The role of Japanese foreign aid in a controversial Indian dam project is under fire from environmentalists and local opponents, who accused the Tokyo government Thursday of failing to evaluate the program’s social and environmental impact.
At issue is the Narmada Dam Project, a massive irrigation and power generation scheme backed by the World Bank. It would build 30 major dams and nearly 3,000 smaller ones over the next 50 years in the vicinity of the Narmada River in Gujarat state, about 200 miles north of Bombay.
Critics contend that the project will eventually flood about 865,000 acres of forests and 500,000 acres of farmland, forcing the relocation of more than 1 million people.
The involvement of strategic Japanese financing underscores a weak point in Tokyo’s foreign aid program, which traditionally has not screened projects for environmental impact. Although Japan now rivals the United States as the world’s largest aid donor, its agencies have minimal resources to conduct independent assessments of the environmental or social effects of its foreign aid.
Japan extended an Official Development Assistance loan of 2.85 billion yen (about $18 million at current exchange rates) to the Indian government’s Narmada project in 1985, when the World Bank also approved $450 million in financing. Japan’s money, distributed through its own Overseas Economic Cooperation Fund, was earmarked for power generation equipment at the Sardar Sarovar Dam at the core of the project’s initial stage.
Three Japanese companies--Sumitomo Corp., Hitachi and Toshiba--have since been awarded a $183-million contract to supply six turbines for the dam. They are now hoping that additional Japanese loans will finance the entire transaction.
Foreign Minister Taro Nakayama, speaking Tuesday before a committee in Parliament, said no decision has been made on lending additional money for the project.