Three Gorges Probe
November 7, 1995
Monenco Agra, a subsidiary of Calgary-based Agra Industries Ltd., plans to help the Chinese government displace more than one million people to make way for the Three Gorges dam.
The $34.5 million contract to provide a computer system which will coordinate the resettlement of 1.3 million people, was signed at the Canada China Business Council annual meeting in Montreal in October, with Prime Minister Jean Chretien and Chinese Premier Li Peng in attendance. The computer system is similar to the one Monenco Agra built for the Hibernia offshore oil project near Newfoundland. It includes voice-data networks and computers that will help the Chinese manage the Three Gorges project.
China’s Three Gorges dam is the largest construction project in the world. Proponents of the dam claim it will generate needed electricity, provide flood control and ease navigation on the Yangtze. Critics, however, contend that the 2-km-wide dam, which is being built over several seismic faults, would actually cause flooding and disrupt navigation. In addition, they argue, sedimentation would destroy the dam’s turbines in less than ten years.
Despite international opposition to the project, the Canadian government is eager to help China build the dam. Last November, on the eve of his Team Canada trip to China, Prime Minister Chretien gave the Export Development Corporation the green light to finance Canadian exporters eager to win Three Gorges contracts. The EDC, which supplies publicly-subsidized insurance and financing to help Canadian companies win contracts abroad, is expected to finance the Monenco Agra contract and has already supplied $23.5 million to China to build a plant that will supply cement for the dam. The contract for the cement plant went to Dominion Bridge, a Montreal-based engineering firm.
Canada’s support for the project is noteworthy because most financiers, and even prominent engineering companies, are shying away from the controversial project. In 1993, the U.S. Bureau of Reclamation, which had been involved in the preparations for Three Gorges since 1944, pulled out of the project saying it was neither economically nor environmentally feasible. The World Bank, notorious for its involvement in large dam schemes, has stated that the current design of the Three Gorges dam is “not economically viable.” Even foreign companies are wary of vying for Three Gorges contracts. The Swiss hydropower company Sulzer has publicly declared that it is not interested in Three Gorges contracts, and has said that the project is the last example of a disappearing species.
Since big-name financiers like the World Bank and U.S. Bureau of Reclamation have refused to be involved in the project, China will increasingly have to rely on export credit agencies like Canada’s EDC to build Three Gorges. But at least one export credit agency, the Export-Import Bank of the United States, has been warned to stay away from the controversial project. A recent memo from the White House to Ex-Im bank president Kenneth Brody concludes that the U.S. government “should refrain from offering commercial assistance in connection with the Three Gorges project.” The letter cites legal, environmental, financial and human rights concerns as factors in the government’s decision to ask Ex-Im to steer clear of the dam.