WITH THE World Bank sanctioning a $400 million loan to the National Thermal Power Corp (NTPC), the Singrauli Super Thermal Power Station (SSTPS) has received a fresh lease on life -- but only just.

USA, Germany and Belgium abstained from voting at the bank's June 29 meeting, citing environmental reasons. The meeting could not take place on June 24, the scheduled date, because representatives of these countries felt NTPC had not taken sufficient measures to rehabilitate the 1.5 lakh people displaced from the 1,400 ha on the Madhya Pradesh-Uttar Pradesh border, acquired in 1978 for the project.

As a result of these misgivings, the bank says it will release further loans only after a review of the project 18-24 months hence. The $400 million just sanctioned is the first payment on a total loan of $1.2 billion that the bank has promised SSTPS.

As preconditions for releasing the dollars, the bank wants SSTPS to formulate a comprehensive rehabilitation and resettlement (R&R) package and an environmental management plan (EMP). The bank had come under fire from several non-governmental organisations, notably USA's Environment Defense Fund (EDF) whose attorney Lori Udall criticised the bank for supporting "environmentally and socially destructive projects in developing countries".
Prompt response NTPC officials say they have responded promptly to the bank's conditions. "We prepared our R&R plan based on the bank's conditionalities even as the bank was processing the loan applications," says Rajender Singh, chairperson and managing director of NTPC.

The corporation's senior manager, Urmila Mukerjee, laid the blame for the delay in EMP and R&R plans on the government, saying: "This is because neither the state nor the Centre suggested we take measures for the R&R of the affected people." The department of science and technology (DST) also is being blamed for giving environmental clearance to the project in 1978 without, says NTPC operations director R V Shahi, "conducting a detailed environment and socio-economic impact survey because there was no such concept at the time."

Mukerjee now contends "90 per cent of the oustees have been rehabilitated following land assessments", but Udall insists only 30 per cent of the affected people have been adequately compensated (See box).

An spokesperson of the ministry of environment and forests (MEF) says DST's clearance for the corporation's EMP proposal still holds good, but if NTPC comes up with a new proposal, "MEF will re-examine the project according to its own rules, regardless of what the bank has to say."

Officials at the ministry of welfare (MoW) are also distancing themselves from the project, pointing out the coal ministry has its own R&R guidelines and they can intervene only after the Union cabinet adopts the proposed national policy for R&R. Coal ministry officials are confident that once "inadequacies" in the R&R policy of Coal India Ltd (CIL) are removed, there will be no more trouble on this score at SSTPS. Environmental objections
But it isn't only R&R problems that trouble SSTPS. NGOs who have visited Singrauli have been voicing environmental objections since the mid-1980s.

S K Roy, former chairperson of the Committee for Environmental Appraisal of Thermal Power Projects, explains, "In the 1970s, the Union government decided to build a series of coal-fired, water-cooled super thermal plants in the area, exploiting the proximity of the Rihand reservoir and coal mines" (See box). However, an aluminium smelter, a chemical plant and a cement plant also were built and effluents from these now flow untreated into the reservoir.

Controversy arising from the region's development, says Roy, began to hot up in the mid-1980s when a team from an EDF team joined by members of Lokayan, a Delhi-based NGO, visited Singrauli and reported the region had been turned into a wasteland and it is suffering from "severe air, water and soil pollution". The team blamed unchecked industrial growth in the region for the spread of tuberculosis and chloroquine-resistant malaria and for stomach, skin and respiratory ailments.

The EDF-Lokayan report noted about 2 lakh people in the area were displaced initially by the Rihand dam and then by SSTPS. Water from the Rihand reservoir, meant for irrigation, the report continued, was being used solely by thermal power and hydroelectric plants and ground and surface water was being contaminated by their effluent discharge (See box).

Rup Narayan, a Varanasi environmentalist, blames increasing industrial activity for depletion of the area's dry deciduous forests and open grasslands. There are also heavy biotic pressures on the forests from villagers encroaching on the forests and converting them into farmland. Sulphur dioxide emissions from the thermal plants has produced acid rain and Benaras Hindu University researchers say this has increased the acidity of the region's soil and water and caused an overall decline in forest cover and biodiversity.

Selfish objections
Meanwhile, a Delhi-based environmentalist not wanting to be named, describes EDF's objections as selfish. "EDF has strongly castigated SSTPS and I second that," he says. "It is also responsible for getting USA, Germany and Belgium to abstain from voting on funding the project. However, it has categorically stated it is doing so because Singrauli will become one of the world's largest centres for the production of greenhouse gases. This is a very Western notion."

EDF representatives are confident that when SSTPS comes up for review in 18 months, USA will vote against further funding. Bruce Rich, director of EDF's international programme, notes that on the one hand the G-7 (the world's most developed countries) funds the bank to finance such "monstrosities" as the Singrauli project, while simultaneously supporting the Global Environment Facility (GEF), whose brief includes funding environmentally benign projects.

Udall says the R&R package prepared for SSTPS is poor and needs reworking. She maintains R&R and project finance should be linked, but this has not been done in the present loan approval. The bank, she insists, should not go by what NTPC says it will do for R&R.

NTPC contends its plants are technically "near-perfect" because their emissions of sulphur dioxide, suspended particulate matter and nitrogen oxides are well below the limits set by the Uttar Pradesh state pollution control board. But will people living in the Singrauli area find solace in this contention?