NGOs want World Bank out of Tata project

This comes days after IFC reported serious lapses in supervision of Rs 20,00 crore Ultra Mega Power Project

Over a hundred non-governmental organisations focused on environmental and social issues have demanded the World Bank withdraw assistance to a 4,000 Megawatt power project operated by Tata Power at Mundra in Gujarat.

This comes days after the Ombudsman for International Finance Corporation (IFC), the Washington-headquartered investment unit of the World Bank Group, reported serious lapses in the supervision of the Ultra Mega Power Project (UMPP). IFC is one of the lenders to the Rs 20,000 crore project. The Compliance Advisor Ombudsman (CAO) report was a response to a complaint by local fishermen on environmental and social impact of the project.

“Your endorsement of IFC’s response to CAO findings and thus letting IFC and the company continue the violations merits nothing less than condemnation,” National Alliance of People’s Movements (NAPM) said in an e-mail to World Bank President Jim Yong Kim. The e-mail, reviewed by Business Standard, was endorsed by 102 NGOs including Narmada Bachao Andolan, Mazdoor Kisan Shakti Sangathan and National Fishworkers’ Forum.

IFC has already refuted the charges levied by the Office of the CAO for the IFC and justified its actions and funding for the power plant. "CAO report reflects the observations on the internal processes of IFC and thus it will only be appropriate for IFC to respond. We are yet to read through the report and would discuss with IFC if there were any issues related to CGPL," Tata Power had said in a statement on 25 September.

The company had also added that the Association for Fish workers' Rights – the Machimar Adhikar Sangharsh Sangathan (MASS) -- has certain generic issues concerning the coastline of Gujarat, Mundra UMPP is just about 1% of Kutch coastline and that it is more than responsive in its association with the community around our project.

IFC has invested $450 million of its own capital in the Category-A project which signifies that according to IFC there are potentially significant adverse social and environmental impacts that may be diverse or irreversible. The IFC was also considering investing up to $50 million in equity as part of its exposure to the project and syndicating up to about $300 million in loans.

The complaint by MASS questioned the quality of the environmental and social impact assessment and the company‘s community consultation activities, the project‘s adherence to IFC‘s performance standards and its compliance with national legislation. The CAO found, in its audit initiated in August last year, that evidence validated the complaint.