“Last week an unlikely new tourist destination opened in Gujarat,†Hartosh Singh Bal wrote in The New York Times's Latitude blog. “Since Narendra Modi, the state's chief minister, proclaimed in a blog post, ‘Fantastic visual treat awaits you as Narmada Dam overflows!'†about 150,000 people went to watch the water flow over the partially completed Sardar Sarovar Dam on the Narmada river, he wrote.
“Although the dam may be a stunning visual spectacle, it's already a failure,' Mr. Bal wrote. In fact, he concludes, “What the tourists who gathered at the Sardar Sarovar Dam last week were looking at is not a technological marvel but an economic disaster.â€
When the dam was first planned, rates of return varying from 12 to 18 percent - well over the government of India's minimum criterion of 9 percent - were projected. But the actual rate of return will be far low er.
The official Web site for the project quantifies its benefits as totaling about $395 million a year, after factoring in expected increases in agricultural production, power generation and water supply.
The project - which is nowhere near complete - had already cost $5.7 billion as of March 2010. Of the total expenditure incurred by then about $2.36 billion has been spent on the irrigation network. Since only about 27 percent of the irrigation canal network has been completed, building the rest could require another $6.3 billion. This places the total cost of the project at $11 billion, meaning that the benefit of $395 million amounts to an annual return of a measly 3.6 percent - far below the minimum criterion.
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