The Real Cost of Power
Speaker: Leo Saldanha
Environment Support Group (ESG), Bangalore, India
Date: January 9, 2000, 4 PM Venue: MIT 4-237
Notes Author and Contact: Rajmohan Rajaraman

The talk was attended by about 25 persons. It ran for more than two and a half hours; there was a lot of interaction between the speaker and the audience. The following are notes and excerpts from the talk. The description is not chronological and surely omits a number of points that were raised both by the speaker and the audience.

Leo began by laying the background for the talk. Cogentrix, a company based in North Carolina, is considering setting up a coal-based power plant in the environmentally-sensitive area of Dakshina Kannada. Previously, they were thinking of putting it near Bangalore (which is where all the demand is), but then the proximity to the Arabian sea of the Dakshina Kannada region makes setting up the plant along the coast apparently more cost-effective for the company.

The impact of such a plant on the environment, according to Leo, is enormous, however. Dakshina Kannada is an environmentally fragile estuarine zone and is densely populated with agricultural and fishing communities. The water table in the Dakshina Kannada region is close to the ground. And the flyash that would be generated by the power plant is easily likely to mix with the water and would drastically affect the agricultural output in the region. This area is predominantly agricultural and, in fact, had been selected as the "most fertile" region in India for an earlier study conducted in collaboration with a Scandinavian company (govt.?) (Is this Denmark?). That study said that the region was very environmentally sensitive and, in some sense, advised not to set up plants of the nature that Cogentrix had planned.

Cogentrix, however, was granted permission to do so. Cogentrix itself does not have a strong record with regard to environmental friendliness. This was earlier established by the local communities of Mayaguez Bay of Puerto Rico, when they overthrew a Government, and the Cogentrix project they supported through corrupt practices, by electing one of the movement leaders to power. (The ESG website indicates another misadventure with the Tennessee Valley Authority.)

While approving the project, the proper procedures as outlined by the Environmental Board (or the equivalent entity) were not followed. Leo went through the environmental impact evaluation process carefully using slides that contained flowcharts describing the various components and the time-windows these components take. He pointed out the various places where the rules were compromised. (As an aside, he mentioned that while the process laid down by the environmental board has its flaws, there is a proper procedure long with rules and regulations in place, and these are meant to be followed.) As an illustration of how the rules were compromised, Leo considered the "public hearing" requirement. A No Objection Certificate (NOC) was issued by the KSPCB (Karnataka State Pollution Control Board) subject to a public hearing that was scheduled on August 12, 1995. This hearing has not taken place till date. A so-called "public hearing" was organized by simply inviting a "favorable" environmental "expert", and some Lions club and Rotary club members. On the other hand, the process requires at least two mediapersons, one of which must be from the vernacular media.

Even after the controversial environmental clearance granted by the Devegowda government, Cogentrix was expected to submit a comprehensive Environment Impact Assessment (EIA) of the project by June 1997. This has not been done to this day. Leo mentioned that Ron Somers, Managing Director of Mangalore Power Company (the Cogentrix lead joint venture in India), claimed in his secret letter to the Member Secretary of the Karnataka State Pollution Control Board, made public by ESG, that he will initiate an EIA only when the land is given to him!

The economic benefits of the project, from the consumers' point of view, were also unclear. At the projected rate, small scale industries in the area could not afford it. Only the urban population can benefit at the expense of the rural. The petition against the Cogentrix project was led by the Janajagriti Samithi. The Samithi (in their petition) and the ESG (in supporting this cause) made their arguments against the project on these grounds:

• the economic benefits of the project have been grossly exaggerated to the benefit of the investors,
• the debilitating environmental impact, the damage the project would cause to the local marine, estuarine, agricultural and forest ecosystems, and the adverse impact on the local communities through displacement or pollution would be too severe, and
• the process to be followed to get a clearance from the Environmental Board was totally disregarded. While making the argument, ESP made their case primarily through documents procured from the government itself.

The tactic of ESG was to work with the local people and convince them to take action through their Panchayat and legislature representatives. And to constantly bring this issue up with the press -- both newspaper and television. The strong community action against the project has brought to attention corruption charges against several politicians including the former Prime Minister of India, Mr. Devegowda. It was publicly expected that the new BJP led coalition Government at the Centre would set the record straight on the project. But instead, the Government has promised a financial counter-guarantee to the project if the Supreme Court clears it of corruption charges, disregarding other serious concerns such as the project cost and the grossly over-rated power tariffs. Further, the Ministry of Environment has failed to comply with the environmental review of the project ordered by the High Court of Karnataka the deadline for which expired during November 1997.

Inspite of all these hurdles, it seems that the strong community action has achieved something. Even after the ruling that Cogentrix can continue with its power plant construction was approved by the courts -- both the State High Court and the Supreme Court -- the Karnataka Cabinet and Legislature have recently indicated that they may scrap the project. This is a recent development, and to the best of the notes-taker's understanding, the outcome is still not clear. Leo felt that there is a possibility of a sad twist to this seemingly positive result. It seems that the government might just invite some other power project -- e.g., Enron -- to take the place of Cogentrix.

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