Mekong Utility Watch

Lao Nam Theun dam project on global tour to convince opponents

August 29, 2004

A long-delayed plan to build a gigantic dam in Laos comes under international scrutiny this week as the World Bank is hosting a series of consultations in a bid to win over a host of opponents of the controversial project.

Hanoi: A long-delayed plan to build a gigantic dam in Laos comes under international scrutiny this week as the World Bank is hosting a series of consultations in a bid to win over a host of opponents of the controversial project.

The first stop will be on Tuesday in Thailand, which has already signed a five-billion-dollar contract to buy electricity produced by the Nam Theun II dam for 25 years.

The tour then moves on to Tokyo, Paris and Washington before ending in the Lao capital Vientiane on September 24. The trip promises to yield lively debates, bringing together
proponents and critics of the project in workshops that will gather government agencies and non-governmental groups, journalists and experts, environmentalists and private companies.

One major concern relates to the social impact the 1.3 billion-dollar project will have on 5,700 people who will be forced to leave their homes to make way for the dam, intended to start generating electricity from 2009.

Others concerns involve its impact on the environment, its economic rationale and the government’s management of the significant investment funds.

While there are some who merely want to ensure it is handled responsibly, others are against it going ahead at all.

“There are a few NGOs who just don’t like hydroelectric projects, they don’t like the World Bank and they would not support this project,” said a foreign expert who wished to remain anonymous.

“Many may want to turn this debate into one of ideology.”

“This is really a test case, a model for infrastructure projects,” he said.

The dam is to be built some 250 kilometres (160 miles) southeast of Vientiane on the Nam Theun, a tributary of the Mekong river which cuts across much of Indochina.

It requires a financial guarantee from the World Bank which, under pressure particularly from environmental protection groups, has made its support conditional on rigorous social and environmental criteria.

“The World Bank required these consultations of us,” said Nam Theun II Power Co. Ltd. (NTPC) spokesman Ludovic Delplanque. “It’s an exercise of good governance for the Lao government and its private partner.”

“Nam Theun II is almost a research laboratory in term of sustainable development. Never to my knowledge have the studies been pursued so long,” he said.

Project developer NTPC is an international consortium comprising Electricite de France International, which has a 35 percent stake, Laos Electricity (25 percent), listed Thai firm Electricity Generating Authority of Thailand (25 percent) and Italian-Thai Development Public Co. Ltd. (15 percent).

The World Bank has to make a decision by May 2005 to allow work to commence on schedule.

Indeed seldom have so many reports, studies, assessments, debates been necessary for a construction project of this type.

The project is important to Laos, which has based a good part of its development strategy in the coming years on income from the dam. It is also important for Thailand, which is counting on it to provide electricity to 17 provinces from 2009 and reduce its dependence on imported oil.

But it is even more important for the World Bank. The Nam Theun dam is its first major infrastructure project since the 1980s when it left this arena of development to the private sector.

“These meetings are a way for the bank, which is very aware about its image problems, to show that there is a lot of transparency around the project,” said someone close to the matter.

In Vientiane, the communist authorities realise this will be a test of their ability to prove their management abilities and transparency.

“We have made a lot of progress on this point, our financial system and our national treasury are in the process of being reformed,” said foreign ministry spokesman Yong Chanthalangsy. “And we still have time for further progress by 2009.”

But no one appears to doubt the final outcome of the exhaustive consultations: the dam, everyone agrees, will see the light of day.

“Everyone has done a lot of work. I believe we are at the point of no return,” said the Lao official.

Categories: Mekong Utility Watch

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