If India Is To Fight Corruption, the Focus Must Be on Dam Projects

While the dam breach in Madhya Pradesh's Karam river is a recent example of poor construction quality, the politician-contractor-engineer nexus in these projects has long been known.

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In his eighth Independence Day speech from the ramparts of the Red Fort on August 15, 2022, Indian Prime Minister Narendra Modi underlined the need to fight against corruption and nepotism. Highlighting the steps his government has taken to check corruption, Modi said:

“In the last eight years, we have been successful in working for the betterment of the country by saving two lakh crore rupees which used to go into the wrong hands, using all the modern systems like Direct Benefit Transfer, Aadhaar and Mobile. Those who fled the country after looting banks during the tenure of previous government, we have seized their property and are trying to get them back. Some have been forced to go behind the bars. We are trying to ensure that those who looted the country are compelled to return. Brothers and sisters, the corrupt are eating away the country like termites. I have to fight against it, intensify the fight and have to take it to a decisive point.”

However, during the speech, the prime minister did not speak about one sphere that remains dogged by corruption and scams – dams and hydroelectricity projects.

There are many examples to cite, but a recent case of corruption, which jeopardised the lives of people, is from the Bhartiya Janata Party (BJP)-ruled Madhya Pradesh. In August, the lives of over 10,000 people from 18 villages in the Dhar district of Madhya Pradesh were put in danger after a dam built on the Karam river could not withstand the massive rain in the region. Reacting to the development, the Shivraj Singh Chouhan government blacklisted two firms – Delhi-based ANS Construction and Gwalior’s Sarthi construction – for not completing the construction of the dam.

But why was the project given to ANS Construction, whose license was suspended and cancelled by the Madhya Pradesh government in 2016-17 because of indulging in corrupt means? The work on the dam was allotted to ANS at Rs 113 crore. The firm in turn hired Sarthi as a sub-contractor, at less than Rs 100 crore, to complete the work. This project was planned to provide water for irrigation and drinking to 52 villages, mostly inhabited by tribal communities. The dam has a catchment area of 342.50 square kilometres.

The Rs 113 crore dam is part of a larger irrigation plan whose total cost is Rs 304 crore.

Even before this instance, the Karam dam project was rife with accusations of corruption and scams. In 2021, the state government informed the assembly that the dam was one of the projects under investigation by the Economic Offence Wing because of corruption charges in the e-tender process.

A Congress party leader alleged that Sarthi construction is owned by a friend of a senior leader from the BJP. The Communist Party of India (Marxist) leader Jaswinder Singh alleged that after a scam was identified in the tender process, the Enforcement Directorate accused the company of paying Rs 93 crore as bribe money.

Water projects have been at the centre of corruption in India. Decades ago, in Bihar, the irrigation mafia was “nourished and institutionalised” mainly under Jagannath Mishra’s tenure as the chief minister of the state. The situation was such that, Jagdanand, the irrigation minister of Bihar during Lalu Prasad Yadav’s first term as CM, once said, “The waters of Kosi used to provide petrol for the 200-car-strong cavalcade of Mishra.

It is estimated that during those times, the Bihar government used to spend between Rs 250 and 300 crore annually on construction and repair work. Of the total, 60% was pocketed by the politician-contractor-engineer nexus. After doling out the fixed percentages of money, contractors took around 25% of the sanctioned amount. So there is little surprise that 30 years later, nothing much has changed. People still live in fear of annual floods, which affect around 8 million people in Bihar.

In 2020-21, Bihar allocated Rs 440 crore towards flood control programmes and Rs 1,353 crore for various irrigation projects. It remains to be seen if the situation will improve in the coming years.

A woman carrying fodder for cattle in a boat in a flooded area of Bihar. Photo: Manoj Singh

In Maharashtra, some activists who were fighting corruption in dam projects, revealed flaws in the tendering process in 2012. They found that costs were spiked manifold in the case of four dams: Kondhane (from initial Rs 56 crore to Rs 328 crore), Balganga (from Rs 420 crore to Rs 1,320 crore), Kalu (from Rs 640 crore to Rs 1400 crore) and Shai (from Rs 410 crore to Rs 1,139 crore). Then, in 2014, in a letter to the then chief minister of Maharashtra, Devendra Fadnavis, a Pune-based contractor revealed that almost 22% of dam costs are paid as bribes. Everyone – from a clerk to a politician – has a share in the bribe.

A grim situation across the world

Not only in India but across the world, dam building is dogged by corruption. In a paper, Benjamin K. Sovacool and Gotz Walter found that in Lesotho, Indonesia, Thailand and Kenya, dam builders used “corrupt practices” to capture reservoir sites preserved for indigenous people. The authors have also given some other examples where corrupt means have been used to swindle millions.

First, in China, government officials reportedly stole around $50 million of resettlement funds appropriated for the Three Gorges Dam. Second, costs for the Yacyretá Dam between Argentina and Paraguay increased by $2.7 billion, largely because of paid bribes and misappropriation of funds. Finally, in 2013, in Malaysia, a Norwegian company, Sarawak Energy, was accused of granting $220 million worth of hydropower contracts to companies controlled by the family of the chief minister of Sarawak, Taib Mahmud. He is considered by many as one of the most corrupt politicians in Asia.

To conclude, measures to tap corrupt means in awarding tenders, checking the raw materials used for building structures, and strict vigilance on misappropriating of funds allocated for resettlement and other works hugely depend on the political will of the government.

Amit Ranjan is a research fellow at the Institute of South Asian Studies, National University of Singapore. His forthcoming book is on inter-state water disputes in India. Views expressed in this article are personal.