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238 Minute by Birch

17 September 1952

Minute on Visit to Tungabhadra Project

From September 4th–8th I visited the Tungabhadra Irrigation-cum-Power Development Project on the border of Madras and Hyderabad States. I lived with Indian engineers on the dam-site, discussing their programmes and securing specifications which will be forwarded to Australia. As a result of my visit, I am convinced that the project is a good one and that Australia's Colombo Plan aid could appropriately be concentrated here each year.

The project is being financed jointly by the Madras and Hyderabad Governments. The dam itself is scheduled for completion by the end of 1953 and the irrigation canals by the end of 1957. 300,000 acres of land on the Madras side and 450,000 areas on the Hyderabad side will be under irrigation, and 30,000 K.W. in Madras and 80,000 K.W. in Hyderabad will be the ultimate power production.

I was taken on a thorough tour of inspection of the dam and the canals on both the Hyderabad and Madras sides, discussing the respective sections with the Chief Engineer, Mr. P. Papaiah, the Superintending Engineer of the Hyderabad Canals, Mr Iengar, the Superintending Engineers of the corresponding Madras sections, Mr. Ekambaram and Mr. Venkatraman. I was also able to get reasonably impartial points of view from two contractors, Mr. Wazir Chand Khanna of Prem Constructions and Mr. M.G. Lakshminarasu of the Deccan Construction Company.

I also travelled a good deal by car through the famine area which the irrigation canals will serve, noting the excellent red and black cotton soils and the splendid crops they produce where they are watered by ancient anicuts1.1 also spent some time in Mysore State where the development of cheap hydro-power has led to small-scale industrialisation and a consequent increase in the prosperity of that State.

These are my conclusions:

1. The planning of the dam is sound, foreign techniques in dam construction being closely followed. Every stage is carefully blueprinted.

2. The Madras section of the project is well catered for, both financially and by way of equipment of all kinds.

3. The Hyderabad section of the project is well catered for, both financially and by way of equipment of all kinds.

4. The Hyderabad section badly needs equipment, although in the next twelve months the greatest need is for earth-moving and concreting equipment for the canals, and hydroelectric equipment. The dam will soon be finished.

5. From discussions with the Australian Government Trade Commissioner, Bombay, it would seem that much of the project's requirements can be met by Australian manufactured goods.

In amplification of the above, the following points are relevant:

(a) In view of the age-old animosity between Madras and Hyderabad States, the acceptance of a joint project is, in itself, an achievement. The work was begun in 1945 and went ahead steadily on the Madras side. On the Hyderabad side, the 1947 riots, and the police action in 1949, caused a shortage of labour, supplies and funds. With a reduction of �3 million in the anticipated available funds, the Hyderabad engineers have been forced to curtain work on the canals and hydro-stations in order to keep pace with Madras on construction of the dam. It is now about 85% complete and Madras will install, at the end of the year, generators and turbines which have been ordered from Switzerland. Madras has also completed some 120 miles of canals. Hyderabad has excavated only 40 miles of canal, and has no prospect of installing a power house at the dam site, because of lack of funds.

(b) Hyderabad has been hampered by a lack of equipment where Madras has not. For instance there are no cranes, masonry being carried to the top of the dam by coolies and blasting holes dug by hand with a crow-bar. 75,000 is the total labour force on the project at present.

(c) Hyderabad secured a loan of �10 million for canal construction, anticipating an early return from the sale of water to return the loan. This has not been the case since the money had to be spent on the dam and compensation for peasants flooded out by the reservoir.

(d) In Hyderabad city I witnessed, particularly, ugly disturbances by Communist agitators who have a strong foothold in the State. The early development of cheap power and irrigation will do much to combat their influence.

(e) The Government of India has, according to Hyderabadis, persistently refused to vote additional funds to the State whose revenue has fallen below that expected when the Planning Commission drew up its schemes. There would be a tremendous amount of goodwill if Australia met some of the financial and equipment needs of Tungabhadras.

I would therefore suggest:

1. Australia should announce that counterpart funds derived from the sale of gift wheat to India will be loaned by the Central Government to the Hyderabad Government for expenditure on the Tungabhadra Project and suggest to the Government of India that part of Australia's Economic Development contribution each year will be committed for aid to Tungabhadra. (I am assured informally of support for this in the Ministry of Finance.)

2. Australia should indicate her readiness to provide Australian manufactured goods to India in 1952–53 to the value of �3.0 million (External Affairs estimate) of which �2 million would be earmarked for equipment for the Tungabhadra project.

3. The figure of �2 million is based on an honest and straightforward assessment by the Chief Engineer and his assistants (independently) that Hyderabad can spend in the next twelve months a little more than �1 million on canal construction and about �1 million hydro-electric plant. Workshop equipment, they admit, is not required. Earthmoving and concreting equipment is particularly short and Australian firms such as Massey Harris, International Harvester and Le Tourneau are eager to export it. The Hyderabad Public Works Minister asked me, if Australia could not assist both canal and hydro development, to press for aid to the canals first. On the hydro-electric side Australia could probably not provide big turbines, but 15-80 K.W. generators and light machinery are certainly available and, if nothing else, prefabricated steel pylons could probably be provided as equipment. (Again, I am assured informally of support in the Ministry of Finance for such an allocation of 1952–53 funds.

4. It would seem preferable for India to send a purchasing mission to Australia, as it did to Canada, to place orders for Tungabhadra against the fund of �2 million.

[NAA: A] 0299, C l3]

1 Anicuts are small to medium size dams.

Last Updated: 10 January 2017

Category: International relations

Topic: History