Indian coal dream a nightmare for Bangladesh

Greig Aitken, BankTrack

Last month's signing of the contract to build the Rampal coal plant in Bangladesh, just a few miles from the edge of the world's largest mangrove forest, has re-triggered concerns both domestically and internationally about the controversial 1320 megawatt power project.

Late July saw clashes in the streets of Dhakabetween demonstrators intent on taking their demands to scrap the Rampal project direct to the office of Bangladesh's prime minister andpolice deploying batons and tear gas canisters. Local media reported the arrest of six protestors and the hospitalisation of 16 other participants as a result of the police operation, which prevented the ‘Save Sundarbans' demonstration from reaching its planned destination. Eyewitness accounts put the number of injured participants as high as 50.

Indian groups who also reject the project (see a new video presenting joint Bangladeshi-Indian civil society resistance to Rampal) condemned what they described as the use of "brute force" by the police against a "peaceful protest march", and issued a statement of solidarity which further called on the Bangladesh government to "stop using all undemocratic means to deal with legitimate people's protests."

Just two weeks prior, however, the official ‘mood music' emanating from a Dhaka hotel about the project might as well have come from another planet. At a ceremony to mark the signing of the engineering, procurement and construction contract awarded to Bharat Heavy Electricals Ltd (BHEL), India's largest engineering and manufacturing company, Ujjwal Kanti Bhattacharya, managing director of Bangladesh-India Friendship Power Company Limited (BIFPCL), the joint venture company undertaking the Rampal plant,commented to journalists that "We respect the concern of the people of Bangladesh, we are set to maintain the maximum environmental standards for the plant".

As tends to be the hallmark of such moments in the laboured development of controversial fossil fuel projects such as Rampal, the assembled officials had come to gush. With co-operation between Bangladesh and India being flagged relentlessly, the principal secretary to Bangladesh Prime Minister Sheikh Hasina let it be known that Rampal has been ‘a dream project' of the two countries' leaders, and promised "all sorts of cooperation will be provided to [BHEL] except time extension." BHEL now has until July 2019 to have the power plant installed and ready for operations.

Scrutiny of the construction contract does indeed suggest that the Indian giant BHEL is on the receiving end of an awful lot of  ‘co-operation'. Yet when viewed alongside other emerging project details that are now raining down as part of the official PR monsoon, it's becoming ever more apparent that if Rampal is a ‘dream project' for India, then as currently conceived it stands to become a nightmare for Bangladesh.

‘Sweeteners'

BHEL won the tender for the $1.49 billion construction contract at the beginning of this year but the official signing of the deal dragged on to July due to, as local media sources have pointed out, the company holding out for "extra sweeteners" from the Bangladesh government including exemptions from taxes and duties as well as from the mandatory insurance process. In what could be a worrying precedent for Bangladesh's state coffers when the involvement of Indian companies is sought for major infrastructure projects, it's also been reported that it took a personal intervention from Prime Minister Sheikk Hasina in April to settle the tax waiver in BHEL's favour.

Meanwhile, in another clear sign that Delhi is running the Rampal show and putting Indian interests first, negotiations are reportedly under way between the project promoters and Coal India on the supply of 4 million tonnes of Indian coal per year to fuel the plant.

If this materialises, then it would undermine some of the baseline calculations - on emissions and pollution - included in the project's already highly questionableenvironmental impact assessment (EIA), in which scenarios have been based on coal supplies originating from Australia, Indonesia or South Africa.

Indian coal is generally reckoned to be of a lower grade than coal from the other countries referred to in the EIA, but the potential impacts remain vague since precise details on sulphur and ash content are unknown. The mounting coal glut in India may, however, have an even bigger long-term outlet near the Sundarbans - as the controversy over the currently proposed plant rages, an often overlooked detail in the EIA is the alarming proposal to build a second 1320 megawatt coal plant adjacent to the first "in the future".

Some state (of the art)

Yet, insist Rampal proponents, the coal plant will involve the world's most efficient and environment-friendly technology. ‘Modern ultra-Super Thermal Technology' is touted by BIFPCL, but the company's construction tender document does not require state of the art pollution control technologies.

For example, the technology required at Rampal will emit nearly 30% more sulphur dioxide than truly state of the art technology. Similarly, the outdated technology required at the proposed coal plant can remove roughly 96% of fine particulate matter, but state of the art technology can remove 99%. Three percent might not seem like a lot, but when it comes to extremely toxic, long-lasting and widely dispersing heavy metals such as mercury emitted over the 60 year life of a coal plant, it matters.

Shockingly too there are no technologies required at Rampal to specifically eliminate harmful emissions of mercury, nitrogen oxides, nickel, chromium, arsenic, antimony, cadmium or cobalt, though widely available technologies exist to do so. Finally, toxic unburned coal particles from the massive coal piles and transfer points will enter the Passur River and Sundarbans ecosystem on a daily basis, as the tender documents require only ineffective water sprays on coal piles, and optional enclosure of stockpiles and transfer points.

And of the many question marks still hanging over the project's EIA considerations - including air pollution, direct impacts on water resources including heavy coal transportation traffic through the network of sensitive Sundarbans waterways and cumulative ecosystem impacts - poor planning for the disposal of 0.94 million tons of toxic coal ash per year is just one aspect of the project design attracting increased expert scepticism and concern.

 The proposed disposal of ash by lagooning and uncontained ‘land development' poses huge environmental risks in an area minimally above sea level, prone to seasonal flooding, typhoon-driven storm surges, tsunamis, and subject to - as the EIA does at least acknowledge - large seismic events up to 7.0 on the Richter scale. 

Escalating PR offensive

While many of the EIA's assumptions have been heavily criticised, it does at least admit to the possibility of project impacts arising: "dredging activities," it concedes for example, "may have impacts on river water quality." Any such precautionary language about the Rampal project, however, seems to have gone out the window as part of the promoters' escalating PR offensive.

On July 19, the day after a major splash in the Washington Post ("A new power plant could devastate the world's largest mangrove forest") increased international awareness of the long list of problems that Rampal is stacking up for the Sundarbans and its inhabitants, BIFPCL's Public Relations Manager Anwarul Azim hit back with a stunning run-through of positive bullet points about the project, leading him to the flourishing conclusion that the "Rampal Power Plant will not damage rather it will preserve the Sunderbans (sic)".

Before getting stuck into his version of project details, Azim points to energy generation from coal statistics from around the world (including USA 40%, Germany 41%, China 79%) and contrasts with Bangladesh's current 2.05% figure. No mention is made of international agreements to curb emissions, of efforts now materialising in these countries to drastically cut coal power emissions due to public health and climate crises, or of the rapid scaling up of renewable energy around the world. Yet Azim writes, "In order to accelerate the economic development of the country, it is the demand of time to increase the production of coal-based electricity at the present moment."

This narrow ‘demand of time' narrative also fails to mention the rapidly encroaching effects of climate change which Bangladesh, one of the most vulnerable countries on earth, is staring in the face, nor does it acknowledge Bangladesh's burgeoning solar power industry, with over 65,000 solar home systems being installed every month, making it the largest and fastest growing off-grid program in the world.

Nor is Azim detained by perhaps the easiest to grasp time calculation when it comes to clean versus dirty power generation: solar plants can be set up in slightly over a year, as opposed to the four to five years that coal plants take, thereby providing electricity very quickly to people who desperately need it, as in Bangladesh.

Just one example bullet point from the article illustrates the kind of glossing of project impacts that is now going on as the project promoters seek to navigate what could be their final, crucial administrative hurdle - clearance from Bangladesh's Ministry of Environment and Forest.

"A negligible amount of water (0.05% of the lean period flow) of [the Passur] River will be used," Azim writes. Yet the project's EIA acknowledges that water use at the plant will reduce the downstream flow of the Passur River by 4 million litres an hour, or 35 billion litres each year, which Bangladeshi NGOs point out is considerable in an ecosystem already stressed by increasing salinity and reduced freshwater flow from upstream diversions. The same river, one of the Sundarbans' key waterways, suffered the latest sinking of a large coal cargo vessel in March this year.

Project finance will involve reputational risk

Waiting in the wings too is India's Exim Bank, currently considering a $1.6 billion loan for the Rampal plant construction even if this will involve taking a ‘reputation risk', as the bank's head recently admitted. Over 135,000 people and 100 civil society groups have so far petitioned the head of India's Exim Bank not to finance the Rampal project.

Informed speculation suggests that Exim will only bankroll the project if agreement on the supply of Indian coal is reached. There are many reasons why, following global pressure from civil society, none of the other major international banks - which are still not averse to financing coal projects especially in the developing world - are prepared to touch Rampal.

Civil society groups in Bangladesh are also taking their concerns to the international stage. Last month 53 Bangladeshi groups, under the umbrella group National Committee to Save the Sundarbans, reiterated their concerns about Rampal to the United Nations's World Heritage Committee and IUCN. Over 50,000 people from around the world supported their petition.

Reputations, facts and one of the world's most prized natural assets are at the mercy of Indian coal dreams, and the Bangladesh government's capitulation is set to unleash a nightmare on its people and environment. The international community needs to stand with the resistance movement in Bangladesh and demand that India's Exim Bank abandons its financing plans for the construction of the reckless Rampal coal plant.

Action: Ask India's Exim to drop its financing plans for the Rampal construction.

Greig Aitken is a coal campaigner with BankTrack, a Netherlands-based campaign group tracking the operations and investments of private sector banks and their effect on people and the planet.