From: budaraju@cae.wisc.edu (Srinivas Budaraju)
Subject: Sardar Sarovar Project - An Overview - 2/7
Organization: U of Wisconsin-Madison College of Engineering
Distribution: world 
Date: 12 Oct 92 14:05:00 CDT

INTRODUCTION

Since 1947, policies of the Indian Government in the areas of 
power generation, irrigation and flood control have relied 
heavily on large dams.  The Sardar Sarovar Dam, the 
centerpiece of the Narmada Valley Development Project, is the 
latest and largest example of such efforts.  According to a 
1988 government report, the project is estimated to cost more 
than Rs. 110 billion,  to create irrigation potential for 1.9 
million ha of land, and to generate 550 MW of electricity.  
But, according to data published in the report of the Morse 
Commission (an independent review panel appointed by the 
World Bank), the net returns of the project will be zero.  
Furthermore, the project will have enormous social costs; 
over a million people will be displaced by the overall 
Narmada Valley Project with negligible hope of obtaining 
adequate resettlement compensation.  In all likelihood, the 
project will inflict suffering on a horrific scale, disrupt 
balances of nature without setting corrective mechanisms in 
place, and yet provide little or no economic benefits.

In part I of this report, we summarize the available 
information on the Sardar Sarovar Project (SSP), including 
its proclaimed goals, an assessment of its costs and 
benefits, the status of the resettlement and rehabilitation 
plan for displaced people, the government's response to 
protests by social groups, and a brief summary of the 
findings of the Morse commission which itself touches on many 
of these aspects.  In part II of the report, we address the 
broader question of the role of large dams in economic 
development.    We give a brief assessment of the Indian 
experience with large dams so far, and discuss alternatives 
to large dams that have proven successful in meeting the same 
goals.


I.	THE SARDAR SAROVAR PROJECT

I.1.	Stated goals and estimated costs of the project

The Sardar Sarovar Project has four major goals.  The primary 
stated purpose of the project is to irrigate 1.9 million 
hectares  (ha) of land in Gujarat.  Nearly 75% of the 
undeveloped irrigation potential and drought-prone areas in 
Gujarat are situated in the Narmada River basin.  The SSP 
also has the potential to irrigate about 70,000 hectares (ha) 
in the state of Rajasthan.  It is expected to generate 550 MW 
of electricity, enough to power an industrial revolution 
across the entire state of Gujarat.  It is expected to 
provide 1,300 million cubic-meters of water per year for 
municipal and industrial purposes.  Finally, a drainage 
system is planned to carry away flood waters and to protect 
against water logging of irrigated lands.  

The total projected cost of the dam is about Rs. 112 billion 
at 1987 prices, not including the costs associated with 
catchment area treatment  (CAT) and compensatory 
afforestation. Of this total cost, the World Bank  (WB) 
assistance is Rs. 7 billion at 10.75% annual interest, Japan 
will provide a loan of Rs. 1.5 billion, and the Oil and 
Natural Gas Commission  will provide a loan of Rs. 2 billion 
at 14.5% annual interest [Patel 1988].  Maharashtra, Madhya 
Pradesh (MP), and Rajasthan are required to contribute Rs. 20 
billion.  Thus there is a shortfall of Rs. 70 billion, which 
has to be covered by the government of Gujarat.  The 
government has applied for an additional Rs. 7 billion from 
the World Bank.

In addition to the costs mentioned above, the project will 
have other costs due to the submergence of land and forests.  
According to government estimates, the Sardar Sarovar 
reservoir would submerge or affect 37,000 ha in three Indian 
states--Maharashtra, Gujarat and MP [Morse 1992].  Government 
estimates state that this total land area includes 13,744 ha 
of forest land and 11,318 ha of fertile agricultural land. 

Finally, the SSP has necessitated the resettlement and 
rehabilitation of 100,000 people from 245 villages.  The 
government has promised to adequately reimburse all affected 
villagers and tribals with land and cash.  

I.2.	Assessment of the costs and benefits

What are the implications of the estimated costs and benefits 
of the project listed above?  Is it possible for the central 
and state governments to meet these costs within the 
projected time-frame of the project? To what extent are the 
promised benefits likely to be achieved? How will the true 
environmental impact compare against the government 
projections?  These are the most difficult questions one 
faces in evaluating a project of this nature.  Numerous 
studies have been undertaken to address some of these issues, 
both by governmental agencies as well as private bodies.  In 
this section, we try to summarize some of the key findings. 

The implications of the monetary costs described above are 
staggering.  Consider the following facts:

o	The total cost of Rs. 113 billion is as much as the 
total outlay of the center and states put together for all 
major and medium irrigation projects in the entire Seventh 
Plan.  (One should therefore not be surprised that the 
Narmada Valley Project is the largest of its kind in the 
world!)

o	The share of the state of Gujarat is Rs. 9 billion for 
each of the next eight years.  But Gujarat's annual outlay 
for medium and large irrigation projects has been Rs. 3 
billion throughout the Seventh Plan.  Furthermore, even 
without the cost of the SSP, its budgetary deficit is already 
at a record Rs. 6 billion!

o	The above cost estimates are optimistic, since they 
completely ignore cost overruns due to construction delays.  
The project is already 19 months behind schedule.  The river-
bed power house was 12 months behind schedule as of May 1989.

o	Furthermore, the estimates also ignore other costs, 
particularly CAT  and compensatory afforestation.

These figures strongly indicate that the dam will be an 
enormous financial burden on the center as well as the 
states.

And what of the benefits it has been expected to provide? In 
1988, the Gujarat government realized that under the original 
17-22 year schedule, the costs of the SSP would outweigh the 
benefits: the benefit-to-cost ratio was less than 1:1.  It 
was decided to "speed up" the project to complete it in 10 
years.  The benefit-cost ratio was then officially estimated 
to be 1.12:1, still below the minimum 1.5:1 ratio required by 
the Planning Commission.  Nevertheless, within three months, 
the project was cleared by the Commission.  Moreover,*

o	although the dam has been hailed as the lifeline of 
Gujarat, and a permanent solution to the water problem of 
Saurashtra and Kutch, the government's own data show that 56 
out of the 69 talukas of Saurashtra are to get no water from 
the SSP.  In fact, in all of Gujarat, 42 out of 47 tribal 
talukas and pockets are to get no water from the SSP.

o	For MP, the total irrigation the project is expected to 
provide is less than the area to be submerged.

o	According to official statistics, the SSP and the 
Narmada Sarovar Project (NSP) will together submerge about 
55,681 ha of prime agricultural land, as well as 56,066 ha of 
forest land.  The Department of Environment and Forests (DEF) 
estimated the cost due to the loss of forests alone to be Rs. 
391 billion (Rs. 302 billion due to NSP and Rs. 89 billion 
due to SSP) [Amte 1990, Kalpavriksh 1988].

o	One potentially serious problem faced by every 
irrigation project is water-logging of the command area (the 
area irrigated by the project), which can render the land 
useless because of excess water in the soil.  For example, 
the Rs. 3 billion Tawa project reduced farm production 
instead of increasing it, precisely because of water-logging 
[Singh 1990].  And in the case of SSP, a study by the Indian 
Institute of Science, Bangalore has found that nearly 40% of 
the NSP command area faces the threat of water-logging.  
Despite such findings, and despite huge losses due to water-
logging in previous dam projects (50% in Gandhi Sagar, 33.7% 
in Tungabhadra, 20% in Sriram Sagar, besides Tawa and many 
more [Singh 1990]), no plans to prevent it have been made so 
far.

o	Siltation is another serious problem, in which silt 
deposited on the reservoir bed reduces the water-storage 
capacity of the reservoir, undermines its effectiveness for 
power-generation, irrigation and flood-control, even 
rendering it useless in the long term.  In fact, the life of 
the Bhakra dam has been reduced from 88 to 47 years, and the 
Hirakud dam from 110 to 35 years, both due to siltation 
[Singh 1990].   CAT  is necessary to prevent soil erosion and 
thereby reduce siltation, but it is expensive.  In the case 
of SSP, the Dewan Committee set up by the government in 1985 
recommended a minimum expenditure of Rs. 5.2 billion for the 
area requiring priority treatment, and this covered only 16% 
of the total catchment area.  The Department of Environment 
and Forests (DEF) expressly stipulated in 1987 that this 
treatment should be completed before filling the reservoir.  
And yet, this cost is not included in the government's cost 
estimates listed above.

Previous experience with large dams has consistently shown 
that the benefits actually realized from the dams often fall 
far short of early projections.  As discussed in part II of 
the report, the problems of water-logging, salinity, 
siltation, canal water losses due to seepage, destruction of 
forests, flooding, etc., have been found in varying degrees 
in virtually every major or medium irrigation project in 
India.  By every indication so far, the Sardar Sarovar 
Project is inevitably heading toward exactly the same 
problems. 

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This report on the Sardar Sarovar Project is available through 
anonymous ftp from nacho.cs.wisc.edu (128.105.8.15) in directory pub.
If you want a hard copy of the report, send me e-mail.

-Srinivas				budaraju@cae.wisc.edu