This paper deals with EIA for construction of three reservoirs, namely Haldia, Jambhira and Baura in Mayurbhanj district, Orissa. The gross command area of the project is about 170 000 ha while the culturable command area is 110 000 ha. The baseline data for parameters such as water quality, population, meteorology, phys‐iograhpy, geology, ecology, soil, land use, etc. were collected to assess the impacts. The positive as well as negative impacts were ascertained and management plans were formulated for critically affected parameters. Management measures such as compensatory afforestation, rehabilitation of oustees, plantation of village woodlots, realignment of canals etc. have been prepared. A post‐project monitoring plan is being suggested for water quality, soil, public health and growth of aquatic weeds. The costs for management measures and post‐project monitoring programmes have been computed. A checklist of positive and negative impacts has also been prepared which highlights that the project is eco‐friendly.