A Slippery Road; the Case of the World Bank in Mizoram

Lalremlien Neitham, September 25, 2007

A four-day “Independent People’s Tribunal (IPT) on the World Bank Group in India” held at Jawaharlal Nehru University (JNU), New Delhi on 21-24 September, 2007 was attended by over 600 activists, students, academicians, policy analysts, lawyers and projects-affected communities across India who presented indicting evidence against the Bank in over 26 sectors.

The World Bank is an institution owned and directed by its 185 member countries. Each year, the WBG provides billions of dollars in loans, grants and other types of financial and technical assistance to governments and private companies in the developing world, including Asia. Its operations influence laws and regulations, government spending and private sector investment decisions in countries around the world.

The IPT is a result of a monitoring process by a large cross-section of researchers, activists and community representatives who have been putting together detailed studies of the impacts of the World Bank-funded programmes and projects in India. Apart from presentations given by leading activists and academicians from India and abroad, the Tribunal also heard testimonials from affected people of World Bank (WB) projects across India.

Two residents of Muallungthu village in Mizoram – Mrs. Lalhlimpuii and Mr. Lalramfawna, who are directly affected by a WB funded Road Project, also attended the Tribunal. Muallungthu is one of the villages where the WB funded-road project passes through. The road links more than 40 villages with Aizawl, the capital of the State and the main lifeline of these villagers.

Lalhlimpuii, a vegetable seller, gave her testimony on behalf of the project affected people. She related the woeful tale of hardships faced by the project-affected villagers who need to market their vegetables to meet their daily needs in the markets of Aizawl.

The WB approved the funding for the Mizoram State Roads Project on 14 March 2002. The project was estimated to cost 70 million US dollars. The International Development Association (IDA) provided a credit of 60 million US dollars and the Government of Mizoram (GoM), as the implementing agency, would meet the counterpart funding of 10 million US dollars by borrowing it from the Government of India (GoI). Till date, around 48 million US dollars has already been disbursed for the project. The WB claims that the project will improve road capacity, quality and safety through rehabilitation and maintenance.

The closing date (of all financial activities related to the project) of the WB funding for the Mizoram State Road Project is 31 December 2007. The financial terms and conditions for the financial credit is 35 years of maturity, including 10 years grace period. The WB’s credit to the GoI is at 0.5 percent interest and the GoI’s credit to the GoM is at 12 percent interest.

The WB also stated that “the project aims to expand or rehabilitate over 500 kilometers of the state’s core road network—around half of the state’s total core network. So far, around 210 km maintenance roads have been completed and opened to traffic, reducing travel time of about 50 percent. In addition, 42 percent of the core road network has been improved to good condition and maintenance backlog has decreased to 800 km from 1,000 km”.

However, the testimony narrated by Lalhlimpuii contradicts and speaks an opposite story of the Road project against the outrageous claims made by the WB. Lalhlimpuii recalled that they came to know of the WB-funded road project in 2000. She said that, “The whole stretch of this particular road, connecting Aizawl and Lunglei, which is around 185 kms was constructed during the British colonial rule. Before the involvement of the WB, the State’s PWD was responsible in looking after this road. As the road was narrow and its condition deteriorated by the years, we used to face lots of problems”.


She said that the poor condition of their road was one of the reasons why they were very happy when they were approached and told that the WB was going to construct a good and wider road for them, without knowing the destructive impact the project will bear on them. “During the inauguration of the Road project, Chief Minister Zoramthanga even promised that “the WB will be replacing the old run down road with a new road that will be smooth and sleek as a snake”, she added.

She further stated, “In 2000, Cochin-based Bangheertha Engineering Ltd. was given the contract to build the road and it began its work from April 2002. Due to rampant corruption and negligence of the work that resulted in the road condition becoming worse than before; Bagheeratha Engineering Ltd. was decontracted in 2005”. “But then, the authorities took a long time in selecting new contractors for the project, so the road deteriorated further”, she added.

On May 22, 2007, the WB again approved additional financing of the project of 18 million US dollars. The WB stated that, “The additional funding is due to higher costs of works and construction materials, beyond the control of the State Government”. Lalhlimpuii said that they were not even aware of the additional funding by the WB and came to know of the new funding only when they came to Delhi.

Concerned over the uncompleted project, student and youth groups such as the Mizo Zirlai Pawl (MZP), Young Mizo Association (YMA) branches and women group from the affected villages appealed the project director PWD SE Pu K Sawmvela and also submitted petitions to the CM and other authorities to resume the construction work as soon as possible. “Yet, all our prayers were never heard”, Lalhlimpuii said.


She also stated, “After destroying the previous road they ended up giving us a much worse road. The apathy of the authorities prompted the MZP to take up more serious actions. When the local MLA came to know of the decision of the MZP, he requested them not take up any action and promised to discuss the matter with the CM”.

“In Nov 2005, the Govt. announced that three new companies, Valicha, Tantia and Raitani were selected to resume the road construction work. However, the companies did not begin their work even by March 2006. The indifference of the Government to look into our plights caused anger and disappointment among the villagers. To protest the unresponsiveness, the MZP blocked the road in March 30, 2006. The police came and try to disperse the protesters and five MZP leaders were arrested and jailed. The next day on March 31, 2006, MZP had a meeting with Govt. officials, and the five arrested leaders were released and the Govt. promised to resume the road construction work by April 2006. We were also promised that the road construction work will be completed by June 2008”, she said.

Relating the plights of the affected communities, Lalhlimpuii says that, “As the monsoon arrived, the stretch of the abandoned road project has taken its toll and is full of potholes and mud. As a result, no vehicle wants to travel on the deteriorated road as the vehicles need to be repaired the next day and the vehicle owners have to spent lots of money to repair their vehicles. This further impacted in the increase of fares which creates more burdens to our limited income”.

“The process of widening the existing road also disturbed the terrain and fragile geology and increased more landslides in many places of the area. The landslides in turn resulted in the lost of many acres of cultivable lands which were not considered in the compensation packages”, she added.

The Environment Impact Assessment (EIA) of the project had forewarned that the slope cutting into the hillsides to increase the road width could lead to slope instability and that there could be an increase in landslides. The increase in landslides as testified by Lalhlimpuii also speaks the inefficiency in handling of the project work carried out by the WB and Government selected contractors. This questions the effectiveness of both the implementing agency and the funder of the project and their commitment for the welfare of the affected communities.

It should also be pointed out that the road project passes through cultivated and residential areas and compensation has already been given at the rate of Rs. 10 to Rs. 20 per square feet. The areas for compensation given were for the width of the proposed road and some of the villagers have even submitted their original land holding certificates to the “Government”.

Lamenting on the project’s affect on their livelihood, “In all the affected villages there are many women like me who earn our livelihood selling vegetables which we cultivate in our jhum or gathered in the nearby forest to the market in Aizawl. Nowadays we can hardly travel to Aizawl. Our livelihood has been disrupted”, Lalhlimpuii said.

Lalhlimpuii appraises the affected people’s fears that the Government will not live up to its promise again and that the “authorities” might simply stop the project and leave them with their devastated and horrible road. The GoM has also mentioned in its request for additional financing for the project that if the State does not get the additional funding, it will not be able to afford to self-finance it, and therefore, will not be able to complete the project. The GoM reasoned that increased costs in upgrading contracts, fuel costs, and construction costs as being the basis for the need to seek additional funding. Lalhlimpuii also mentioned that looking at the ground situation it would be unrealistic to believe that the GoM will be able to complete the project as promised, even with the additional funding.

Other concerning issues that need to be looked into is the relationship between the WB funded road project and India’s transnational trade policy and the WB’s objective and intervention in funding the project.

For 50-60 years the borders of North East (NE) has been ‘closed’ due to India’s historical and political reasons. Decades of ‘forced’ isolation from their kiths and kins in Burma (and other neighboring countries) has jeopardized the cultures, social relations, economy, politics, etc of not only Mizoram, but also the whole NE. It seems that now the GoI felt the urgent need to connect the isolated region but for some other underlying motives, which can only be devastating to the region.

While it is important to ‘renew’ relations with people in Burma and also to rekindle the cultural, economic and social relations, the fast-paced efforts to open borders by India through funding from WB and other international financial institutions is very suspicious. One reason would be that, more trade gateways through these new roads are meant for India’s trade with South East Asia (SEA) and China and vice versa. While ‘Indian’ products from the mainland might be able to compete with those from China and SEA countries, the current local economy in Mizoram, which is depending mostly on funds provided by the Central Government, will not be able to compete against it. The local economy needs to be strengthened if at all it is to participate in the global market. It will be a wonder whether WB has actually studied the local capacity to participate in international trade by which the local communities would actually profit from the international trade without it being engulfed by the new trade, which can create further complications on the livelihood of the local communities.

As seen from the border trades in Moreh (Manipur) and Champhai (Mizoram), though this will need further scrutiny, it can however be said that the local economy and institutions has adversely suffered due to dumping of cheap foreign goods where the control over trade items are not even at the hands of the local communities. Moreover, absolute dependency on border trade impacted the local economy where the absence of alternatives harmfully disturbs their livelihood. These impacts are felt when trade routes are closed. Furthermore, if the border trade routes are closed for a longer period, there is also a steep rise in the trade items prices.

What also needs to be taken into consideration is the origin of the exported items – whether they are of the local or from mainland India. While India has used the NE as a captive market all these decades, failing to build the NE economy steadily; opening unchecked Chinese and other foreign markets will be a doom for small communities in the NE. The WB also might not have taken this aspect into consideration, intentionally or unintentionally.

In addition, the border control mechanisms, like movement of people, taxes collection, etc will not accrue to the local Government and people. A more stronger and beneficial agreement for the local communities has to be in place before more trade routes are opened at other places.

It should also be noted that the main intention of the WB would not be to connect ‘un-connected villages’ in Mizoram, but instead on transnational trade routes for its bigger profiteering plans in the region. Therefore, it would not be mere speculation to wonder whether the Road Project would really serve the crucial interests of Mizoram and its people in the long run.