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Monday, Mar 07, 2005

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NBA opposes Maheshwar project

By Our Staff Correspondent

BHOPAL, MARCH 6 . The Narmada Bachao Andolan (NBA) has described as illegal the Madhya Pradesh Government's move to restart work on the Maheshwar project since the project site had been attached by Madhya Pradesh State Industrial Development Corporation (MPSIDC) in 2002 because of "wilful default" by S.Kumars group (the project promoters) on an outstanding loan of Rs. 82 crores.

The NBA in a statement here today demanded that the State Government must take immediate steps to recover this public money and scrap the "high-cost and destructive Maheshwar project that threatens to be another Enron". It has also asked the Reserve Bank of India to investigate the entire financial practices of the group.

The Maheshwar project, to be built on the Narmada river, was privatised and given to the S.Kumars group in 1992.

The NBA has pointed out that the project, if completed, would submerge homes and irrigated agricultural lands of over 50,000 farmers, fishermen and boat people in 61 villages in the fertile plains of the Narmada valley; scores of sand quarries; hundreds of acres of riverbed draw-down land; and the richest fresh water fisheries in the Narmada valley.

The project is also slated to produce extensive water- logging. ]

The NBA has further stated that within a decade of privatization of the project, its the proposed outlay went up five-fold from Rs. 465 crores to Rs. 2233 crores. It is anticipated that the cost of the project would be around Rs. 5 to Rs. 6 per kWh. Hence neither the State Electricity Board nor the ordinary consumers would be able to buy such expensive power. Yet the Power Purchase Agreement for this Project states that the Government of Madhya Pradesh will have to pay the promoters around Rs. 500 crores annually for the next 35 years even if there are no buyers for power generated by this project.

It has cited the report of the Comptroller and Auditor General for the year ending March 2003, which severely indicted the Power Finance Corporation (PFC) for "irregular disbursement" of Rs. 100 crores as loans to the S.Kumars' promoted Shree Maheshwar Hydel Power Corporation Limited (SMHPCL), and for placing huge sums of public money in jeopardy. The CAG report for the year ending 2000 also pointed out that the MPSIDC had violated the maximum allowable lending limit of Rs. 3 crores and given a loan of Rs. 8.02 crores under irregular circumstances to the company firm, Induj Enertech. In September 2001, the MPSIDC had publicly declared the borrowing by Induj Enertech Limited as a "willful defaulter'' as S.Kumars refused to pay back this money despite their posting profits. The NBA has revealed that without paying back the first loan taken from the MPSIDC in 1999-2000, Induj Enertech obtained a second loan of Rs. 44.75 crores from MPSIDC for the financing of the Maheshwar Project.

When the Induj Enertech did not pay back even this loan, MPSIDC issued a Revenue Recovery Certificate in September 2001 and instructed the district administration of Khargone to recover the outstanding amount from the attachment and sale of the movable and immovable properties of the Maheshwar project.

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NBA opposes Maheshwar project