Bhavnath Temple Solution

Topics: Marginal cost, Dam, Variable cost Pages: 6 (1054 words) Published: August 19, 2010

Executive Summary

All round economic development was the main focus of the Indian government. A lot many projects were being considered on a long term biases like Dams to be constructed over rivers in Northern Gujarat. The Government of Gujarat wanted to start and complete the project as soon as possible. The project was seen with a lot of economic prowess. One issue of concern that was important was that, Bhavnath temple was in middle of the dam reservoir. After a lot of negotiation and assurance to safeguard the interests of the people they agreed. And an increase in the dimension of dam was proposed because of higher promised returns, but this would lead to submerging the temple. Which caused resistance and hence the negotiations failed.

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Back then in 1960 the government of Gujarat was interested in the dam project, but with increased challenges and higher expected returns .(Check Exhibit) . If the government were to go ahead with the project, the temple would be lost and the only possible solution would be relocation. The natives and locals, even after negotiations about relocating temple and preserving the rites, eventually did not agree and hence the project was at a halt.

Across rivers Sadamata and Lokmata, in Northern Gujarat, the government plans to build a number of dams, they are intended for economic progress, two of the main objectives of the government are financial returns and agricultural progress. The estimates of the dam project suggested that the project would be successful. (pls refer to the exhibit).The villages in the project area gave consent for the project after a lot of negotiations about compensation and rehabilitation, which will be a direct cost to the project.

But the problem or issue of submerging Bhavnath temple, led to a protest by villagers, as the temple was of religious and economic importance. The government planned measures to protect the temple and renegotiate with the villagers.


The religious sentiments of the villagers towards the submerging of Bhavnath temple are causing the project to be diverted off its intended course and come to a stand still situation.


Controlling the situation and coming to common solution, so that the project can be started and completed on time.


• Economic development is a main concern.

• Successful completion of this project would lead to better management in further future projects.

• Alterations in the specifications have caused unrest amongst villagers, but calculations show that the resulting output comes at marginally increased cost.


1. Renegotiate with the villagers so that they can understand the implications and benefits of the projects properly.

2. Use the original specifications, and go ahead with the project


• Option 1

If the dam were to be constructed with the new specifications it would lead to a command area of 112666, output of Rs 19.2 lakhs per annum and production of value Rs 179.17 lakhs. Such figures cannot be ignored.

Secondly, it is that relocating the temple , will prevent it from being submerged in the event of overflowing of the dam . This would also safeguard the religious and tourism interests. Thus renegotiations should be done with proper efforts.

• Option 2

The calculated revenues resulting from the original specifications are shown in the exhibit. However, the temple in the middle of the reservoir would lead to constant issues of maintenance and threat of it getting submerged. The annual fair would also suffer a loss of income. Whereas the religious sentiment of the natives and followers would remain unhurt.

There will be a marginal cost difference between the two options.


It is suggested that caution is observed while implementing the options as the project being of both economic and agricultural importance should be...
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