Mekong Utility Watch

Dam ‘villain’ ponders their future

The Nation
November 26, 2000

Today, few projects have gone ahead without first being subject to severe scrutiny from environmentalists and communities, and even then few have continued beyond the planning stage.

The dam-building industry began in earnest with the end of the Second World War, a time when political leaders saw hydro dams as a crucial means to nation building.

Since the 1950s, about 45,000 large dams more than 15 metres high have been constructed on rivers around the globe.

Today, however, few projects have gone ahead without first being subject to severe scrutiny from environmentalists and communities, and even then few have continued beyond the planning stage.

The launch of the World Bank-sponsored World Commission on Dams (WCD) two years ago was seen as the first attempt to review the performance of 1,000 dams in 79 countries. Sitting on the commission were both “heroes” and “villains” in the dam controversies.

Among the alleged villains was Jan Veltrop, honorary president of the US-based International Commission on Large Dams (ICOLD), the grouping of global key players in the dam industry.

Veltrop joined other WCD commissioners for the launch of their final report in Bangkok on Friday. He spoke with The Nation’s Nantiya Tangwisutijit on whether the findings would make any difference in the way dam builders did business.

The WCD concluded that large dams had typically fallen short of economic targets. Most of the projects have 50-per-cent cost overruns. How do you, as a prominent figure from the industry, explain this?

Cost overruns are sometimes due to underestimating geological conditions. Another problem is that a project owner, government and bank tend not to spend a lot of initial money [for the feasibility studies]. They don’t want to see the project too expensive or else they won’t approve it.

But cost overruns can arise for political reasons. The problem at the Narmada dam [in India] is simply due to the fact that the project construction was halted by protests and objections. Why objections? Because they [local people] were not asked when the project was planned. I would certainly hope the government of India changes its approach.

If opposing communities were initially asked, and still they insisted they did not want the project at all, would their opinion be respected?

Then you have a real national problem. The next question is the national interest. This can only be decided by full participation of the opposing groups and the beneficiary groups.

[If the dam is built,] the bottom line is that affected people must be the first to benefit. They must have their livelihood restored. Financial compensation is not enough. That’s an old-fashioned [approach] initiated in the 1960s. People must be able to choose their way of life.

How does the ICOLD, as the most prominent grouping of the dam industry, respond to WCD criticism of dam failure and the impact on people and ecology?

We expect the dam industry, manufacturers of equipment and engineering consulting agencies to recognise the recommendation made by WCD. The ICOLD is expected to come up with a position paper by end of this year, and we are waiting for that.

Is it possible for a dam construction and consulting firm to refuse to build a project if it is not socially and environmentally sound as defied in the WCD new guideline?

This is a bread-and-butter issue. For us in the industry, a project means potential income. The industry has a lot of engineers to feed. They may reject some projects on ethical grounds, but I hesitate to say how many.

Will the industry face more pressure if civil-society groups insist that a project’s costs from now on must reflect social and environmental costs?

This is another crucial question we have to face. A lot of social costs are relatively easy. Environmental cost is much more difficult – how to put a monetary value on the environment. There are a lot of interesting tricks involved. The cost for the loss of fish can be estimated from the market value. But the importance of a tree is much more difficult [to quantify]. Several academic institutions are studying this problem.

But wherever costs are not feasible, those issues should be presented along with the final cost estimation of a project. Decision-makers will have to weigh how much they can afford to lose. But I never have to deal with that.

There is an interesting demand to the World Bank that budgets for social and environmental mitigation should be separated from the construction costs. This is to make sure that people working on mitigation know they have money available even though the construction costs increase.

But will hydropower, normally regarded as the cheapest source of energy, become more expensive when social and environmental costs are added?

You have to compare it to the social and environmental costs of, say, a thermal plant as well. The costs to the environment and public health from the emission of CO2 and SO2 are not very well known either.

Categories: Mekong Utility Watch

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