Hydropower on the Mekong

Might not give a dam

2 May, 2011
Source: Economist

THE communist government of Laos has big plans for the country's economy, which is yet the smallest in South-East Asia. By harnessing the power of the Mekong river, which runs the length of the country, the government hopes to quench the region’s perpetual thirst for electricity and to transform Laos into “the battery of South-East Asia”. Throughout April however representatives from most of the country's neighbours, Thailand, Vietnam and Cambodia—the nations that the Lao government has hoped would become its biggest customers—failed to endorse its plan to build a huge dam at Xayaburi, which was supposed to be the first of a series to cross the lower stretch of the Mekong.

The multinational Mekong River Commission (MRC) expressed concerns about the rigour of the environmental assessment carried out by the Lao government, and in particular the effects of the dam on the Mekong delta region in southern Vietnam. Given the importance of the Mekong ecosystem, which supports tens of millions of people, such concerns are hard to ignore. Ecologists have argued that the construction of the dam will push dozens of species of migratory fish into extinction, turn sections of the river into reservoirs and, by diminishing fish stocks, reduce the main supply of protein for riverside communities. It is estimated that about 2,000 villagers will also have to be resettled. Similar worries have plagued China's efforts to dam the source of the Mekong.

As it was unable to reach a consensus, the MRC agreed to take the proposal to ministerial level. The way forward is unclear, given the wide differences of opinion between the MRC's members. Vietnam, which, as the site of the delta arguably has the most reason to worry after the dam’s environmental impact, would like not only to scrap the dam, but impose a ten-year moratorium on all new hydropower projects on the lower Mekong. Cambodia and Thailand wish to see further research into the environmental effects. Thailand’s position is complicated though; a Thai company won the contract to build the $3.5 billion dam, and one of its state-owned enterprises has a 25% equity share in the project.

A further problem concerns the MRC's lack of clout. As a consultative body, it cannot prevent any of its members from acting unilaterally. After the meeting the Lao energy minister, Viraphonh Viravong, who is also head of the Lao delegation to the MRC, promised to "consider to accommodate all concerns", but warned that further environmental studies would take longer than Laos was willing to wait. Indeed the patience of the Lao authorities may already have run out. A report in the Bangkok Post includes photos that appear to show that construction at the site is already under way.

Construction of the dam at Xayaburi risks opening the proverbial floodgates. The Lao government has proposed a further 11 hydropower projects along the lower Mekong, which will be harder to oppose if the river has been dammed already. The potential exists for the dam to turn into another regional flashpoint. Lao rhetoric towards Vietnam, its closest ally, has been unusually bullish. Of course were Laos to disregard Vietnam’s completely the region’s brand-new battery might be left trying to bring power to a broken circuit.