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A higher price for prestige

A higher price for prestige

After denying valid public concerns about its environmental and security risks, shipping minister T.R. Baalu will now face demands to revisit his very rationale for the Sethusamudram project. This time, it’s about official doubts of its economic benefit. A government-appointed panel has admitted to errors in calculating the savings to be made by ships circumnavigating India through waters around the controversial Adam’s Bridge.

As Mint reported on Saturday, the committee of eminent persons has raised two issues that ought to erode some of Baalu’s enormous public confidence so far—in insisting he would go ahead with the project—even in the face of ample expert opposition.

First, the committee’s report has pointed out several reasons why the time and distance saved will be less than estimated in the detailed project report. And these estimated savings are one of the two planks that Baalu uses while pushing the case for dredging and widening the channel.

Second, the panel has also recommended a special low-sulphur fuel so that the polluting impact by ships passing through the biosphere reserve in the region is minimized. Which is all very well—some concern for protecting the environment is most certainly welcome! But the significant fact here is that this low-sulphur fuel costs much more than the regular fuel used by ships on high seas—nearly twice the price—and will mean far higher costs for them. Now, fuel cost is the other economic benefit that’s been used by the shipping ministry to justify the estimated economic internal rate of return of the project.

The least one expects now is for the government to stop treating this as a prestige and political issue, and initiate a fresh assessment.

Such a re-evaluation would also have to note that even if the government accepts the panel’s suggestion for the costlier, cleaner fuel, it may have a tough time regulating such use. And even if it were to mandate this, how will it estimate how many ships would then prefer to use this route? For that, the savings from time and distance would need to be more than the additional fuel cost, at the very least.

So, either we bear this particular (acknowledged) environmental cost, or we end up with less than projected traffic, along with a higher risk of the projections going awry.

This time the ministry would also do well to minimize conflict of opinion by ensuring adequate transparency.

Should the Sethu project be re-evaluated now? Write to us at views@livemint.com

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