The Guardian, Sep 18 2017, Gujarat: A mega-dam that became one of India’s greatest environmental controversies during the three decades it was under construction has been formally declared complete by the prime minister, Narendra Modi.

Activists have warned that 40,000 families across hundreds of villages will lose their homes as a result of the construction of the final stage of the dam and are yet to be adequately compensated.

They said some lower-lying villages inside the “submerge zone” that were most vulnerable to rising water levels had already started to flood in the week before the structure was officially inaugurated on Sunday.

At a ceremony in Gujarat, Modi said the Sardar Sarovar dam, the second largest in the world by volume of concrete used, had been completed despite a “massive misinformation campaign” by opponents.

He singled out the World Bank, which had offered a US$450m loan for the construction of the dam, but pulled out in 1993 after years of environmental protests – thought to be the first time the organisation backtracked on a funded project.

“World Bank or no World Bank, the people of this country had faith in us and it is due to their determination that this project has been completed,” Modi said, adding that temples in Gujarat had donated money to help make up the shortfall left after the international fund reversed its loan.

The dam’s reservoir is expected to provide drinking water, irrigation or hydroelectricity to Gujarat, Madhya Pradesh and Maharashtra, three states that regularly suffer drought.

The foundation stone for the 1.2km-long infrastructure was laid by India’s first prime minister in 1961, but formal construction did not begin for another 26 years and was frequently interrupted.

Campaigns led by a grassroots opposition group, Narmada Bachao Andolan (NBA), succeeded in pressuring the World Bank to order a review of its funding for the project in 1992. The review found shortcomings in the estimated environmental and social impact of the project and concluded it could proceed only by “unacceptable means”.

In response to an NBA lawsuit in 1996, the Indian supreme court halted construction on the dam. It granted permission to restart building four years later with stricter requirements to rehabilitate affected communities.

Medha Patkar, a spokeswoman for NBA, said shops and markets in some villages in Madhya Pradesh had already started to become submerged since water levels rose in the area in the past week. “The water has already reached inside some of the hamlets with 3,000 families,” she said.

She said rain in the past week and water releases from further upstream had already begun to cut off bridges into lower-lying land. Police were also beginning to cordon off roads in the threatened areas. “One by one they are going to cut off these villages,” Patkar said.

The government says the number of affected families is much lower – about 18,000 – and that those most at threat from rising waters were being helped to relocate.

However, Patkar said many of those moved had been shifted to “temporary tin sheds that cannot even accommodate one single farmer’s household … How can they declare the project is complete when rehabilitation [of communities] is not complete? A dam is not just a concrete wall.”

Many of those affected are Adivasis, or Tribals, one of India’s poorest communities that has borne the brunt of the country’s large-scale development projects.

Patkar said the focus of the movement against the dam would shift to campaigning for adequate compensation for the displaced. “The government is obligated by the supreme court to fulfil all social and environmental conditions,” she said. “They can’t just dedicate it to the nation and say it is complete.”