non-profit Water Initiatives in Odisha, who has been highlighting problems faced by farmers in drought-prone areas, says numerous complaints have been made to the authorities since 2007 regarding groundwater depletion caused by the alumina refinery. “The water bodies around the plant which the farmers were using have dried up, while the water table has dipped below normal. A Legislative Assembly committee has already visited the area. Now, the government’s own department has revealed that groundwater was lifted without any agreement confirms this,” says Panda. 

On December 15, the revenue and disaster management minister, S N Patro declared 12,046 villages under 113 blocks, 100 wards under 25 urban municipalities spread over 17 districts, including  Jharsuguda, as drought-affected. The minister while, declaring the drought in the Assembly floor said the government has received reports of crop losses of more than 50 per cent from these districts.

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