For the project purpose land was acquired from local inhabitants, and construction started in 1982-83. However, the project works stopped in many occasion due to the opposition to land acquisition by the land owners. Also, forest clearance was not granted because the project is located in the forest areas. There were also complains of corruption and the lack of funds.

The agitations by the land owners started since 1972, when the project was initially conceptualized. In January, 1979 thousands of tribal, hold protest demonstration at the dam site. Police fired bullets to the agitating protestors resulted to deaths of four individuals. Since then, villagers are repeatedly protesting for rehabilitation and compensation to the concerned authorities [2].

About 52 villages are submerged every year during the monsoon, when the water level of the dam rises. Generally, villagers are relocated in temporary makeshift arrangements. Local administration sometimes posted notices in villages likely to be submerged during the monsoons. This provided the impetus for the villagers to approach the Supreme Court. The protest got a momentum after the formation of an organization called Visthapiti Mukti Vahini (VMV).

VMV is working for the causes of the dam oustees and have challenged the rehabilitation of people displaced by the Chandil dam in the Supreme Court of India in 1992. The petitioners have challenged the Land Acquisition Act and asked for rehabilitation and resettlement packages [3,4].

Initially World Bank has sanctioned $127mn as assistance, but the funding was withdrawn following the protest by the locals. In 1998 National Bank for Agriculture and Rural Development (NABARD) sanctioned a loan of Rs 118 crore for the construction of the project. However, there were allegation of financial corruptions, irregularities and mismanagement found in this project. Now the estimated cost of the project is Rs 6,613 crore and will be shared 90:10 between the state and the Centre [2]

The construction of Chandil dam & Galudih barrage are completed. The Power house with capacity of 8 MW (2 units of 4 MW each) is to be constructed at the Left Bank outlet of Chandil dam. Kharkhai barrage has not started yet and the works of Icha dam is almost completed. Irrigation potential of about 2200 hectares has been created [1].