External funding for the ambitious river-linking project has been rejected. Instead, industry has been called upon to support the costliest endeavour that the country has ever undertaken. But, by opening up the floodgates to private sector investment, the government could be bargaining away the traditional rights of people over water resources
The chairman of the task force on river-linking, Suresh Prabhu, the National Water Development Agency and the ministry of water resources are taking exception to all criticism levied against the Rs 560,000 crore initiative to link India's Himalayan and peninsular rivers in an unbelievable period of 10 years.
Though the National Water Development Agency has conducted feasibility studies on six of the possible 30 river links over last two decades, Suresh Prabhu is confident that the project will be completed within the given timeframe. If delays in the execution of projects in the past are anything to go by, this confidence is an overstatement. However, in the absence of punitive action on cost overruns due to delayed execution, optimism continues to capture the popular imagination!
Given the incredible cost of the project, should the task force not be held accountable for taxing the public exchequer in the event of a likely delay? Already cost overruns between 50 to 893% over the original estimates have been reported from some of the large water development projects. This has meant a burden of Rs 70,000 crore and Rs 110,000 crore on the public exchequer in the Tenth and Eleventh Five Year Plan respectively for the completion of 'spillover projects'.
This leaves little scope for financing the interlinking project out of the planned expenditure. But the task force continues to make everyone believe that the project can be financed from available resources. The crucial question remains: If the internal resource situation is so good, why is the government raising loans for poverty reduction and infrastructure development from external donors?
The current external debt situation (which has already reached a whopping Rs 500,000 crore) may have discouraged the task force from opting for external lending. But the internal resource situation doesn't look very good either, or else it would have helped ease a portion of the external debt. Prabhu's belief in a healthy internal resource situation appears to be a strategic ploy to keep the controversial aspect of financing the project from being raised.
Having categorically dismissed raising external funding for the project, Prabhu has called on industry to come forward and support the costliest endeavour the country has ever undertaken. "The project is all about tangible benefits," he says. It will irrigate an additional 34 million hectares, provide drinking water to 101 districts and five metros and generate 34,000 MW of cheap hydropower -- all this and much more for just Rs 560,000 crore.
The Federation of Indian Chambers of Commerce and Industry (FICCI) plans to hold a national conclave to discuss its position in the light of potential benefits that could accrue from the project. Following the privatisation of a stretch of the Sheonath river in Chhattisgarh, the private sector sees a distinct role for itself in managing the country's water resources. The interlinking of rivers proposal may indeed provide that opportunity.
Radius Water Ltd, the company that has `ownership' over a section of the Sheonath river, under lease for 30 years, is selling water to industry as well as to the government. It is, however, another matter that the people on the banks of the river have lost ownership over their natural heritage. Farmers are not allowed to use water from the river, and fishermen are barred from casting nets in its waters. People don't even risk taking a bath in the river.
By opening up the floodgates to private sector investment in the interlinking proposal, the task force may end up bargaining away the traditional rights of people over water resources. Because it is not just capital investment that the government is seeking for the project but also recurring expenses towards its operation and management. Privatisation helps achieve both, as consumers have to pay for every drop, whether for household requirements or irrigation.
With operations and maintenance expected to cost no less than Rs 30,000 per hectare for the interlinking proposal, the success of the river-linking project will depend on how best recurring costs are realised from users. Undoubtedly, the water-stressed communities that stand to benefit from the proposed interlinking will have to incur the costs of sustaining this ambitious project.
InfoChange News & Features, March 2003