The Cambodia Daily
By Kuch Naren and Dene-Hern Chen
November 27, 2012
Local conglomerate Royal Group yesterday signed a deal in Phnom Penh
with China’s Hydrolancang International Energy Co. Ltd. to build the
controversial Lower Sesan 2 dam in Stung Treng province.
After the investment agreement was signed between Royal Group’s
chairman Kith Meng and Hydrolancang’s chairman Huang Guangming,
representatives from both companies then signed a separate agreement
with the Ministry of Finance and the Ministry of Industry, which allows
for construction on the project to move forward.
According to a statement released at the ceremony, construction will
take place over a five-year period and the dam will be operated for 40
years before ownership is transferred to the government.
China’s state-run news agency Xinhua reported yesterday that the
total investment in the dam is worth $781 million. Once the project is
operational, the government will earn tax revenues of $29.6 million per
According to a Ministry of Industry document obtained earlier this
month, Royal Group will hold a 90 percent stake in the project in
partnership with Hydrolancang, while Vietnam’s state-owned electricity
giant Electricity Vietnam has a 10 percent stake.
It was not explained yesterday why representatives of Electricity
Vietnam were not present at the signing ceremony and Mr. Huang of
Hydrolancang declined to comment on his company’s involvement in the
project. According to the ministry documents, the consortium made up of
Royal Group, Hydrolancang and Vietnam Electricity will be known as Hydro
Power Lower Sesan 2 Co. Ltd.
Located near the confluence of the Sesan and Srepok rivers in Stung
Treng, the 400-megawatt dam project is set to displace about 5,000
villagers, though environmentalists believe that thousands more
villagers will be affected. One report also estimated that the Lower
Sesan 2 dam could cause a 9.2 percent loss of fish stocks to the entire
Mekong River Basin.
Speaking on the sidelines of the signing ceremonies in the Royal
Group-owned Cambodiana Hotel, Mr. Meng said all the dam’s energy would
be supplied to Cambodia.
“It will 100 percent be provided to the Cambodian people to develop their economy,” Mr. Meng said.
Downplaying concern by the thousands of villagers who must move to
make way for the dam, Mr. Meng said an inter-ministerial committee would
be set up to make sure that resettlement and compensation is fair.
Despite Mr. Meng’s assurance, Chan Thon, a villager representative in
Srekor commune said villagers had yet to receive any information
regarding their future.
“Would you be happy if you will be displaced, lose your livelihoods and your careers?” Mr. Thon asked.