Wednesday, February 16, 2011

How Rivers Are Sold to Private Corporations in India

The Water Wars
From Tehelka Magazine, Vol 8, Issue 4, Dated January 29, 2011

You can lease a river in Chhattisgarh for 22 years. At just Rs. 1 per
annum. While thousands go thirsty

Rivers belong to nations. But, in Chhattisgarh they belong to
corporations. BABA UMAR tracks the sale of six rivers in the state.

IN MAHMARA village of Durg district in Chhattisgarh, Ramoram Thakur, 70,
recalls how as a boy he would sing and hear folklore about water,
fishermen and farmers of his village, tucked into the western edge of
Sheonath river. However, such legends have a tragic ending nowadays.

Seated near a babul tree in the community choupal, the old man shares
stories with children about how the river passed onto the hands of a
private company, which denied villagers water for drinking, washing and
irrigation, stopped fishermen from casting their nets and prevented
locals from taking sand from the riverbed.

"Their barrage drowned a cremation ground on the banks. Dozens of
village located downstream were left with little water. What belonged to
us for centuries is no longer available for our use," he laments.

Thakur is talking about the Sheonath, the first river to be handed over
to a private group, Radius Water Limited (RWL), in 1998 by the
government of undivided Madhya Pradesh through its undertaking, MP
Aydhyogik Kendra Vikas Nigam Ltd (MPAKVN), now Chhattisgarh State
Industrial Development Corporation (CSIDC). Despite major losses to the
government, the state didn't scrap the deal nor could it help the
thirsty villagers.

Since then, Chhattisgarh has seen hundreds of companies investing in the
state and many vying for the river waters. In a recent deal, the Water
Resource Department (WRD) gave its nod to 141 private and government
projects for which it will be supplying nearly 2,600 million cubic
metres (mcm) of water from rivers every year. Interestingly the state
supplies only 2,000 mcm of water for irrigation every year.

Carved out of Madhya Pradesh on 1 November 2000, Chhattisgarh wasn't a
water-scarce state. According to unofficial estimates, the state has
32,000 ponds. With major river basins — Mahanadi, Godavari, Narmada and
Brahmani Kachar — and several major rivers — Kurkut, Mahanadi, Kharun,
Sheonath, Indravati, Jonk, Kelo, Sabri, Hasdev, Peri, and Maand — water
shortage was never an issue.

But the priorities have changed. Earlier, dams were built to store water
for irrigation. Now, they are being constructed for supplying water to
industry. In fact, the Chhattisgarh government openly declares that it
is committed to giving water to industries throughout the year but not
to farmers for rabi crop.

THE SALE of Chhattisgarh's rivers began in 1998 when the then MP
government handed a 23.6 km stretch of Sheonath river in Durg to RWL,
pleading shortage of funds for supplying water to industries. In a
shocking story of "corruption and favouritism", as an Assembly nominated
committee discovered later, the Rs. 9 crore project was signed on 5
October 1998 between MPAKVN and RWL on a build, own, operate and
transfer (BOOT) basis. The plan was to build a barrage on the Sheonath
to supply up to 30 million litres per day (mld) to the Borai Industrial
Centre. Construction was completed in two years and operations began in
January 2001.

"We got to know about the sale of the river only when RWL began
harassing us," alleges Khemlal Sahu, a farmer in Mahmara. "Almost 25
percent of the villagers are fishermen. They were stopped from fishing.
Soon, fencing around the 23.6 km stretch began. Iron gates were erected
on both sides of the barrage to prevent locals from approaching the river."

The deal inherited by the CSIDC gave RWL exclusive access to the river
water for 22 years. It also held control rights over the supply of water
to the Borai Industrial Centre and the CSIDC was obliged to provide land
free of cost. CSIDC also handed over its entire infrastructure in Borai,
and assets worth Rs. 5 crore to Kailash Soni, owner of Kailash
Engineering, for a lease of a token Rs. 1 per year for establishing a
water supply project on BOOT basis. The CSIDC was to purchase water from
RWL and later sell it to the industrial units in Borai.

Though there was a lack of sufficient demand for water, then MPAKVN
managing director GS Mishra signed the agreement with RWL. Back then,
Borai had two large and medium-scale industries, and their combined
water requirement was between 1.14 and 2.5 mld, while the CSIDC had to
compulsorily shell out money for 4 mld. Adding to the losses, CSIDC
purchased water at Rs. 15 a cubic metre (1,000 litres) from RWL.
However, it sold water to industries at only Rs. 12 a cubic metre. The
agreement meant that CSIDC would incur a loss of 20 percent on every
unit of water it sold. Increase in both supply or demand would mean
higher losses. Adding to the toll was Hindustan Electro Graphite (HEG)
that was to buy almost 90 percent of the CSIDC's water sales but reneged
on its agreement.

While CSIDC continued to incur losses, public outrage fuelled by
continuous harassment of people by RWL saw several NGOs participating in
the agitation. Those who joined the protest included villagers from
Mohlai, Boludi, Malood, Kotni, Piperchadi, Kekro Koli, Bedwa Pathra,
Vagrum Nala and Basik Hai — all affected by the drying up of the
Sheonath downstream.

The Nadi Ghati Morcha (NGM) started a movement from Durg that reached
Raipur and then Delhi. Roadblocks and rallies were held. The ferocity of
the protests finally forced the then chief minister Ajit Jogi to
announce the "abrogation of the RWL contract" on 2 April 2003. However,
he didn't keep his promise.

NGM coordinator Gautam Bandhopadhyay says, "People had plenty of fresh
water for cooking and working. But they don't have rights over the
common property. RWL may have invested money but the villagers who are
living in the area for centuries have invested resources and have equal
rights on the water."

In 2003, the state Assembly constituted a Public Accounts Committee
(PAC) to probe the privatisation of Sheonath. The committee presented
its report on 16 March 2007 lambasting both CSIDC and RWL for signing a
deal that caused loss to the state exchequer and harm to villagers.

THE GOVERNMENT vowed to cancel the contract "within a legal framework"
and pay compensation to RWL for the lease period after the legal
department and the Advocate General give their opinions. The legal
department reportedly said, "If the government ends the contract, it has
to pay a compensation of Rs. 400 crore." Since then, nothing has
changed. RWL continues to manage the barrage and the reservoir while the
spate of public protests too has declined and so has their impact.

Ramchandra Singhdeo, who was the irrigation minister when the deal was
struck, says, "Without the knowledge of the irrigation secretary,
engineer-in-chief and myself, the CSIDC managing director signed a deal
that proved detrimental to both villagers and government. We sought
action reports from the government over the PAC's recommendations but
the usual reply was: the legal department is looking into the matter. I
don't know why the government is reluctant to scrap this deal."

Current CSIDC MD Devendra Singh says the contract can continue as it has
started to reap benefits. "Earlier, CSIDC was making losses. But now we
are selling 8-9 mld of water to half-a-dozen big and small companies at
beneficial rates," he says. Singh is quick to add that scrapping the
agreement would mean CSIDC paying Rs. 36 crore to RWL as compensation.

Water Resource Minister Hemchand Yadav concedes the deal between CSIDC
and RWL was "flawed and skewed" in favour of the latter. The government
is willing to scrap the contract and pay Rs. 10 crore to RWL as
compensation. "This deal affected several villages and the government. I
guess the controversy will die in a year," he says.

But will RWL accept Rs. 10 crore? "If the contract is stopped before its
term, the termination clauses have to be fulfilled. But nothing like
that is going to happen," says a defiant Pramod Agrawal, RWL project
director. Lashing out at the PAC, he says it has no jurisdiction over
the issue, which is in the domain of the public undertaking committee.
"But the public undertaking committee was never formed by the state
Assembly. Even PAC members never talked to us. It's a farce. We reject
it," he says.

Agrawal says three other projects — New Capital Water Supply, Siltra
Industrial Estate Water Supply and Urla Industrial Estate Water Supply —
were also privatised "and if our project is terminated, these projects
too should be abrogated. Why isn't anyone talking about these projects?
We are convinced the government or the CSIDC don't have the money to
compensate us and abrogate the agreement".
Precious commodity Jindal Steel draws 35,400 cubic metres of water from
Kelo every day

Agrawal denied that villagers are being stopped from using the river
water. "It was on the orders of the CSIDC and sub-district magistrate
that revenue department officials uprooted the villagers' water pumps.
We didn't allow fishermen to catch fish because we were following police
orders. The police wanted them to stay away from our power sub-station
fearing violence."

MEANWHILE, TROUBLE was brewing in Bonda Tikra village, Raigarh district.
Shanti Bai and her husband Shauki Lal, both daily wagers, were living
happily in Bonda Tikra, located on the banks of Kelo, a tributary of
Mahanadi, until a check dam and intake well were constructed by Jindal
Steel and Power Ltd (JSPL). "I didn't know how precious water was until
it was snatched from us," says Bai.
'Dozens of villages located downstream are now parched. What belonged to
us for centuries is no longer available for us' RAMORAM THAKUR,
Villager, Mahmara

In 1996, JSPL tried to draw water from Kelo for its sponge iron factory
and power plant. However, the government refused permission saying it
would cause water shortage. JSPL mounted pressure and it soon erected a
stop dam and began drawing 35,400 cubic metres of water every day.

The structures hampered irrigation in 14 villages downstream. "In
summers, we usually dig the riverbed with our hands and draw water in
plastic jugs. Now, the water pump sucks all the water while we struggle
to get a drop," says Bai.

To protest against JSPL's dam and intake well, locals sat on a seven-day
hunger strike in 1998. When the rest of the country was celebrating
Republic Day, Satyabhama, an Adivasi woman, became the struggle's first
'martyr'. "Her death won't go waste. Our resistance will continue," vows
Bai. "But our struggle's success depends on whose side the government
decides to take."

Almost 13 years have passed since the fight to restore the river flow
began. The intake well and the check dam still stand on the river Kelo
protected by JSPL guards.

The success of Sheonath and Kelo spurred a series of private projects
that saw villagers pitted against government and private firms. Private
barrages and dams over many rivers have come up since then. Kurkut in
Raigarh, Sabri in Dantewada, Kharun in Raipur, Hasdeo in Korba and
Champa, and Maand in Janjgir-Champa have been handed over to private

Almost 60 km from Raigarh, Ghanau Ram Gariya, 62, along with dozens of
tribals in Burbhona village, is waiting in line to collect subsidised
rice not from a rice depot but from an official sitting inside a
community dispensary. "This should tell you the state of affairs in our
village," says Gariya, a farmer-turned-casual labourer.

Till 2007, Gariya and other tribals grew melon and cucumber on Kurkut's
banks. Rabi farming was also done in April, May and June. However, a
huge barrage and a dam that was built 35 km upstream at Rabo village
soon choked the river flow. The water was being fed to 1,000 MW JSPL
power plants at Tamnar. Soon, farmers living in 12 villages, including
Jampali, Kikricholi, Dehjari, lost their water source.

"Since then, we have to migrate to other villages in the summer. Do you
know how it feels when you don't bathe or wash your face for weeks at a
stretch?" asks Gariya. Last summer, a group of villagers headed for Rabo
dam seeking immediate discharge of water from Kurkut. JSPL employees
allegedly thrashed them with bamboo sticks. The distraught tribals and
villagers wrote a letter to their MLA, Anand Kumar Patel, seeking
immediate discharge of water. The MLA managed to get water released only
once in 90 days of the harsh summer.

"That was the time when we cursed ourselves for not joining the
agitation led by Rabo villagers. It taught us a lesson," says Vedran
Dhandsena, one of the village heads. He is referring to the agitation in
which villagers of Rabo, where a dam and a barrage was built, had
protested the construction of mega structures in the village and the
agreement that allowed JSPL to draw 54 mcm of water every year from
Kurkut and release only 7 mcm per year.

In 2004, when JSPL started acquisition of additional land in Rabo for
its power project, residents of 15 villages started an agitation with
tough resistance coming from Rabo village where the dam was to be built.
The dam would submerge almost 350 hectares of forest land and affect
thousands of hectares of irrigated land.

Rabo villagers spearheaded the protest and blocked roads leading to the
project site with tree trunks and rocks. They also patrolled the
entrance to the village for several nights. And soon public outrage
pushed the government to order a halt on the work at site on 4 November

"But with government officials' patronage, Jindal resumed work within a
week," recalls Champi Bai, who became famous for grabbing a revenue
official by his collar during the protest. She says the government
didn't hold any public hearing when JSPL got clearance in 1997 for the
first phase of the power project in Tamnar. "From the beginning, the
government has worked to benefit the company," she says.

The government not only gave up on the ownership of the dam but also
charged JSPL a paltry 90 paise for every 1,000 litres when other firms
pay around Rs. 3 for the same.

"This is just another example of how the government ruined its
resources, favoured a private company and harmed tribals of a dozen
villages," says Ramesh Agarwal, 55, an activist and founder of Jan
Chetana, which monitors mining, water and industrial projects in Raigarh.

The agreement dated 14 January 2008 signed with the JSPL, a copy of
which is in TEHELKA'S possession, reads, "The company shall pay to the
government rates for water drawn by it from the said natural or
government water source at the rates fixed by the WRD order No.
1819/7-A/WR/TS/IWS/02/D-4 Raipur dated 21.03.2006, which is 90 paise
only per cubic metre."

THE JSPL management says it owns the dam without which "we couldn't get
70 percent of the money from banks as loan". "Banks give a loan only
when the structure is yours," says Pradeep Tandon, senior
vice-president, corporate affairs, JSPL. Last May, the government
revised the rates and JSPL would be paying Rs. 2.80 per cubic metre, he
says. Asked about the tussle between JSPL and villagers, he says the
people's anger should be directed against the government and not at the
JSPL, because "we only work under government rules".

There are other instances when companies have guzzled water without any
proper agreement with the government. According to the Comptroller and
Auditor General (CAG) report for the year ended 31 March 2009, National
Thermal Power Corporation has been drawing water from a canal in the
state for the past 11 years without any agreement. "The penalty charges
for the unauthorised withdrawal amounts to Rs. 316.26 crore for the
period between June 1998 to March 2009," the report says.
'Private pumps suck all the water while we don't get any. I didn't know
how precious water was until it was snatched from us' SHANTI BAI,
Villager, Bonda Tikra

In its previous report, the CAG had lambasted the CSIDC for "causing a
revenue loss of Rs. 22.09 crore due to the supply of water at lower
rates, non-revision of usage charges and delay in execution of lease
deeds" even as the report said that the Chhattisgarh government suffered
a revenue loss of more than Rs. 185 crore during 2007-08 because of
"undue benefits" provided to various companies such as "allotment of
land and water at reduced rates".

Despite the CAG's adverse report and people's protests, the government
seems undeterred. In fact, it gave its nod last year to thermal power
plants in Raigarh, Jangjir and Champa districts. In their project
reports, most of them made it clear that they would be drawing water
from the Mahanadi. It won't be long before villagers living near the
plants lose out on water.

In southern Chhattisgarh, a large portion of Sabri, which flows through
Dantewada district, is under the operation of Essar Steel Chhattisgarh
Ltd and Tata Steel. Both draw almost 100 mcm of water every year. Essar
has a pipeline network from Dantewada to the port of Visakhapatnam.
Essar sends iron-ore through this pipeline with the force of the water
from Sabri.

According to the Akhil Bharatiya Adivasi Mahasabha (ABAM), an umbrella
organisation of tribal groups in Bastar, people had raised the issue of
water shortage in the villages of downstream Sabri at several public
hearings, "but government officials never listened to our pleas".
However, Essar denies the accusation. "Our intake of water does not
affect local availability in any manner," says Parikshit Kaul, joint
general manager, corporate affairs.

According to a WRD report, almost 2,600 mcm per year has been allotted
to industry while the state offers only 2,000 mcm for agriculture and
irrigation, pushing many to think that Chhattisgarh will soon have a
distinctive status and its industrial water use will far outstrip that
of agriculture.

"Industries are the priority of the state government. This is not a
democratised development. If this continues, a large part of the
population could start a new kind of resistance that will have
far-reaching consequences," warns activist Agarwal.

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