A Stakeholder Model for Effective Water Resource Project Management

This report explores the application of the stakeholder model to water resource development projects, addressing issues like time and cost overruns and the neglect of less-vocal stakeholders. It proposes a three-tier approach to identify and classify stakeholders into an eight-fold classification, exemplified by the Sardar Sarovar Project. The report suggests a four-level stakeholder relationship model, aiming for an 'engaged' level to create synergy and optimize stakeholder value. It introduces a 'comparative measure' approach for evaluating stakeholder value, emphasizing moral reasoning and rational valuation of emotions and conditions. The implications of the stakeholder model include its role in sensing, scanning, signaling, and strategizing, as well as its utility in investigation, redressal, and management of stakeholder issues, ultimately contributing to balanced and sustainable water resource development.

The Stakeholder Model for
Water Resource Projects
The water resource development projects in India have been facing problems due to
immense time and cost overruns. There is also the risk of taking a skewed path whe
planners and policy makers tend to ignore the existence of less-vocal and non-vocal
entities. This could be due to a lack of a proper framework for understanding the na
and dimensions of the competing, conflicting, and varied demands both by the adve
affected and the beneficiary entities. This calls for identifying various stakeholders o
water resource projects so as to develop a stakeholder’s model which is expected to
only help categorize the stakeholders along the lines of beneficial and adverse effec
also to gauge their capacity to influence change in the course of the projects.
The stakeholders can be defined as individuals or group of entities who may be
affected by the water resource project during its conception, construction, and opera
who, in turn, may also influence the future course of the project. For identifying the
stakeholders, this paper proposes a three-tier approach leading to an eight-fold clas
cation of stakeholders.
As exemplified by the Sardar Sarovar Project, the identified classes of stakeholde
can be structured into a model indicating their octagonal congregate of influences a
the networked effect on the water resource project. Since stakeholders are importan
social and economic assets for public good, the best recourse is to create a win-win
situation for all of them or work out a balance in relationships with its diverse consti
for optimum realization of stakeholder value. With these objectives in view, this pap
suggests a four-level stakeholder relationship model incorporating levels of: (i) unin-
formed, (ii) compliant, (iii) responsive, (iv) engaged. On attaining the highest ‘engag
level, the project is able to create synergy among all elements of its relationship net
so as to realize optimum stakeholder value.
The measurement of stakeholder value is of immense importance for understand
and responding to shifts in stakeholder expectations and reactions. The propo
‘comparative measure’ approach for evaluating stakeholder value has the advantag
being discernible, forward-looking, and capable of eliminating the element of percep
tion in measurement by taking a comparative (rather than absolute) measure
impact on beneficiary and adversely affected groups of stakeholders. This approach
requires moral reasoning, involving a rational valuation of emotions (joy or grief) in
of social stakeholders, and conditions (favourable or unfavourable) in case of non-so
stakeholders, as epitomized by the factual illustration of a decision related to the he
of the Sardar Sarovar Dam.
The implications of the stakeholder model are as follows:
It serves the ‘4S’ management functions of Sensing, Scanning, Signalling, and
Strategizing.
It can be used as a powerful tool for investigation, prognostication, redressal, an
management of stakeholder issues.
It can also be aptly used for guiding the continuous process of national water
resource reforms with an aim to achieve balanced and sustainable developme
with minimum conflicts.
To conclude, water resource projects would ultimately help maximize societal we
fare and improve the governance system besides becoming stakeholder responsive.
KEY WORDS
Stakeholder Model
Project Management
Water Resource Management
Governance System
Executive Summary
G C Maheshwari and B Ravi Kumar Pillai
presents articles focusing on managerial
applications of management practices,
theories, and concepts
I N T E R F A C E S
VIKALPA • VOLUME 29 • NO 1 • JANUARY - MARCH 2004 63

India has witnessed a dramatic rise in water-related
problems leading to the present crisis with ever
increasing intensity of conflicts amongst various
users of water. Some of the recent conflicts (e.g., water
sharing dispute on river Cauvery) also bring into focus
the manner in which activism by a few people can
complicate the matter to unmanageable proportions.
They also highlight the fact that the nation realizes the
gravity of the crisis only after it reaches a precarious
state. However, this situation could lead to future water
resource development taking up a skewed path where
policy makers and water resource planners of the nation
may tend to ignore the existence of less-vocal and non-
vocal entities. Despite the country’s enormous experi-
ence in developing a good number of large projects,
almost every present-day project is faced with a fire-
fighting situation causing immense time and cost
overruns besides putting considerable pressure on the
national resources. This, to our mind, is due to lack of
a proper framework for understanding the nature and
dimensions of the competing, conflicting, and varied
demands, both by the adversely affected and the ben-
eficiary constituents as a result of the water resource
sector remaining in the control of the government.
At a time when the central government, many state
governments, the apex judiciary, and most of the polit-
ical parties are at the threshold of formulating new
perspectives and taking measures to meet the challenges
posed by the present situation, the totality of the picture,
the attendant issues or even the parties involved are not
clearly known. This calls for identifying various stake-
holders of water resource projects and recognizing their
concerns for and against the projects. It is with this
objective of charting out a balanced and sustainable
water resource development plan for the country that
we attempt to develop in this paper an appropriate
stakeholder model applicable for water resource projects
calling for innovations in the system of governance.
STAKEHOLDERS OF WATER RESOURCE
PROJECTS
It is a paradox that despite the widely accepted social
domain status of water resource development in India,
the ardent supporters of social welfare economics have
only been opposing the water resource projects. It is also
ironical that the critical issues facing the water resource
projects often assume unmanageable proportions be-
cause of the overstated socio-economic objectives.
Though application of tools and philosophies of main-
stream economics is also attempted in selective in-
stances, they mostly go in vain because of an insufficient
understanding of the project intent. This management
dilemma can be overcome only by a clear understanding
of the vital differences amongst stakeholders of water
resource projects and business enterprises.
Who are Stakeholders?
The stakeholders of water resource projects would
include individuals or group of entities who may be
affected by the water resource project during its concep-
tion, construction, and operation and who, in turn, may
also influence the future course of the project. Unlike
business concerns, both social and ecological elements
are always a part of the direct action environment of
water resource projects. Thus, human as well as non-
human entities are called stakeholders of a water re-
source project if the quality of their existence is affected
by the construction and/or operation of the project. Even
non-living entities such as topographical or archaeologi-
cal elements of an affected place can become stakeholders
of the project because of their silent capacity to arouse
human action.
The effect of the project on the quality of existence
of stakeholders may be limited to the dimension of
economic rejuvenation or repression or may have other
dimensions such as affecting stakeholders’ natural habitat
or their social and cultural milieu and, in some cases,
may even jeopardize the very existence of the entities.
While the consequences of the project may be visible on
some entities during or immediately after the com-
mencement of project construction, on others, they may
become visible only after a considerably long time. The
comparative measure of the stakes will also depend
upon varying perceptions of different stakeholders.
However, the degree of return influence may not be in
proportion to the measure of stakes involved owing to
dissimilarity in stakeholders’ capabilities in bringing a
tangible or intangible influence on project activities.
Water as a ‘Social Good’ and ‘Social Investmen
Water is generally considered as a ‘social good’ having
significant spillover benefits or costs (Gleick et al., 2002).
It is essential for life and health and also has cultural
and religious significance especially in India where
rivers are considered sacred. Because of these reasons
and the fact that India is largely dependent on agricul-
64 THE STAKEHOLDER MODEL FOR WATER RESOURCE PROJECTS

ture for its economic growth, government bodies alone
regulate the water resource projects in India. These
projects are essentially constructed and operated with
the intention of bringing economic and social develop-
ments in certain areas or to a certain set of people rather
than imparting profits to the owners of the projects.
Thus, construction or subsequent operation of water
resource projects cannot be construed as profit-oriented;
rather, it is for maximization of social welfare.
Often, with a view to emphasize efficiency in use
of water, economic tools and principles are applied on
water, but with sub-optimal results. The International
Conference on Water and Environment (1992) held at
Dublin concluded that water has an economic value in
all its competing uses and should be recognized as an
economic good. The application of this concept will
mean that a given amount of water shall be allocated
across competing uses in such a way that the net value
of water resources is maximized. But, this approach
cannot be applied in a mathematical sense because there
are several benefits of water that would defy economic
measurement.Thus, despite the economic elements
being present in water, it may not be fully definable as
an ‘economic good.’ To a limited extent, as in the case
of bottled mineral water — usually consumed by upper
income group people — water may be treated as a
commodity and thus subjected to the market forces.
Also, full or partial privatization of water supply projects
is possible and is even being resorted to in some parts
of the world. But, such efforts are fraught with heavy
risks to both humans and the environment as this can
lead to situations of business people overlooking water
as the basic need for survival of the mankind and
ecosystem. Water may have economic value but it also
has social, cultural, and ecological values that cannot be
entirely realized and taken care of by the market forces.
Water projects are taken up with huge investments
and the natural constraints like topography, geology,
hydrology, etc. may not allow for splitting up of a project
into many smaller investment projects to suit private
participation. Such projects as hitherto envisaged and
implemented in public domain are not always financial-
ly viable and may not be attractive for private sector
participation (Maheshwari and Pillai, 2001). Further,
due to the social and political implications of such
projects, community level efforts are being resorted to
instead of privatization.
Compared to normal business organizations, water
resource projects bring about far more intense social,
economical, and environmental changes and political
pay-offs. These changes, with negative (to some) as well
as positive (to others) consequences, span over much
larger areas and affect a much larger population of
stakeholders. From the human stakeholders’ point of
view, generally, the number of beneficiary stakeholders
surpasses the number of adversely affected stakehold-
ers; however, this assessment of beneficiary and ad-
versely affected stakeholders may not hold good for non-
human stakeholders or for the total stakeholders’ spec-
trum. Compared to commercial organizations, changes
brought about by the water resource projects are long-
lasting and dynamic. The duration of changes may range
from a few years to several decades affecting different
sets of entities at different points of time, and may even
affect the same entities differently at different time
spans. For instance, in the initial years of a construction
project, water may submerge several thousand hectares
of land, affecting a large set of stakeholders (people, flora
and fauna) adversely. Decades later, it may benefit a
larger but different set of stakeholders by providing
them the much needed water. Sometimes, with pro-
longed use of irrigation, the beneficiary areas may get
waterlogged causing adverse affects. The consequences
on the non-living entities such as geology, topology or
atmospheremay vary from small to large at times
causing permanent and irrevocable environmental
changes.
The water resource projects also differ in terms of
strong influences brought about by the stakeholders. In
the case of human and non-human entities, concerns are
voiced by the socially-responsiveand environment-
responsive groups. Moreover, the response of different
sets of people varies considerably over time. Project
oustees who are hyperactive during the construction
stage of the project may cease to be active during its
operational stage, while people at the tail end of the
command area may not show any concern during the
construction or initial stages of the project, but may
become most vocal at the operational stage. Because of
the larger time span and possibilities for change in the
scope of the project, people originally classified as
affected may not actually get affected while others, not
originally in the spectrum of benefits or loss, may
eventually get affected. Time-related attitudinal change
is also possible for other reasons; for instance, the people
adversely affected by submergence of their land may
VIKALPA • VOLUME 29 • NO 1 • JANUARY - MARCH 2004 65

later get rehabilitated in the command area of the project
thereby making them beneficiaries of the project.
The business enterprisesare, to a large extent,
shielded against direct public or political pressures. The
roles of external stakeholders are generally demanding
in nature while the management plays a reactive role
after a careful examination of the stakeholders’ demands
vis-à-vis organization’s immediate objectives and long-
term mission. In contrast to this, the management of a
water resource project is open to direct public influence
— generally brought through a capricious political
response for want of clientele effect — allowing for
prejudicial dilution of project objectives and mission.
Since a large number of people are affected by even small
scale changes in the scope of such projects, the political
forces play a vital role in influencing decisions related
to them. These decisions have significant financial and
economic outcomes and heighten the role played by
politically active interest groups, exacerbated by the
media to a much larger proportion.
THE STAKEHOLDER MODEL
It is against this background that we attempt to develop
a proper model that will permit identification, classifi-
cation, and understanding of the whole spectrum of
stakeholders and imparting efficacy to the management
system.
IdentifyingStakeholders
The stakeholders of business concerns are identified
under two broad categories, viz., internal and external,
because of the highly competitive environment in which
internal stakeholders present a monolith front to counter
the challenges posed by numerous divergent external
stakeholders. But, this approach is highly unsuitable for
identifying stakeholders of water resource projects for
the reason that the internal stakeholders are generally
a part of the government (as policy makers, planners or
project executors) and their existence is not critically
linked with the success of the project. A plethora of
departments and ministries may not present a monolith
front (especially in case of multi-state projects) for
reasons of well established principles of accountability
and thus the notion of internal stakeholders may not be
as crucial as in the case of business organizations.
Moreover, identifying the large and influential segment
of the external environment as mere external stakeholders
may reduce the significance of some of the diverse, but
consequential, stakeholder groups.
What are the other ways of identifying the stake-
holders of water resource projects? One of the approach-
es could be the biological and physical differentiation
of stakeholders along the lines of living and non-living,
human and non-human, urban and rural, etc. Another
approach could be in terms of project outcomes on the
stakeholders with economic, social, cultural or environ-
mental dimensions. Yet another approach is possible
according to the timing of impact (i.e. immediate or
later), extent of impact (severe vs. marginal), or the
stakeholders’capacity to voice response to changes
caused by the project. As no single approach for iden-
tifying the stakeholders of water resource projects is
capable of permitting full understanding of the various
issues of project construction and operation, we propose
a three-tier approach.
Stakeholders may be identified as beneficiaries and
adversely affected groups. This division, though com-
prehensive in terms of the nature of project’s effect on
stakeholders is too broad and leaves out the inherent
characteristicsof stakeholdersand their capacity to
respond to the project effects. Hence, this needs further
sub-classification as social and non-social groups de-
pending upon the presence or absence of social relation-
ship between stakeholders and the project. People af-
fected by the project are social stakeholders because
their interests are linked with the project through social
interaction;on the other hand, the affected natural
elements, non-human species, and the future human
generation — unable to forge social relationship with
the project — are examples of non-social stakeholders
(Wheeler and Sillanpaa, 1997). Thus, the second tier of
identification process leads to classification of stake-
holders as:
social beneficiary group
non-social beneficiary group
social adversely affected group
non-social adversely affected group.
So far, the identification has been confined to
stakeholders who are directly affected by the project.
Project effects on indirect stakeholders arise due to their
proximity — resulting from social, environmental or
economic ties — with the directly affected groups and
they also bring influences on the project. The directly
and indirectly affected stakeholders are classified as
primary and secondary sub-groups respectively. The
third tier of identification process, thus, leads to an eight-
66 THE STAKEHOLDER MODEL FOR WATER RESOURCE PROJECTS

fold classification of stakeholders as follows:
• primary social beneficiary group
• secondary social beneficiary group
• primary non-social beneficiary group
• secondary non-social beneficiary group
• primary social adversely affected group
• secondary social adversely affected group
• primary non-social adversely affected group
• secondary non-social adversely affected group.
Figure 1 demonstrates the three-tier identification
approach leading to a comprehensive eight-fold classi-
fication of the water resource project stakeholders.
Besides delineating unique properties of each group, the
suggested approach also enables generation of class-
specific information and the design of managerial strat-
egy for a meaningful response.Thus, the identified
stakeholder categories represent diverse interest groups
though, in some cases, the demarcation may not neces-
sarily be water-tight. Nevertheless,in a majority of
cases, the identified key categories of stakeholders have
distinct attributes which are briefly discussed below:
Primary Social Beneficiary (PSB) Stakeholders
With the command of the project extending over vast
areas, millions of people become primary social benefi-
ciaries of the project. In water scarce areas, the cost of
water from alternative sources is often prohibitive for
the poorer segment of the society while the tariff for
drinking or irrigation water from water resource projects
is kept low so that all segments of the society are
benefited from it. Even in places where groundwater is
traditionally used for irrigation, the investment and
recurring cost of pumping out water from the continu-
ously depleting groundwater reserves is affecting the
poorer farmers more. The water resource projects thus
bring immense relief to the economically challenged
sections of the society, particularly to women who at
times have to fetch potable water from long distances.
As such, the irrigation facilities help all farmers of the
command area to increase the rotation of crops and also
get more yields per rotation with the assured and timely
supply of water, thus bringing them economic prosper-
ity. People in the urban command areas are also directly
benefited because of the municipal and industrial water
supplies from the project.
Yet another set of people who are directly associated
with construction, operation, and maintenance of water
resource projects — representing disciplines like engi-
neering, revenue, geology, survey, public health, agri-
culture, quality control, accounts, vigilance, general
administration etc., and forming a mix of technocrats
and bureaucrats — also constitute the PSB stakeholders.
The people in this group also have significant stakes
such as deriving job satisfaction, status, career progres-
sion, and certain perks. Because of the vast scope of
construction and maintenance works, several contrac-
tors and supply agencies associated with the project are
also part of the PSB stakeholders.
The state governments, being owners of the water
resource projects, are PSB stakeholders. In case of multi-
state projects, the governments of other beneficiary
states also become part of the PSB stakeholder group.
Considering that the projects require huge finances, the
central government, developmental agencies (IMF, World
Bank, UNDP, etc.), and other financial institutions
F i g u r e1 : T h r e e - t i e rI d e n t i f i c a t i o nP r o c e s sf o rS t a k e h o l d e r so f W a t e rR e s o u r c eProjects
W a t e rR e s o u r c eProject
Stakeholders
Beneficiary
E n t i t i e si n project’s
c o m m a n darea
A d v e r s e l yAffected
E n t i t i e si n project’s
s u b m e r g e n c earea
Social
P e o p l ei n c o m m a n darea
Non-social
F l o r aa n df a u n ain
c o m m a n darea
Social
P e o p l ei n submergence
area
Non-social
F l o r aa n df a u n ain
s u b m e r g e n c earea
Primary
Farmers
Secondary
A g r oindustry
Primary
Cattle
population
Secondary
D a i r yindustry
Primary
Project
oustees
Secondary
N G O sfor
oustees
Primary
Endangered
species
Secondary
Environmentalists
VIKALPA • VOLUME 29 • NO 1 • JANUARY - MARCH 2004 67

(ICICI, IDBI, etc.), which agree to provide or help raise
funds, also form a part of the PSB stakeholders’ group.
Secondary Social Beneficiary (SSB) Stakeholders
People who are indirectly concerned with the benefits
of construction and operation of the water resource
projects belong to the SSB stakeholder class. Agricul-
tural growth also spurs economic prosperity of farm
labourers, craftsmen, and traders, besides encouraging
agro-product industries in the command area of the
project. Growth of cities in the command area and
commercial activities like tourism also flourish with the
development of water resource projects. Such projects
usually come up in remote and economically backward
regions and thus give tremendous boost to the infra-
structure development of that area bringing large-scale
economic development.
Being large-scale infrastructure projects involving
heavy investment, they have huge capacities to generate
demand for construction material (cement, steel, chem-
icals etc.), equipment (excavators, bulldozers, hoists,
cranes, concrete mixers, pavers, generators,pumps,
drilling equipment etc.), fabricators, bankers, consult-
ants, designers, and other support services. Because of
the projects’ potential to give employment to millions
of people and opportunities to thousands of entrepre-
neurs, people affiliated to labour unions and political
parties (with capacity to influence manpower recruit-
ment and works/supply contracts) also get interested
in these projects. Since technology and equipment are
often imported from the developed countries, the gov-
ernments of such countries also take interest in these
projects. All these entities constitute the group of SSB
stakeholders.
Generally, infrastructure projects positively impact
a nation’s economic growth which is indicated by the
quantitative economic change, usually measured as
increase in per capita income or output. Investment in
water resource projects is intended not only for present
consumption but also for production of other goods
through agriculture (e.g. food and non-food crops and
several agro-products)and power (whole industrial
sector), and hence is a factor of output growth. Since
progress in the agricultural sector is a pre-condition for
stimulating growth in the modern sector1 in developing
countries, the water resource projects play a vital role
in the economic development of India. Thus, the central
government, its numerous ministries, departments,
institutions, and the Planning Commission which advo-
cate the cause of water resource projects form a part of
SSB shareholders. Similarly, the NGOs working for the
upliftment of rural populace, social and cultural welfare
societies, agricultural and dairy promotional agencies,
public health departments, and the national level indus-
trial and trade bodies, etc. who express their concern for
the successful completion and operation of the water
resource projects fall under the same category.
Primary Non-social Beneficiary (PNB) Stakeholde
The ecology of the area that is fed with water from the
projects gets immensely benefited. The irrigation water
not only brings greenery to the farmers’ fields but also
enhances the vegetation cover over the whole terrain.
As is seen from past experiences (e.g., Indira Gandhi
Canal Project in Rajasthan), most of the time, the projects
turn an otherwise barren land into a land full of crops,
cattle fodder, and fruit-bearing and woody trees. Besides
flora, irrigation projects also benefit the fauna in com-
mand areas. Many kinds of insects, reptiles, and birds
not only enjoy a conducive environment but also con-
tribute towards development of food chain which is
basic for their natural existence. Cattle population, wild
life, and bird sanctuaries are benefited by the newly
augmented supply of water and fodder in the command
areas. All such entities of the command area constitute
the PNB stakeholder group. With accruing benefits, the
economic and social life styles of people in the command
areas may go through a sea change which, in turn, in-
fluence the lives of their children as well; thus, the future
generation of command areas is also a part of PNB
stakeholders.
Since command areas extend from a few thousand
hectares to a few million hectares, the increase in green
cover of such vast areas improves the ambient condi-
tions and local rainfall pattern, besides contributing to
reduction in global warming. There are some positive
effects on the river ecology also such as reduction in
frequency and intensity of floods leading to relief from
recurring wash-out of fertile soil and vegetation cover
of downstream flood planes. By tapping significant
amounts of river silt, the projects also help in providing
cleaner water to the downstream reaches of the project.
The abundance of water for most part of the year may
help the growth of forest cover and wild life along the
reservoir fringes and also help in growth of aquatic lives
in project reservoir. All such entities outside the com-
mand area may also constitute the PNB stakeholder
group.
68 THE STAKEHOLDER MODEL FOR WATER RESOURCE PROJECTS

Secondary Non-social Beneficiary (SNB)
Stakeholders
Because of the improvement in the conditions of cattle
population, the dairies and affiliated industries in com-
mand areas get immensely benefited thereby making
them SNB stakeholders. Besides, the organizations re-
sponsible for the compensatory afforestation programmes
of the project, along with those associated with reserve
forests, wild life sanctuaries, bird sanctuaries, etc. in the
command areas, also constitute the SNB stakeholder
group. Though the state government responsible for
formulation of water resource projects generally takes
into account the ecological and environmental benefits
of the projects, yet many of the central government
agencies, non-governmental organizations, and some-
times institutional financiers, also exert influence to
enhance project benefits to the non-social entities. All
such entities also fall under the SNB stakeholder class.
Primary Social Adversely Affected (PSA)
Stakeholders
Spread over vast geographical areas, the people dis-
placed by project submergence are the main constituents
of the PSA stakeholders. Being affected at a very early
stage of the project, they try their best to stall the project
and often succeed as well. Statistically, rural areas seem
to be more prone though instances of urban and semi-
urban areas coming under reservoir submergence are
also not uncommon.
Sometimes, the entire area is submerged leading to
large-scale displacement of people, generally to distant
locations. In such a case, the social fabric of the village
may be recreated with careful planning and execution.
Alternatively, only a part of the village may get affected
but it may be possible to accommodate displaced people
within the vicinity of that village. However, the most
common case is that of partly affected villages where
affected people are resettled in far-off places due to non-
availability of sufficient land; and, in such situations, the
social balance of villages gets disturbed threatening
their sustainability. From an economic viewpoint, some
of the project affected people may lose their entire
agricultural land and also their dwellings; some may
lose only the land or part of it but not the house; some
may lose only house but not the land. Those who are
affected significantly have no option against displace-
ment but they retain or even surpass their earlier social
and economic status, if properly compensated. Ironical-
ly, marginally affected people may not like to leave their
native place but may suffer long-term economic losses
and fall in social status despite reasonable cash compen-
sation for the lost land. Sometimes, people get affected
adversely even without losing land properties, as may
happen in the cases of landless farm labourers, boatmen,
traditional craftsmen, carpenters,blacksmiths, shoe-
makers, tailors, etc, whose means of livelihood get
affected due to large scale displacement of village
population. For large scale resettlement of project ous-
tees, the government is often required to procure land
from villages which are otherwise unaffected by the
project. This may create a secondary layer of displaced
people. Sometimes, a portion of the forest land or other
state-owned land is utilized for resettlementof the
project affected people thereby adversely affecting
another set of people who are dependent on the forest
produce or have encroached on the government land for
cultivation. All these people constitute the PSA stake-
holder group.
With commencement of project operations, fisher-
men along the downstream river stretch may get ad-
versely affected due to reduction in stream flows. The
farmers along the downstream river banks may also get
affected due to shortage of irrigation water. The econ-
omy of religious and tourist places along the down-
stream river banks may also get affected as these places
lose eminence due to degradation of the river. Industries
in the vicinity of rivers too get affected due to reduction
in stream flows leading to river pollution affecting
people along the downstream river stretches. All such
adversely affected people are also categorized as PSA
stakeholders.
Secondary Social Adversely Affected (SSA)
Stakeholders
The SSA stakeholders are indirectly concerned with the
adverse consequences of the project. This group may
include people who are emotionally aggrieved by the
displacement of near and dear ones, though they are
themselves not displaced. Similarly, in the case of
partially affected villages, the people left out from
displacement may suffer social, cultural, and economic
deprivation, and not being treated as project affected,
may not get compensated for the loss.
The SSA stakeholders also include individuals or
organizations who themselves are not affected but voice
concern for those subjected to large scale displacement
and hardships. They unite the segmented group of
oustees who are not only dispersed but belong to diverse
VIKALPA • VOLUME 29 • NO 1 • JANUARY - MARCH 2004 69

social, cultural, and economic strata. They educate the
oustees, who are mostly illiterate, about their own rights
in a democratic set-up. They provide oustees with
financial and material support for commencing and
sustaining agitations against projects. On behalf of
seemingly failing oustees, they also file legal suits
against the projects and thus provide judicial opportu-
nities to the displaced people. Many a times, such groups
with high-tech resources like large databank, audio-
video documentation, websites, etc., not only awaken
the media, political parties, and the general public but
also create significant hurdles in the way of project
funding by bringing influences on the funding foreign
governments and international financiers like World
Bank, IMF, etc. They often oppose water resource projects
in all their dimensions and fail to see any possible
advantages from them. They also refuse negotiated
settlements thereby jeopardizing the best interests of the
oustees. Remaining in the shadows of leading person-
alities of these (secondary) stakeholders, the directly
affected people may sometimes find their real issues and
voices muffled altogether.
There are also cases of SSA stakeholders’ entities
that work in collaboration with project authorities for
resettlement and rehabilitation of project oustees. Since
the project-displaced people are often not a part of the
mainstream society, they tend to be vulnerable when
officials with little competency in handling their affairs
try to mediate. In such cases, presence of secondary
stakeholders (with knowledge of local dialect and famil-
iarity of culture) considerably helps in mitigating the
hardships of project oustees.
Primary Non-social Adversely Affected (PNA)
Stakeholders
The flooding of large river valley areas by project
reservoirs along with the project construction activities
involving laying of roads, power lines, etc., leads to
fragmentation and destruction of forests. The deforesta-
tion (especially of tropical forests) caused by the water
resource projects is considered as one of the gravest
environmental concerns the world over. Between 50 to
90 per cent of all the earth’s species are believed to be
living in tropical rainforests which cover less than six
per cent of the total land area. It is estimated that project
reservoirs have traditionally caused about 10 per cent
of the total annual deforestation in the tropics, thereby
posing a great threat to biological diversity with the
possibility of total extinction of some of the genes,
species, and ecosystems (FIVAS, 1996). Though it is
difficult to predict the consequences of loss of such life
forms, it is generally believed that the loss will prove
to be a serious threat to our biosphere. Besides, forests
control the earth’s climate and deforestation may change
the global hydrological cycle, distribution of heat and
rainfall, and the chemical composition of the atmos-
phere. Thus, the forest ecology affected by project
constructionconstitutesthe PNA stakeholderentity.
The nomadic tribes of hunters and gatherers who are
the original inhabitants of these forests with immense
traditional knowledge of herbs, fruits, spices, and
medicinal plants, even unknown to modern science,
often fail to establish any social relationship with the
outside world. This set of people, affected along with
the flora and fauna of forest areas undergoing submer-
gence also falls in the PNA stakeholder group.
Many ancient monuments, religious places, and
archaeological sites may also go under submergence.
Artificially created submergences are known to induce
seismicity2 in and around reservoir areas. Numerous
adverse ecological effects are also felt in the area down-
stream of project reservoir due to changes in the channel
and flow characteristics of the river with major impact
falling on aquatic lives.3 Changes in the river bed grade
due to increased bed erosion are also possible owing to
reduction in the river silt load. Sustained reduction in
river flow may also cause salt intrusion in the estuarine
and lower river basin areas. If not compensated by
extension of project command, the groundwater levels
in areas downstream of the project may also fall notice-
ably. The changes brought about by reduction in river
flow may also affect the wild life and wetland life along
the downstream river banks and impact the biological
diversity of the area. These entities, which are conse-
quentially affected by the water resource projects, are
also part of the PNA stakeholder group.
Secondary Non-social Adversely Affected (SNA)
Stakeholders
All individuals and organizations showing concern for
the damages caused by water resource projects to the
ecosystem of the planet earth fall under the category of
SNA stakeholder group. This group constitutes a very
literate segment of the global society with scientific
background in specialized areas of atmosphere, hydro-
logy, geology, ecology, etc. In specific instances, anthro-
pologists, historians, archaeologists, and international
media may also form constituents of the SNA group.
70 THE STAKEHOLDER MODEL FOR WATER RESOURCE PROJECTS

International agencies like UN-related bodies, WWF,
etc., and financiers like World Bank, IMF, etc., also
sometimes voice their concern for the non-social ad-
versely affected entities and thus become SNA constitu-
ents.
There is increasing concern for the issues of envi-
ronment, bio-diversity, animal rights, etc., the world
over with the advent of information technology and, in
this situation, the role of SNA stakeholder group has
become vital in influencing the construction and oper-
ation of water resource projects. Many of them are
vehement opponents of water resource projects and their
arguments and views often provide intellectual support
to the social adversely affected groups. At times, the
secondary groups of social and non-social adversely
affected stakeholders pool up their resources and present
a united front against the water resource projects.
However, there are also SNA stakeholders helping the
project authorities in identifying the adversely affected
entities and measuring the project impacts on them (e.g.,
identification of threatened species in submergence
area, identification of fault zones for possible reservoir
induced seismicity, impact on fishes migrating up-
stream in search of spawning grounds, etc.). This know-
ledge sometimes helps project authorities in containing
adverse effects by appropriate adaptation of technical
measures.
The Octagonal Stakeholders’ Congregate
The above exemplified stakeholder groups can be struc-
tured into a model indicating their octagonal congregate
of influence on the water resource project as illustrated
in Figure 2.
The model demonstrates the two-way interaction
between the project and the stakeholders.The four
groups of beneficiary stakeholders (i.e., PNB, SNB, PSB,
and SSB) and the four groups of adversely affected
stakeholders (i.e., PSA, SSA, PNA, and SNA) divide the
sphere of stakeholders’ influence into two halves with
the cumulative influence of each hemisphere applied in
diametrically opposite directions. The adversely affect-
ed stakeholdersgenerally react in a manner which
would negate the scope of the project and retard its
progress. Often stirred in the initial construction stages
of the project, they mostly react in unison and become
difficult to negotiate. On the other hand, beneficiary
stakeholders bring influence to enhance the scope of the
project and accelerate its progress. They get activated
gradually and at intermittent time spans; but, most of
them remain aloof or passive during the construction
and initial stages of the project. Unlike the adversely
affected stakeholders’ unidirectional approach in op-
posing the project, the beneficiary stakeholders’ inter-
ests often clash with each other presenting a picture of
a (large) disjointed interest group.
The four groups of social stakeholders (i.e. PSB, SSB,
PSA, and SSA) and four groups of non-social stakehold-
ers (i.e. PNA, SNA, PNB, and SNB) also demarcate the
sphere of stakeholders’ influence into two halves. The
direction of influence brought about by social and non-
social stakeholder groups need not be having opposite
bearings as this factor will be mainly governed by their
perceived beneficiary or adversely affected status.
However, the social and non-social stakeholder groups
may differ extensively in the manner and intensity of
influences brought about by them on the project. Unlike
the case of social stakeholders where primary stakehold-
ers bring major influence, only the secondary stakehold-
ers interact and influence the project in case of non-social
stakeholders.Apparently, the social segment of the
stakeholders has an edge over the non-social stakehold-
ers in negotiating with the project for their cause.
Nonetheless, the importance of non-social stakeholders
is being increasingly recognized and, very often, their
Secondary
Non-social
Beneficiary
Primary
Non-social
Beneficiary
Primary
Social
Beneficiary
Secondary
Social
Beneficiary
Primary
Non-social
Adversely
AffectedSecondary
Non-social
Adversely
Affected
Secondary
Social
Adversely
Affected
Primary
Social
Adversely
Affected
F i g u r e2: Stakeholder Model for Water Resource Projects
I n d i c a t i n gt h e O c t a g o n a lC o n g r e g a t eof
Stakeholders
VIKALPA • VOLUME 29 • NO 1 • JANUARY - MARCH 2004 71

case is defended by the elite and literate segments of the
society, the politically active special interest groups, the
judiciary, the media, and many international bodies.
Evidently, the direction of secondary stakeholders’
influence is in line with that of its primary counterpart.
The importance of secondary non-social stakeholders is
understandable, though, in case of water resource
projects, secondary social stakeholders also play a very
vital role, especially in cases where primary stakehold-
ers are socially and economically backward and adverse-
ly affected by the project. The submergence areas are
mostly in hilly areas where population is highly dis-
persed and the people affected are generally tribal. Some
of the more backward tribes among them may, in fact,
be closer to the non-social category. The primary stake-
holders from such regions, owing to deprivation suf-
fered due to poverty, illiteracy, ethnicity, and geograph-
ical diversities, show limited willingness or ability for
stakeholder initiatives. The secondary stakeholders
representing the cause of such adversely affected peo-
ple, often voicing concave and convex view of the issues,
play a considerable role in influencing the projects.
Networked Effect of Stakeholders’ Influence
The eight identified stakeholder groups not only bring
influence on the project but also influence other
stakeholder groups thus creating a network of influence
on the project as illustrated in Figure 3.
The different stakeholder groups bring varying
degrees of influence on the project in terms of direction,
intensity, and the manner of influence. Each group may
influence other stakeholder groups as well thereby
triggering a change in their influence on the project. Such
triggers often lead to a change in the intensity, and
sometimes a change in the direction, of the influence.
For example, the possible cause of extinction of a
particular species (primary non-social adversely affect-
ed stakeholders) — as seen in the case of Silent Valley
Project in Kerala which was abandoned in the seventies
due to intense stakeholder activism — may influence not
only the other adversely affected groups through a
collaborative process to intensify opposition to the
project, but also exert stress on the beneficiary stake-
holders to withdraw support to the project. The net-
worked effect of stakeholders’ influence may sometimes
lead to a cascading effect brought by multiple groups
of stakeholders with resonant implications on the project,
which if not carefully managed, may lead to reduction
in scope of work in the best scenario or abandonment
of the project itself in the worst scenario.
Identification of pattern of collision or collusion in
different categoriesof stakeholders,through under-
standing of the networked effect, provides identification
of pathways for an enhanced and improved people-
oriented accountability for reasons of ensuring equity
and distributional goals. Failure to understand this route
jeopardizes the welfare goal and makes bureaucracy and
client relationship weak leading to entrenched political
behaviour detrimental to both project and the society.
CASE STUDY: SARDAR SAROVAR PROJECT
We illustrate the application of the stakeholder model
in the context of the Sardar Sarovar Project in Gujarat
for a better understanding of the issues of diverse groups
of stakeholders forming the octagonal congregate.
Distinguishing Features of Sardar Sarovar Proje
India has a long history of large projects starting from
Bhakhra Nangal, Hirakund, Nagarjuna Sagar, Tunga-
bhadra, etc., to the latest Sardar Sarovar Project which
will be the largest of them all. Comparative studies show
that the Sardar Sarovar Dam with a maximum planned
height of about 163.0 metres will be India’s third highest
dam after Bhakhra (226 metre) in Punjab and Lakhwar
(192 metre) in Uttar Pradesh. In terms of costs, this
project is ahead of all other river valley projects in India.
Initially estimated to cost Rs 64.06 billion (1986-87 price
WATER
RESOURCE
PROJECT
PSB
SSB
PSA
SSA
PNA
SNA
PNB
SNB
F i g u r e3 : N e t w o r ko f S t a k e h o l d e r s ’Influence
Legend
SSB: Secondary Social SSA: S e c o n d a r ySocial
Beneficiary. A d v e r s e l yAffected.
P S B :P r i m a r ySocial PSA: Primary Social Adversely
Beneficiary. Affected.
P N B :P r i m a r yNon-social P N A :P r i m a r yNon-social
Beneficiary. A d v e r s e l yAffected.
S N B : S e c o n d a r yN o n - s o c i a lSNA: S e c o n d a r yNon-social
Beneficiary. A d v e r s e l yAffected.
72 THE STAKEHOLDER MODEL FOR WATER RESOURCE PROJECTS

level), the estimates were revised at 1991-92 price level
to Rs 131.81 billion (SSCAC, 2003); and are now tenta-
tively estimated to exceed Rs 227 billion. An amount of
about Rs 148 billion has already been spent on the project
till June 2003 (SSCAC, 2003).
The project has a very large segment of beneficiary
stakeholders. Often termed as the life line of Gujarat the
project will provide irrigation to about 1.80 million
hectares in about 3,400 villages in Gujarat, besides
irrigating 75,000 hectares in arid areas of Rajasthan. The
project will also provide drinking water to about 8,215
villages (45% of total 18,144 villages) and 135 urban
centres of Gujarat and about 124 villages of Rajasthan.
Beneficiary stakeholdersinclude an enormous rural
group of about 4.5 million people and a vast urban
population of about 3.9 million (1981 census) and the
total projected population likely to benefit from the
project is 24.3 million in the year 2011 and 29.26 million
in the year 2021 (SSNNL, 1999). Furthermore, with the
gross command area spreading over the predominantly
water scarce region of about 3.4 million-hectares (SS-
CAC, 2003), the project has immense potential for
improving terrestrial greenery, forest cover, wild life,
aquatic life, and the lives of domestic animals, thereby
enrolling all such entities as beneficiary stakeholders.
In addition, with its 1450 MW twin complex pro-
ducing an estimated energy output of 5,469 GW hours
per year (SSCAC, 2003), the project will provide crucial
peaking power to Madhya Pradesh, Maharashtra, and
Gujarat, thereby enrolling the large industrial segment,
domestic power consumers, and governments of these
states as stakeholders.
However, the project is not free from its share of
adverse impact. A total of 37,533 hectares of land will
be submerged of which the private land will measure
about 11,279 hectares displacing about 40,919 families.
As per the 1991 census, about 1,27,500 people in 244
villages are to be displaced by submergence (SSCAC,
2003). Many of them are tribals but not too aloof from
the mainstream society to be considered as non-social
entity. Besides, large areas of land will be used for
development of canal network adversely affecting a
sizeable section of population (reliable estimates not
available). The forest land to be submerged will be
spread over an area of about 13,386 hectares (NCA, 2003)
affecting the flora, fauna, and ecology. Finally, there are
several human and non-human entities along the 150 km
stretch of river downstream of the project, which may
be adversely affected by the reduction (or near elimi-
nation) of river flows, subsequent to the realization of
the full potential.
Stakeholder Model for Sardar Sarovar Project
We identify and classify the stakeholders of the project
by applying the three-tier approach discussed earlier
and the resulting stakeholder octagonal congregate is
illustrated in Figure 4. Apart from the attributes delin-
eated by the octagonal congregate,the stakeholders
have other distinct features owing to the size, geographi-
cal location, and multi-state nature of the project. These
features are also highlighted for a proper understanding
of the stakeholder behaviour and influence on the
project.
The extra-large size of the project lends the stake-
holders a louder voice and political clout. The benefi-
ciary stakeholders’ political clout, engineering the cli-
ental dynamics, can be easily seen in priority fund
allocations given to the project and in the political
reactions, manner, and extent of jubilation marking
intermittentmilestones in the dam’s progress (India
Today, October 30, 2000). On the other hand, adversely
affected groups — again significant in terms of size —
also have strong political support which is reflected in
the manner the governments of Madhya Pradesh and
Maharashtra have often viewed the joint venture project.
The factor of large stakeholder-size also attracts social-
welfare groups, environmentalists,religious/philan-
thropic groups, and several NGOs (non-governmental
organizations)who often strengthenthe stakeholder
movement from within and outside. Many such groups
voiced their support for the project when dam construc-
tion — practically halted for over five years — faced an
uncertain future, pending final decision on its continuity
by the Supreme Court of India. There are also other
groups which have concern for the welfare of project
oustees opposing the project. The Narmada Bachao
Andolan (NBA) — at best described as a social welfare
group with mainstream leadership from outside the
submergence area — is one such group that has dras-
tically influenced the course of the project.
The command area beneficiaries show passionate
attachment and intense activism towards the project
largely because of the adverse geographic and climatic
conditions of Gujarat. Considering the frequent drought
scenario and limited groundwater resource,4 the sub-
stantial quantity of Narmada water that would become
VIKALPA • VOLUME 29 • NO 1 • JANUARY - MARCH 2004 73

S e c o n d a r yS o c i a lBeneficiary
* Agro industry in command area.
* Labours/traders in the command.
* O r g a n i z a t i o n sr e l a t e dt o health,
w e l f a r e ,f a r m i n gi n command.
* O r g a n i z a t i o n si n v o l v e di n the
r e h a b i l i t a t i o no f oustees.
* M a t e r i a l / e q u i p m e n tindustry.
* V i l l a g e sa r o u n dp r o j e c tsite.
* U n i o n sa n da s s o c i a t i o n sof
l a b o u r s ,contractors, suppliers.
* F o r e i g nc o u n t r i e ssupplying
e q u i p m e n ta n dtechnology.
* G O Iministries.
P r i m a r yS o c i a lA d v e r s e l yAffected
* P r o j e c to u s t e e si n MP(89,800),
M a h a r a s h t r a( 1 9 , 7 0 0 )a n dGujarat
(18000).
* S e r v i c ep r o v i d e r s( L a b o u r s/boatmen/
c r a f t s m e n )i n s u b m e r g e n c earea.
* People whose lands are acquired for
r e h a b i l i t a t i n gp r o j e c toustees.
* People dependent on government/forest
l a n dt h a ta r eg i v e nt o oustees.
* People whose lands are acquired for
m i s c e l l a n e o u sp r o j e c tr e l a t e dworks.
* Fishermen, farmers, and other people
a l o n gN a r m a d ab a n kd o w n s t r e a mof
K e v a d i aD a msite.
S e c o n d a r yN o n - s o c i a lBeneficiary
* D a i r ya n dr e l a t e dindustries.
* U n i o na n ds t a t ed e p a r t m e n t srelated
t o a n i m a lh u s b a n d r y ,f i s h e r i e s ,etc.
* Departments dealing with wildlife and
b i r dsanctuaries.
* Bankers to project who usually insist
on enhancement of benefits to the non-
s o c i a lentities.
* Union and state departments dealing
w i t hc o m p e n s a t o r yafforestation.
Secondary Social Adversely Affected
* V i l l a g e si n p a r t i a ls u b m e r g e n c e :MP
( 1 9 1 ) ,M a h a r a s h t r a ( 3 3 ) ,Gujarat(16).
* P e o p l er e l a t e dt o p r o j e c toustees.
* NBA and activists like Medha Patkar,
A r u n d h a t iR o y ,etc.
* I n t e r n a t i o n a lorganizations(e.g.IRN).
* N a t i o n a la n di n t e r n a t i o n a lmedia.
* N G O sh e l p i n gi n r e s e t t l e m e n tworks
* A p e xa n dl o c a ljudiciaries.
P r i m a r yN o n - s o c i a lBeneficiary
* G e n e r a lv e g e t a t i o n ,c a t t l e ,reptiles,
i n s e c t s ,b i r d s ,e t c .i n c o m m a n darea.
* W i l d l i f ea n d b i r ds a n c t u a r i e si n and
a r o u n dt h ec o m m a n dareas.
* F u t u r eg e n e r a t i o ni n c o m m a n darea.
* R a i n f a l l ,a i rq u a l i t y ,t e m p e r a t u r e ,and
g e n e r a le n v i r o n m e n ti n command.
* C o m p e n s a t o r ya f f o r e s t a t i o nareas.
* F e r t i l es o i l a n d v e g e t a t i o ncover
d o w n s t r e a mo f d a m p r o t e c t e dfrom
r e c u r r i n gfloods.
* F o r e s t / w i l d l i f eo n r e s e r v o i rfringes.
* A q u a t i cl i f ei n reservoir.
S e c o n d a r yNon-social
A d v e r s e l yAffected
* National and international
organizations opposing the
p r o j e c to n environmental
a n de c o l o g i c a lissues.
* N a t i o n a l / i n t e r n a t i o n a lmedia
f o c u s e do n e c o l o g i c a lissues.
* Union/state departments of arch-
eology, geology, forests, hydro-
l o g y ,f i s h e r i e s ,etc.
* Institutions/universities dealing in
i m p a c ta s s e s s m e n tstudies.
* A p e xa n dl o c a ljudiciaries.
Primary Non-social Adversely Affected
* Flora, fauna, and ecosystem in 13,385
ha. of forest going in submergence.
* River morphology and hydrology of Nar-
m a d ai n s u b m e r g e n c e( 2 1 4k m )and
d o w n s t r e a m( 1 5 0k m )reaches.
* M o n u m e n t s ,a r c h e o l o g i c a ls i t e s ,and
t e m p l e sg o i n gu n d e rsubmergence.
* Topology and tectonic features of areas
i n t h er e s e r v o i rvicinity.
* A q u a t i cl i f ed o w n s t r e a mo f dam.
* G r o u n d w a t e ra n d s a l i n i t yi s s u e sin
a r e a sd o w n s t r e a mo f t h edam.
Beneficiaries
A d v .Affected
S o c i a lStakeholders Non-social
Stakeholders
P r i m a r yS o c i a lBeneficiary
* Farmers in Gujarat(1.79 million ha.) and
R a j a s t h a n ( 7 5 , 0 0 0h a . )command.
* D r i n k i n gw a t e rb e n e f i c i a r i e si n 8,215
v i l l a g e sa n d1 3 5u r b a nareas.
* I n d u s t r i a lw a t e ro f 6 6 1MLD.
* B e n e f i c i a r yo f 5 , 4 6 9G W Hpower/yr.
* G o v e r n m e n t so f G u j a r a t ,MP,
M a h a r a s h t r a ,a n dRajasthan.
* Employees of SSNNL, SSPA, NPG, and
o t h e rr e l a t e ds t a t edepartments.
* G O Io r g a n i z a t i o n s :N C A ,SSCAC.
* C o n t r a c t o r sa n ds u p p l i e r st o project.
* F i n a n c i e r st o t h eproject.
Sardar
Sarovar
Project
available from this project is very crucial for Gujarat.
Similarly, the sentiments and activism of adversely
affected social stakeholders are also intense and the
hyper-activism by the two groups has almost divided
the stakeholders along state boundaries. This is because
of the peculiar geographical layout — while the project’s
command extends to Gujarat and Rajasthan, its submer-
gence extends to the states of Maharashtra and Madhya
Pradesh. The burden of reservoir storage — in terms of
submergence of area and displacement of population —
is chiefly to be borne by Madhya Pradesh and to some
extent by Maharashtra. Though nearly 92 per cent of
consumptive benefits are accruing to the state of Gujarat,
its burden of submergence in terms of area and popu-
lation displaced is only about 19 per cent and 14 per cent
respectively. On the other hand, Madhya Pradesh has
to bear the major burden of submergence with nearly
55 per cent of submerged land and 70 per cent of project
F i g u r e4 : S t a k e h o l d e rM o d e lf o rS a r d a rS a r o v a rProject
Legend
M L D :M i l l i o nl i t r e sp e rday. G W H :G i g awatt-hour.
S S N N L :S a r d a rS a r o v a rN a r m a d aN i g a mLtd. S S P A :S a r d a rS a r o v a rP u n a r v a s a h a tAgency.
N P G :N a r m a d aP l a n n i n gGroup. G O I :G o v e r n m e n to f India.
NCA: Narmada Control Authority. SSCAC: Sardar Sarovar Construction Advisory Committee.
N B A :N a r m a d aB a c h a oAndolan. I R N :I n t e r n a t i o n a lR i v e r sNetwork.
74 THE STAKEHOLDER MODEL FOR WATER RESOURCE PROJECTS