Fighting drought with wishful economics
With indictments coming from virtually every side, India Together reviews the latest
financing situation of the Sardar Sarovar dam project in Gujarat.
Yet another indictment of the Sardar Sarovar dam on the Narmada river came in 2001 from the
Gujarat Ecology Commission (GEC), a state government commission. In its report of March last year,
the GEC says,
The commission went on to observe that the problem of fast declining quantity and quality of the
ground water in the state, as well those of water logging and salinity in the command areas of
the irrigation projects would become severe with time." This is probably the most stinging
criticism leveled at the Gujarat Government from a state government authority, considering
the level of public opinion polarization that the Narmada projects and Andolan confront in
Okay, so an ecological commission could not see the grand economics of the project. But no greater
mercy was shown by the Comptroller and Auditor General's report for the year ended on March 31,
2001. The report stated that state's fiscal position is deteriorating and indicted the GoG
owned Sardar Sarovar Narmada Nigam Ltd (SSNNL) for spending a whopping 22 percentage of
total expenditure incurred over the project towards interest charges and servicing debt liabilities.
The credit rating agency CRISIL recently downgraded SSNNL bonds on account of the suspected
inability of the corporation to generate sufficient revenue to meet its short-term and mid-term debt servicing obligations.
To all of that, add these. The Cost of dam has risen from Rs. 6406 crore (1988) to over
Rs.25,000 crore (2000), in government estimates. Many base costs are not included in such
estimates. If all costs are computed, the cost of the dam will not be less than Rs. 50,000 crore.
It's little wonder that around 85 to 90% of the total irrigation budget of Gujarat state plan is
given to one single dam - Sardar Sarovar. This has resulted in the serious neglect of other less
costly, time-saving and efficient options. Furthermore, the Gujarat government's attempts to
raise money in the bond market, is in trouble due to the downgraded of SSNNL's bonds. In the
meantime, the government has persuaded the state cooperative banks to invest in SSNNL to
the tune of Rs 300 crores.
At the grassroots, many of the touted beneficiaries have decided to buy their own
insurance. Local governance. One of the objectives of the dam is to address water-scarcity
of the drought prone areas, particularly Kutch, Saurashtra and North Gujarat. During the
drought in 2000 and 2001, the villages like Rajsamandhiala (Rajkot) had ample water in
the lakes and wells. This was possible due to sustained water-harvesting efforts for over
4 years and scientific water management plan.
From 1996 onwards, there has been a Saurashtra level campaign for well-recharging, by which
several hundred thousand wells have been recharged. Saurashtra has around 7,00,000 wells.
Even if one-third of them are recharged for about five years, the water table of entire
Saurashtra will rise. As the state government expends crores of rupees on the unviable and
mammoth Sardar Sarovar dam, villagers and town based groups are rejuvenating old tanks and
undertaking watershed development.
- "…A glance at the map of the command area of the (Narmada) project clearly indicates that, large areas of water deficit regions would not get any water from the Narmada Project. As many as 35 out of 53 talukas having dark or over exploited status of ground water development, are outside the command of the Narmada Project. As a matter of fact, Narmada waters will serve only 22% of the cultivable land in the 53 talukas where ground water is over exploited".
Material from a recent booklet authored by Sanjay Sangvai on the Narmada
Valley development project was used for this report