A $600 million (Rs2,802 crore) world bank loan for a 444MW hydropower project in Uttarakhand, which is being constructed by the state-owned Tehri Hydroelectric Development Corp. Ltd (THDC), may be in trouble following allegations over the manner in which it received environmental clearance, said a report in the Mint.

According to documents reviewed by Mint, the world bank has asked the Indian government to address allegations about improperly held public hearings for the clearance of the Vishnugad-Pipalkoti dam in Chamoli district. These allegations were sent to the bank in a letter from Vimalbhai, convenor of the Matu People’s Organization, a Delhi-based activist organization. The project is located on the Alaknanda, a Ganga tributary, and is expected to have four units of 111MW each.

In its letter, the activist organisation has alleged that public hearings for the clearance of the project were not in accordance with stipulations, and that the environmental clearance protocol was not followed.

According to the environmental impact assessment (EIA) notification of 1994, amended in 2006, project proponents first have to prepare a report. Copies of this are then to be distributed to the local administration and affected people. An EIA assesses the impact of a project on the environment. Public hearings are scheduled thereafter. The public hearing of grievances and discussions are noted and sent to the ministry of environment and forests (MoEF) for a final decision.

The activist body says there were several gaps in the process actually followed.

“At the first public hearing, no documents were disclosed,” said Vimalbhai. “Another hearing was held after protests but the same thing (happened).”

A world bank spokesperson in India told Mint that all procedures had been followed: “The wide dissemination was aimed at soliciting feedback on the specific environmental impacts identified in the EIA and on the mitigation measures being proposed. In keeping with world bank project preparation requirements, THDC invited the public at large, through newspaper inserts and press publications and via its website, to comment on the draft consolidated EIA/EMP, and to participate in a public stakeholders’ meeting, which took place in Pipalkoti on 13 September.”

R.S.T. Sai, chairman and managing director of THDC, insisted that “nothing wrong has been done”. “This is a project loan. We’re yet to enter into any negotiation. The exact details of the loans are yet to be finalized. We don’t know why they’re agitating and why it is coming at this moment. As far as we know, all procedures have been completed. If somebody makes an allegation, it’s for them to prove it. Various procedural steps and criteria laid down have been adhered to. We’ve to see what this fuss is all about”.

The world bank’s head office, however, responded to Vimalbhai’s letter by asking the finance ministry to “send...comments on submissions made in the email (from Vimalbhai) at the earliest.” It also said the “allegations are very serious” and that “the loan will be scheduled for board approval after issues on the project...are resolved.”

The spokesperson for the world bank in India, commenting on whether the protest would affect the project’s chances of receiving the loan, said: “The bank proceeds to support a project only after it has satisfied itself that all national and bank policy requirements have been met; adequate consultation and preparation has been done; and effective measures have been put into place to mitigate and manage project risks and any adverse impacts.”

These concerns have come at a time when there is already considerable scrutiny of hydro projects in the country due to environmental concerns. MoEF has recently spiked plans for two hydropower projects on river Bhagirathi, also located in Uttarakhand and a major tributary of the Ganga.

India has a hydropower generation capacity of 36,085MW and plans to add 15,627MW by 2012. Most hydro projects involve some amount of displacement of the local population.