MUMBAI: Hundreds of villagers who will be affected by the 400 MW Maheshwar hydel power project in Madhya Pradesh are on a two-day protest at Azad Maidan to demand a stop to the use of public money to build the project. The Narmada Bachao Andolan (NBA), which is leading the protest, has pointed out several irregularities in the project and a delegation will meet the bankers and regulators in Mumbai to explain the situation to them.

The NBA said that the company building the project, Shree Maheshwar Hydel Power Corporation Limited (SMHPCL), had its movable and immovable properties attached from 2002 to 2005 because it defaulted on a loan. The properties were restored to the project promoters in 2005 on the basis of a settlement. However, NBA activist Chittaroopa Palit told a press conference on Thursday that despite this and in contravention of Securities and Exchange Board of India (SEBI) rules, the CARE rating agency gave a triple A rating, which indicates a most secure instrument, to the Maheshwar project. Three weeks ago, the NBA through its Supreme Court counsel Prashant Bhushan filed a complaint with SEBI to withdraw the rating because the chairperson of CARE was also the Chairperson of SMHPCL and such a rating was not permitted by SEBI. SEBI is having the matter examined.

Ms Palit and Alok Agarwal of the NBA said that the company wants to mobilise more public funds on the basis of this CARE rating. However, it had not returned the loans taken from other public institutions. In addition, they said IDBI was putting pressure on the Madhya Pradesh State Industrial Development Corporation (MPSIDC) to waive Rs 29 crores on loans taken for the Maheshwar project.

Mr. Agarwal said the Comptroller and Auditor General (CAG) of India has already indicted MPSIDC for sanctioning crores of rupees for the Maheshwar project. The Economic Offences Wing in Madhya Pradesh had filed a first information report (FIR) against the erstwhile promoters and directors of Induj Enertech Limited, the holding company of SMHPCL, for fraud, cheating and criminal conspiracy. The CAG has also indicted the Power Finance Corporation for irregularly giving Rs. 100 crores to the project.

About 61 villages will be affected by the project and as yet there is no rehabilitation plan, he said. The Ministry of Environment had pointed this out last June. While work on the project is continuing, the NBA says that the livelihoods of about one lakh people are at stake. It demands a forensic audit of certain funds that were transferred out from the project and is lobbying with public finance institutions not to finance this project.

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