By Pratap Chatterjee
WASHINGTON, Jun 20 1995 (IPS)

The World Bank has decided to delay a 425-million-dollar loan to expand India’s coal mines until after the next national elections, according to IPS sources.

The loan is the second in a new series of loans intended to add 16,000 megawatts to the Indian power sector. Indian planners say the country needs 150,000 MW of electricity-generating capacity over the next 15 years, in addition to the 80,000 in existence today.

The first loan, for 400 million dollars, was approved in June 1993 for the National Thermal Power Corporation (NTPC) to expand superthermal power plants in Singrauli, central India, by 2,000 megawatts.

Calcutta-based Coal India Limited requested the second loan to expand 33 coal mines across India to supply NTPC plants. Several Bank missions have met with Coal India executives, but a date for approving the loan, originally set for March, has already been put off twice, first to April and then to September.

This month, the approval date was postponed yet again at the request of the Indian government. One of the reasons, say Bank officials, is that the current Congress Party-led government in New Delhi could be unseated in elections which must be held by June, 1996.

Congress’ hold on power is anything but certain. In recent months, the party has been defeated in several state-level elections by the right-wing Bharatiya Janata Party (BJP) and other opposition parties.

The BJP swept the western state of Maharashtra where it has put into question decisions made by previous Congress-led governments.

The Hindu-nationalist party, for example, is now challenging a three-billion-dollar power project led by Texas-based Enron Corporation on the grounds that the project is too expensive and was awarded without competitive bidding.

“The Indian government wants us to wait until after the elections,” said an official who works in the India country department in the Bank’s Washington headquarters. “That probably means about a year,” said the official, who asked not to be named.

The loan request states that Coal India intends to make the coal industry commercially viable and eliminate its dependence on the government budget.

Apart from the political problems faced by the Congress Party, the Coal India project could have significant social effects. Twenty of the 33 mine expansions will involve the resettlement of 18,257 people, according to Bank estimates.

Local activists say that Coal India’s record on resettlement has been terrible. One region that has been devastated by Coal India mines is Singrauli in central India.

Over 150,000 people have been displaced in the last 30 years in Singrauli — some of them have had to move as many as five times — to make way for the coal mines, a dam and five NTPC power plants.

The area surrounding the villages of Singrauli was, until 30 years ago, a quiet, dense forest filled with wildlife, including tigers and bears. Initial change came in the 1960s when the Rihand dam was built to provide electricity.

The World Bank’s role in the region began in 1977 when it lent 850 million dollars for the construction of a major coal power plant, an open-pit mine, and transmission lines.

For 300 people from the Singrauli village of Khadia-gaon, who were moved a year ago by Northern Coal Limited (NCL), a subsidiary of Coal India Limited, to a new settlement called Ambedkarnagar, the coal mines have brought nothing but misery.

NCL has turned their former homes into a dump yard for a neighbouring coal mine. But it failed to provide them with anything more than 58 plots on marginal land in Ambedkarnagar and a small cash settlement as compensation.

The villagers say NCL did not provide them with potable water, electricity or sanitation facilities. Javetri Devi, a local woman, says that she and her family dug their own well to get water. “Without this we would have no water,” she says.

The villagers also built their own houses with local wood and bricks, but two houses have already collapsed due to blasting in the area. Only 20 people in the settlement have been given jobs at the mine. For the other 280, there is no work and no decent land to farm.

“When the government talks about sustainable development…, what are they doing about these people?” asks K.C. Sharma, a local activist.

“There is no work for them because they have lost their agricultural lands and there are few jobs in the power plants. Worst of all there, is no place in India where the water and air are more polluted,” says Sharma, who has been resettled five times in the last three decades.

“It is our job to assist Coal India to make resettlement, which is never a desirable matter, as painless as possible. But I have yet to see somebody, who was resettled (and) who was completely satisfied,” says one Bank official.

“The only mine that will be expanded in Singrauli under the new loan is Jingurdah. The other mines having nothing to do with us. I understand that people have difficult living conditions and my heart goes out to them,” added the official, who asked not to be identified.

Excerpt: