§ Mr. MeacherTo ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the World bank proposals for funding for the Sardar Sarovar Dam in India.
§ Mr. Lennox-BoydThe World Bank approved loans amounting to $450 million in 1985 as part of a $3 billion project in the Narmada valley in India. In June this year, the report of an independent review committee established by the bank was published. The design and implementation of the project, including the resettlement and rehabilitation, environmental and other aspects were criticised. On 23 October, the bank's board of directors agreed on balance that the best course of action was to continue with bank support for the project on the basis of an action programme with detailed targets, which has been agreed with the Indian authorities.
A further review will be carried out in April 1993 which will reconsider whether disbursements against the bank's loan can continue. The board welcomed the commitments made by the new Government in India and their considerable efforts to address the problems identified; but we made it clear that disbursements must be suspended in six months' time if real progress on resettlement and rehabilitation and environmental issues have not been made by that time.