Southeast Asia Set to Square Off Again on Xayaburi

Dec 5, 2011
Source: Blogs.wsj
By James Hookway

Laos’s plans to establish itself as the hydroelectric powerhouse of Southeast Asia will likely face a fierce challenge this week from neighboring Vietnam and Cambodia which worry that the proposed $3.5 billion Xayaburi dam will devastate fish stocks and disrupt crucial sediment flows to the rice-growing Mekong river delta.

European Pressphoto Agency

Cambodian fishing boats on the Mekong river in Phnom Penh, Cambodia, 19 April 2011.

Thailand, Vietnam, Cambodia and Laos are due to meet in Siem Reap, Cambodia, Thursday to decide whether Laos can proceed with the massive project. If the green light is given at the ministerial-level gathering of the Mekong River Commission, then it could kick-start the development of a series of other dams and, environmentalist groups warn, prioritize industrial power needs over ensuring food supplies and the rights of river-side communities in affected areas.

While no single country can veto another’s plans, Laos is the smallest nation in the Mekong region and may be wary of pushing through with the Xayaburi project if its more powerful neighbors object.

Vietnam in particular is concerned about the impact of dam-building on food security and has urged a 10-year moratorium on the construction of new dams on the river until their consequences are better understood. Already, nutrient-rich sediment flows to the delta are slowing because of the construction of other dams further upstream in China. One consequence is that salt water is now encroaching further up Mekong river than before, threatening to damage large areas of prime rice-growing land.

Cambodia, too, has expressed its concern about how dams could divert migrating fish, and after the four countries met in April – and where Laos agreed to suspend the project temporarily – delegates will meet again to discuss the Xayaburi project’s fate.

Laos’s leaders, though, are holding on to idea of turning itself into the hydropower battery for the region in order to drag the isolated, Communist-run out of poverty.

Laotian officials couldn’t immediately be reached for comment, but have previously insisted that the Xayaburi project wouldn’t have any significant impact further down the Mekong river.

Tellingly, perhaps, Thailand, the sole buyer of the power generated by proposed dam, is keeping out of the debate. Thai firm Ch. Karnchang PCL is the main developer and Thai banks are also providing financing.

Thailand’s energy minister, Preecha Rengsomboonsuk told reporters last week that the dam is Laos’s internal affair and Thailand won’t intervene. Laos, he said, will have to take care of the environmental impact by itself.