The project met with substantial resistance from local residents who faced displacement, many of whom rejected the compensation offered as inadequate[3] and claimed that the land where the government allowed them to resettle was unfit for cultivation, had no drinking water, and was virtually inaccessible by road.

[8] The government, hard-pressed by the deadlines for construction of the dam imposed as a condition of the grant from the Japan Export-Import Bank, continued to pressure residents to accept the compensation offered and leave the area, while curtailing the activities of NGOs, support groups, and the media.

[9] At the same time, in an attempt to lessen villagers' protests without addressing their complaints, the authorities allowed residents to continue farming greenbelt areas and tidal lands around the reservoir.

The suit made its way to the Indonesian Supreme Court, which in 1993 awarded 9 billion rupiah (USD $3.9 million) to thirty-four households for the damage done to their land, buildings, and crops and the loss of their homes.

A total of 5,268 families at that time lost their land due to the construction of this dam; some moved onto rafts or into trees, others were stranded on newly formed islands, and others shifted as much of their houses and belongings as they could rescue onto higher ground, only to be flooded out again as the reservoir rose further.