Green group urges Laos to stop dam expansion plan

Tue Nov 27, 2007
By Darren Schuettler

BANGKOK, Nov 27 (Reuters) - A major expansion of a hydropower dam in communist Laos will cause serious flooding, ruin fisheries and displace thousands of people living downstream, a Norwegian environmental group said on Tuesday.

Water releases from the Theun-Hinboun dam had already ruined the ecology of two rivers and damaged fisheries and farms since it was built a decade ago to supply electricity to neighbouring Thailand, the group said in a new report.

"In a cruel irony, many of the people to be affected by the expansion project have already been seriously affected by the existing Theun-Hinboun Hydropower Project," the report by the Association for International Water Studies (FIVAS) said.

The Theun-Hinboun Power Co, owned jointly by Norwegian state power utility Statkraft, a Thai power firm and the Lao government, had so far failed to pay compensation to people living downstream, it said.

The company should shelve the plan "until it has proven that it is capable of restoring the livelihoods of communities affected by the existing project," FIVAS director Andrew Preston said in a statement.

Statkraft, which owns 20 percent of the joint venture, said $45 million had been set aside in the project to address the problems mentioned in the report such as by building houses, schools, infrastructure and health stations.

But Statkraft brushed off FIVAS' demands to back out of the project, which will double power production from the dam.

"We think this is a sustainable and a right project in a region experiencing strong growth and strong demand for energy," said Statkraft's spokesman Knut Fjerdingstad.

The expansion involves the construction of a 65-metre (213-ft) high dam on the Nam Gnouang river and a water diversion to the Nam Hai and Nam Hinboun rivers.

The report estimated it would "affect over 50,000 people who will suffer flooding, displacement, erosion and loss of livelihood if the project is approved", of whom 4,200 would be forced to move to higher ground.

Fjerdingstad said the challenges cited in the report were known to Statkraft, and the company would take seriously any input that could contribute to improving the project.

"This project will happen whether Statkraft is in on it or not. We can contribute to making this a better project," he said. The start-up is planned for 2008, though the final decision has not been made, he said.

WESTERN INVESTMENTS

The report was released ahead of a workshop on the expansion plan being held this week in the Lao capital, Vientiane.

The study was conducted by a research team that interviewed people in five villages along the Hai and Hinboun rivers in May.

Landlocked Laos says it wants to become "a battery for the region" by building a series of dams with funds mainly coming from neighbouring Thailand, China and Vietnam.

Western companies are also investing heavily in Laos, led by French electricity group EDF, which is involved in the massive Nam Theun 2 project.

Lao Prime Minister Bouasone Bouphavanh told Reuters last week his country was committed to supply 7,000 megawatts to Thailand, 5,000 megawatts to Vietnam and 1,500 megawatts to Cambodia by 2015.

The government has said it will use the profits from hydropower sales to fight poverty in the country of 6.5 million people, where the average monthly income is less than $2 a day. (Additional reporting by Aasa Christine Stoltz in Oslo; Editing by Michael Battye and Roger Crabb/James Jukwey)

Laos plans a water-powered future

Large-scale dam projects often prove controversial

Wednesday, 21 November 2007
By Lawrence Ong
Asia Business Report, BBC World, People's Democratic Republic of Lao

For an Asian capital, Vientiane in the People's Democratic Republic of Lao is a sleepy place.

The pace of life in the former French colony is slow, and time often feels as if it is standing still. The closest thing to rush hour is the morning market with every other stall selling baguette sandwiches.

Just minutes away from the capital, there is even a greater sense of serenity.

Like Cambodia, Laos is known for its tragic past. During the Vietnam War it became the most bombed country in history - and that has left a legacy of poverty and underdevelopment.

Four out of five people in this mountainous, landlocked country are subsistence farmers living hand to mouth.

According to the United Nations Development Programme, Laos is currently ranked 133rd out of 177 countries on the Human Development Index.

Natural benefits

But Laos is blessed with a long stretch of the Mekong river, and the river's tributaries and the country's mountainous landscape offer huge potential for generating hydro-electric power.

The Lao government now dreams of becoming the "battery of South-East Asia", utilising the country's powerful natural resource to boost its development.

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"What Laos needs is a development strategy to reduce poverty without destroying the rivers and resources upon which Lao people depend" - Shannon Lawrence, International Rivers
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And with its neighbours such as China, Vietnam, and Thailand all craving energy supplies to fuel their surging economies, finding a buyer for the power is not a big worry.

Already under construction, the Nam Theun 2 dam is one of the biggest and most controversial projects in the region.

Located in the central Lao provinces of Khammuane and Bolikhamzy, the $1.45bn (£705m) project is being built by a consortium of companies including Electricite de France (EDF) and the Electricity Generating Company of Thailand.

The World Bank and the Asian Development Bank are among the international agencies providing the funding and support to the project.

When the project is completed at the end of 2009, neighbour Thailand plans to import more than 90% of the power, earning the Lao government about $1.9bn over the next 25 years.

'Lot of thought'

The World Bank sees this as a model project, and it says that every step has been taken to minimise the environmental and social impact.

Peter Stephens, spokesperson at the World Bank, says Nam Theun 2 is a great opportunity for Laos to make a lot of money over a long period of time and use it to help alleviate poverty.

The dam in Laos will change the lives as well as the landscape

"It's a project that has seen a lot of thought put into its side-effects on the environment and the local communities," he explains.

Mr Sor and his family are amongst the 6,200 indigenous peoples who have been forced to move home in order to make way for the dam's reservoir which stretches 450-square kilometres (281 square miles).

Their house in Sopia Village is brand new, and the village now has access to better roads and cleaner water.

"We are settling down nicely now. When the new land is ready, I will grow fruit or vegetables," says Mr Sor.

Powerful problems?

But some critics argue that these villagers are among the luckier ones. They say that many more families are not getting the compensation they deserve, and that question marks remain over their long-term livelihoods.

Non-profit organisations including International Rivers say other hydro-electric power projects in Laos have left a legacy of destroyed livelihoods, and seriously damaged the local environment.

"What Laos needs is a development strategy to reduce poverty without destroying the rivers and resources upon which Lao people depend," says Shannon Lawrence of International Rivers.

"That is the type of initiative the World Bank should be supporting," she added.

For Laos, hydro-electric power is a highly lucrative venture, and it is already constructing another 10 dams and considering building up to 70 more.

The government promises to use the money to alleviate poverty.

But with the country consistently rated as one of the world's most corrupt, there are serious questions as to whether hydro-electric power projects will truly benefit the locals, or simply help make their government richer.