Mekong dam faces resistance

4 Mar, 2011
Source: UPI

BANGKOK, March 3 (UPI) -- A 1,260-megawatt hydropower project in northern Laos poses a threat to the environment and surrounding communities, environmentalists say.

Xayaburi dam, the first of 11 hydropower dams proposed along the lower Mekong River, is just ending the consultation phase and a decision on construction could come as early as this month.

The Mekong Agreement, which recognizes the shared impacts of river development projects on neighboring countries, stipulates that Thailand, Cambodia, Laos and Vietnam must all approve major projects on the lower Mekong River.

Last June, Thai electricity utility EGAT signed an initial agreement with the dam's main developer, Thai construction company Ch Karnchang, to purchase more than 95 percent of the project's electricity.

Potential investors for the $3.5 billion hydropower project include Bangkok Bank, Kasikorn Bank, Krung Thai Bank and Siam Commercial Bank.

But investors for Xayaburi, as well as the 11 other proposed Mekong River projects, need to absorb the lessons of Thailand's Mun River dam, WWF said Thursday. That project, constructed in the early 1990s, was a "notable economic failure" which caused massive environmental and social disruption, the environmental group said.

Mun River's final cost was $233 million, double the original estimate, with return on investment falling to 5 percent from a projected return of 12 percent, WWF said.

"From an investor standpoint, this project is risky, plain and simple," said Suphasuk Pradubsuk, national policy coordinator with WWF-Thailand, in a release.

"Developers and investors should consider the reputational risk of damming Asia's most bio-diverse river."

The Mekong, he said, is a "unique and particularly complex" ecosystem, hosting the most productive inland fisheries in the world, second only to the Amazon in the number of fish species.

Environmental group International Rivers says that more than 200,000 fishermen and farmers -- most of the lower riverside community -- would suffer displacement and reduced earnings because of the Xayaburi project.

"Millions more people in the region are likely to be adversely (affected) through changes to the river's biodiversity, fisheries and sediment flows," said Ame Trandem of International Rivers, reports IRIN, the news service of the U.N. Office for the Coordination of Humanitarian Affairs.

The Laotian government, however, maintains that Xayaburi won't have any significant impact on the Mekong mainstream.

International Rivers has called for better energy solutions to protect the Mekong River.

"What happens with the Xayaburi Dam will essentially set the precedent for whether more mainstream dams are built or not," Trandem said.