The World Bank is poised to resume lending for destructive large dams in
India. Bank staff are currently scouring India for new dam projects to fund
in the coming year. The last time the Bank supported a dam in India – the
Sardar Sarovar project in the Narmada Valley – strong opposition and
an independent review documenting numerous policy violations led to an embarrassing
withdrawal of Bank support and the establishment of the Inspection Panel.
On its 60th anniversary, the World Bank seems to be suffering from a case
of institutional amnesia. The World Bank’s legacy of support for large
dams has been shameful. Bank–funded dams have displaced more than 10 million
people, flooded millions of hectares of lands and pushed many countries deeper
into debt. Yet the Bank is set to repeat its mistakes all over again. In
its 60th year, one would hope that the Bank would be a bit wiser by now," says
Peter Bosshard, Policy Director for International Rivers.
The foray back into large dams in India comes on the heels of the Bank’s
approval of an Infrastructure Action Plan (IAP) in July 2003. The Plan aims
to increase Bank support for what it terms "high risk/high reward" infrastructure
projects such as large dams over the next two years. The implementation of
the plan will be discussed by the Bank’s Development Committee at the
Spring Meetings in Washington, DC on April 25.
As part of the IAP, the World Bank recently announced a doubling of its lending
for India, predominantly for projects in the power, water and transport sectors.
Development of infrastructure in India is urgently needed, but the Bank’s
plans for the Indian water and power sectors ignore important lessons of
the past. According to a former World Bank India country director, the most
important reform in the power sector would be to combat the "widespread
theft, graft and corruption" in the distribution of electricity.
The Bank’s latest evaluations of the Indian power and water sectors
recommended that the Bank should not support further power generation and
water supply projects in such an environment. Yet vested interests of politicians,
aid bureaucracies and equipment suppliers favour the promotion of new, capital–intensive
investments over the efficient management of existing infrastructure or the
development of decentralized, community– based infrastructure.
"
The Bank’s new dam–building plans in India not only defy the lessons
of rational sector planning, they will quite likely also have massive social
and environmental consequences. They will pour more water into the leaking
tubs of India’s water and power sectors, rather than plugging the holes
in the system," says Bosshard.
The new strategy also disregards current best practice such as the recommendations
of the World Commission on Dams, and a new World Bank Sourcebook on Options
Assessment, both of which recommend involving all relevant stakeholders in
development decisions, and assessing all options "strategically and
comprehensively". A manager of the Bank’s Delhi office labelled
these best practice recommendations as "Washington speak" in a
meeting with International Rivers.
Today, International Rivers released a new report on how the Bank
is implementing its Infrastructure Action Plan. Entitled, The World Bank at 60: A Case of Institutional Amnesia?, the report concludes that the new
high–risk strategy "will exacerbate conflicts, but will not help to
reach the Millenium Development Goals".
In The World Bank at 60: A Case of Institutional Amnesia?, International Rivers called on the Bank
to follow the recommendations of the World Commission on Dams in future water
and energy projects, assess all needs and options in a balanced and participatory
way, strengthen the rights of project–affected people, and halt its engagement
in new high–risk projects such as large dams.
