This week in Vietnam
July 2, 2001

Cost, flooding, relocation, environment, and security are likely just the tip of the iceberg of the delays and worries surrounding what will be Southeast Asia’s largest hydro power plant, Son La, if it actually goes forward.

Worried about cost, flooding, relocation, environmental, security, and other issues, the NA has asked for more research on the giant Son La hydropower project. This is likely just the tip of the iceberg of the delays and worries about what would be Southeast Asia’s largest hydro power plant. Providing of course, it actually goes forward. Several members of the National Assembly (NA) have already come up with numerous reasons why it should not.

The NA’s decision on the controversial multi-billion dollar hydro power plant is to not yet make a decision. It has asked the Government to do more research and said it would make a final decision on the project design when it meets again at the end of this year.

Part of the complications is that there is not a single project design to be voted on. Industry Minister Dang Vu Chu has presented three options for the Son La hydropower plant. The three options differ in price, height, reservoir size, environmental impact, MW output, and a series of other issues including the number of people that will need to be relocated.

Two of the designs call for a dam that is either 265m or 215m in height. A third design is for a much smaller dam that is also further downstream from the proposed site of the first dam. Chu said the higher dam would cut 20 percent of the production cost to VND379 per kWh from the VND476 per kWh that the lower design will entail. The higher dam will also create a larger reservoir (21.8 billion cu.m) which can prevent floods and protect the downstream 1,920MW Hoa Binh Plant. It will also meet the demand of 15.2 billion cu.m of water to be made available for irrigation by 2040.

The reservoir formed by the 215m-high dam will not be able to contain the 10 billion cu.m of water needed or resist the 500 or 1,000 year cyclical floods. It will also not be able to provide enough water for the lower reaches of the basin during the dry season.

The killer difference is the financial and social costs of the higher dam compared to the lower and smaller options. The higher dam would require a colossal investment of about $4 billion. It will cause more damage to the environment by submerging 440 square kilometers of land and uproot 100,000 local farmers, most of whom are ethnic minorities. There is also a security concern since the dam is in an earthquake zone and could feasibly be susceptible to a military strike.

“If too much water were to cause a breach in the dam, the downstream Hoa Binh (dam) would collapse and, within two hours after that, all buildings in Hanoi of five stories or less would be totally inundated,” one delegate told the Saigon Times Daily.

Other MPs criticized the scale of disruption that would be caused to the province’s mainly ethnic minority inhabitants. “We cannot support the price that will have to be paid by local residents for the project’s construction,” said MP Cu Hoa Van. Some delegates also expressed their doubts about the cost for such a mammoth project. Where could Vietnam possibly find enough funding for the project since such a large displacement of people would probably deter most donor countries and multi-lateral agencies from providing funds.

Finally, in a debate that would be of interest to Vietnam‘s gas companies, delegates also questioned why they were still talking about building huge hydropower stations when the government had just signed off on a $1.4 billion gas utilization project with BP. The gas derived from BP’s Nam Con Son gas project will provide the fuel to power up to 40 percent of the country’s electricity needs. This is just from one gas field that BP intends to commercialize. The Gulf of Thailand, where Unocal and Petronas have a commercial gas field ready to be exploited, also has very promising gas potential. With so much gas, why all the talk about more hydro?

The NA debate is healthy, and a bit unusual. It is one more sign that Vietnam’s National Assembly is developing some teeth and critically listening to its “expert advisors” – foreign or local – and acting on the advice after debate. For example last month, Hanoi authorities rejected a $32 million project to change Ho Tay (West Lake)’s polluted water with water pumped from the Red River. This was after the project had been approved by the Government, but the Hanoi officials threw it out after getting more advice on the project’s impacts.

At the end of the day, even a high-stakes gambler would be hesitant to place money on Son La. The debate should continue. The NA should also look at other options to large scale hydro such as gas-fired generation. With the BP project due to begin construction in July, the country needs another milestone to shoot for. A second Phu My unit, perhaps in the Mekong Delta, would be worth considering.