Prime Minister Bounnhang Vorachith told leaders in an opening speech to the Association of Southeast Asian Nations summit that host Laos is a landlocked country with few resources.

The government bills the $1.3 billion plans to build the Nam Theun 2 hydroelectric dam as the centerpiece of efforts to raise living standards of the country’s 5.7 million people, among the world’s poorest. The project has been held up for years amid criticism from
international environmental groups and social groups. They say the reservoir, created by the 48-meter-high dam across the Nam Theun River, would flood a 450-square-kilometer forest area. Thailand signed a contract earlier this year to buy 90 percent of the
electricity produced by the dam for 25 years, providing $200 million in annual revenues – about half of which would go to Laos’ communist government.

The World Bank must decide by May 2005 whether it will provide a guarantee protecting international investors – who would provide 70 percent of the funding – against the risk of investing in a communist country notorious for corruption and a weak legal system.

Agence France Presse meanwhile reported on Sunday (11/28) that Malaysian infrastructure group Gamuda signed an agreement with the Laotian government Sunday to develop a two-billion-ringgit ($526 million) hydropower dam project. Gamuda holds a 50 percent stake in the Nam Theun I hydroelectric power project in the northeastern province of Bolikhamxay, the Laotian government 20 percent and a Thai power company
the remaining 30 percent. The project comprises a dam and an adjacent power station with a capacity of 450 megawatts on the lower end of the Nam Theun river. A transmission line will be built to a delivery point at the border with Thailand, officials said. The project will be developed concurrently with another dam, the giant Nam Theun II and its 450-square-kilometre reservoir to be built some 250 kilometers southeast of Vientiane on the Nam Theun river.