Handidhua, August 16: World Bank officials took a Hippocratic oath when they agreed in 1997 to lend India more than a half-billion dollars to mine coal. Above all, the bank officials swore to themselves, the project would do no harm.Since then, Coal India Ltd has reaped big benefits from the bank's money.The giant state-owned company says it has grown more efficient, moreproductive and more profitable. But the same can't be said for thousands of villagers, whose farms and homes in east and central India are being swallowed up by the mines financed by the World Bank.Gobinda Dehury and his wife Pankajini watched their entire village ofBalanda demolished last year by bulldozers. Now they live with theirtwo-year-old son in a spartan house here in the `resettlement colony' ofHandidhua, a ghost town where the water taps have no drinkable water, theshopping centre has no shops and the community centre no community.``I'd have rather stayed in the village,'' Dehury says. ``Everything was there: water, electricity, coal.''World Bank officials concede that, once again, one of their massive ThirdWorld investments has exacted a severe toll on citizens whose livesultimately were supposed to have been made better by economic development.``We thought we could make a real difference in this project,'' says EdwinLim, the bank's director for India. ``We've been disappointed with theproject on a number of fronts.'' One of the biggest disappointments, bankofficials admit, is they failed to honor their do-no-harm pledge.What went wrong? From the start, bank officials acknowledge, they knewthey were rolling the dice by lending India $530 million to start, expandor modernise two-dozen open-pit coal mines. The project would requirelarge peasant resettlements of the sort caused by many past bank-financedinfrastructure projects in developing countries. The record of suchtraumatic dislocations is riddled with failures.Still, bank officials continue to see the big projects as necessary fornurturing fragile economies. ``These are the bread and butter of the bankhistorically,'' and it doesn't intend to back away from them, says Lim,who is 59 years old and has been with the institution for nearly threedecades.The lengthy loan agreement reached with Coal India in 1997 called on thecompany to make whole all of the villagers it would displace, with bankrepresentatives from New Delhi and Washington making periodic monitoringvisits. In late 1997, a bank inspection team discovered in the stateof Bihar that many peasants were resisting resettlement or flounderingonce they lost their farms.Coal India has offered farm families varying sums, depending on the valueof lost acreage and homes. In Darliparli, residents report being offered$270 an acre. A few hours away, Jallia Gornaik says he received $570 foreach of his three acres of rice paddy in the village of Anantaberini, plus$4,550 for his house. Faced with widespread resistance from othervillagers, the company recently began offering $1,140 to those familieswho head off on their own.Residents of the village of Balanda objected that these amounts were puny.They tried a lawsuit and then civil disobedience. But eventually thebulldozers arrived under police protection and leveled everything.Hundreds of Balanda families were told last year to move to the Handidhuaresettlement colony, which boasts 321 tiny homesites. Only 11 familieshave arrived at the expanse in impoverished Orissa, where unfiltered bilgewater from the coal pits is pumped in a few hours each day for bathing andwashing. The coal company promised to provide drinking water, but so farhasn't.Meanwhile, Coal lndia has improved its earnings. Fuelled by the WorldBank's millions, the company says its new excavators are tearing recordamounts of coal from the ground to feed the Indian economy. Modernisedequipment and other improvements are allowing each miner to produce 21 percent more per shift than he did just four years ago, the company says.Their patience wearing thin, company officials put most of the blame onthe villagers. ``Nobody wants to be resettled, not even from hell toheaven,'' says Shashi Kumar, Coal India's engineer charged with carrying out the bank's social dictates. ``We genuinely want to help, but somehow - due to lack of will on their part and sometimes due to lack of care on our part- things aren't working out the way we want.''Beyond moving villagers to make way for mines, Coal India was supposed toguide peasants towards new means of making a living. The bank's inspectorsfound this effort succeeding only sporadically.Coal India executives now say that expectation was unrealistic. Manypeasants, particularly the women, have turned out not to want to startbusinesses, or are just too lazy, company officials say. ``To convert aperson from a villager without any trade in his hand, give him training. and turn him into an entrepreneur - there's no place in the worldthat has taken place in less than a decade,'' says Mahanadi Coalfields'schairman, S.N. Sharma.Bank officials carried out six supervisory visits in 1999 and this year.Each tour led to a stern letter to Coal India about the slow progress indealing with the woes of resettled villagers. By this spring, frustrationhad mounted on both sides, as the bank's warnings started to sound morelike ultimatums. In April, protesters descended on the bank's Washingtonheadquarters, although officials say the noisy demonstrations didn'taffect their thinking about the Coal India situation.Last month, the Indians took the face-saving step of requesting that theloan be cancelled, with only half of the $530 million doled out. The bankquickly assented - the second time in three years one of its loans toIndia has been derailed. Such drastic moves are relatively unusual.(By arrangement with The Wall Street Journal)
