Mekong Utility Watch

Southeast Asia’s biggest dams will have to go

The Nation
September 13, 1997

When 15 leaders of the 9,500 indigenous communities affected by Malaysia’s Bakun Dam received their compensation last month, they sent the cheques back to the government. One said he received a token Bt3.3, which made the cost of issuing the cheque higher than the compensated amount. No wonder opposition to Southeast Asia’s largest dam project continues despite the fact work has already begun.

Last week, the anti-dam advocates got what they wanted.

In a dramatic reversal, Prime Minister Mahathir Mohamad said the dam would be “indefinitely delayed”. That meant the project was as good as dead, for now. Mahathir’s backflip came not because of a new-found concern for the plight of the indigenous people who will see a pool big enough to sink Singapore in their ancestral home, but rather because the ringgit and stock market took a severe beating from investors who are wary of his grandiose projects.

Also scrapped are the ambitious “floating” airport off the northern coast, the three-kilometer-long Linear City which snakes above the Klang River — dubbed the world’s longest building — and a highway which cuts through the ecologically sensitive mountainous region in the heart of the peninsular. All of this is good news for the environment.

It is not good news for the indigenous people though. Their relocation will go ahead regardless. In an attempt to put a brave front, the government argued that Bakun’s woes will not affected future energy supplies. There are alternatives. But that begs an important question. Why Bakun if it is not necessary? The answer could lend support to the dark suggestion that Bakun was a sick excuse to log the rainforests and convert them into palm oil plantations.

With Bakun effectively shelved, all eyes are on what is now the biggest dam in Southeast Asia — Nam Theun 2 (NT2) in Laos. Planners hope that NT2 will catapult this poor and landlocked nation into the 21st century. But as with Bakun, the recent economic hiccup in Southeast Asia has also dealt a serious blow to Laos’ ambition. Economically hobbled Thailand — the main importer of electricity from NT2 — is now less able and willing.

That spells trouble for NT2. Even without the economic crisis, NT2 will pose problems for Laos. After all, big dams involved big risks. And big debts too. NT2 is expected to incur a debt of almost four times that of Laos’ national budget. And with Thailand on a belt tightening regime, it is clearly suicidal for Laos to press ahead with NT2. What’s more, this is only one of the 20 dams planned for the country.

The future of NT2 now lies with the World Bank. Laos needs the bank to give it a “risk guarantee” before it can raise US$1.5 billion from the private sector. The guarantee means that while the dam is funded privately, the bank will assume the risks of Laos negating its contractual agreements. This would be the first time that the World Bank would provide such a guarantee, in the hope it would spur private investments in poor economies.

The World Bank has made major blunders with big dams before. Recently, the bank was forced to pull out from the Narmada Dam in India and Arun III Dam in Nepal. This time, the bank vows to do this right. But if right is what the bank wants to do with NT2, surely it is to withdraw support for the project.

Over the past few decades, the West has been making a hard sell on two major electricity generation technologies to power hungry T hird World countries — nuclear and hydro. As harnesses of power, both have evoked great awe and admiration as human technological triumph over nature. In addition, such billion-dollar projects also promise great wealth to the political elites — from lucrative contracts to graft.

While nuclear power has created widespread fear of radiation leaks, hydro-power enjoys the reputation of being a cheap, clean and renewable energy. That opinion, however, is now being seriously challenged. Big dams, like nuclear power plants, have the potential to do great damage to the ecosystem, culture and livelihood of the indigenous peoples they displace.

The sooner that the World Bank and the political elites in Third World countries realise this, the better.

Categories: Mekong Utility Watch

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