Grainne Ryder
January 18, 2006

The World Bank has given China’s second-largest hydro project a satisfactory rating on the resettlement of 46,000 people, despite having no data to assess whether anyone is better or worse off. The US$2.2-billion Ertan dam on the Yalong River in Sichuan, now in its eighth year of operation, received more than US billion in loans and a decade of technical assistance from the WB, the biggest loan package ever extended by the world’s leading financier of large dams. But a performance assessment by the WB’s Operations Evaluation Department last year concluded that it is “impossible to quantify the degree of progress [on resettlement at Ertan] or the extent of the income shortfall of those resettled” because no income data was collected from resettled households. Bank policy stipulates that bank-funded dam projects must boost the incomes of resettlers to higher than pre-project levels. Of the 46,000 people moved, about 4,000 people had to be moved a second time because the land allocated to them was either prone to landslide damage or too poor to farm. Another 900 people are still waiting for replacement land more than a decade after the WB approved the project. Despite the lack of data, the bank’s assessment team concluded that “resettlement appears to have been successful” based on observations in one resettlement village they visited. The Ertan resettlement programme cost nearly US$300 million or US$6,300 per person, about three times the original budget approved by the WB. This included US$64 million for “independent monitoring and evaluation” led by a panel of international resettlement and environmental experts hired by the WB. The panel “proved its worth”, the report says without elaborating. In addition to the official resettlement budget, Ertan Hydropower Development Corporation has imposed a 10-year surcharge of 0.003 yuan per kilowatt-hour on power consumers, which could amount US$56 million over 10 years. The funds are supposed to go toward environmental protection around the reservoir, infrastructure maintenance and “income-boosting activities for the resettlement villages”. No accounting of how the resettlement funds were spent or how the 46,000 people resettled would rate the programme is offered. With an installed capacity of 3300 MW, Ertan was China’s largest hydro plant until the Three Gorges Dam came onstream in 2003. Gráinne Ryder is policy director at Probe International and editor of “Damming the Three Gorges: What Dam Builders Don’t Want You to Know,” published by Earthscan in 1993. To read Gráinne Ryder’s full review of the World Bank’s Project Performance Assessment Report on the People’s Republic of China Ertan Hydroelectric Project Loans I & II, World Bank Operations Evaluation Department, please see: www.threegorgesprobe.org/tgp/index.cfm?DSP=content&ContentID=14558.