7. 2 THE MEKONG COMMITTEE
7. 3 REGIONAL COOPERATION
7. 4 FOREIGN INTERESTS
7. 5 PLANNED DAM PROJECTS
7. 6 PAK MUN
7. 7 NAM THEUN / THEUN HINBOUN
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7. 1 THE MEKONG RIVER
The Mekong river, the tenth largest river in the world, has its origins in the highlands of Tibet. The first two thousand kilometres of the river, the Upper Mekong Basin, is in Chinese territory. The Upper Mekong Basin has a watershed of approximately 190 000 square kilometres. The river then flows 2 400 kilometres through Burma, Laos, Thailand and Cambodia before entering the South China Sea through the Nine-tailed Dragon, the huge delta in southern Vietnam. The 600 000 square kilometres draining into the Mekong from these countries is called the Lower Mekong Basin.
Hardly anywhere in the world do more people depend on one single river than in the Mekong region. Fifty million people live in the Lower Mekong Basin, and more than eighty percent of these are directly dependent on the Mekong river through fisheries and agriculture. On the Mekong delta in Vietnam alone, twenty million people depend on the river.
During the last decades, the Bangkok based Mekong Committee has prepared plans for developing an extensive system of dams on the Lower Mekong. However, wars, revolutions and political conflicts in the region made implementation of the original plans impossible. Plans for large dams were mostly shelved, and only a few of the smaller dams were built.
Political and economic changes in the area has led to revival of the development plans. The Mekong Committee revised the plans in 1988 (ICC, 1988). Cheap labour, extensive natural resources and a large hydropower potential makes the Mekong region a very interesting area for business investments.
7. 2 THE MEKONG COMMITTEE
In 1947, the Economic Commission on Asia and the Far East (ECAFE) was established under the United Nations. In 1956, ECAFE published a report suggesting several large dams on the Mekong. One year later the “Committee for Coordination of Investigations of the Lower Mekong Basin”, as the Mekong Committee is officially titled, was established, supported by ECAFE. The purpose of the Committee was to secure technical and financial support for the proposed projects. At the time, China was not a member of the UN, and so was not invited to have a seat in the Committee, while Burma was not interested. For a number of years, there was little activity in the Mekong Committee due to the political instability in the region, and in 1978 Cambodia withdrew from the Committee.
In the late eighties, political and economic changes led to renewed activity in the Mekong Committee, and today there are concrete plans for eleven dams on the Lower Mekong proper, and several times that number on its tributaries. In 1993 Cambodia returned to the Committee, and both Burma and China have been invited to have a seat.
In April 1995 Thailand, Laos, Vietnam and Cambodia signed an agreement to restructure the Mekong Committee and ensure continued international financing. The agreement, named The Cooperation for the Sustainable Development of the Mekong River Basin, may become the cornerstone for development of several large dams on the Mekong. Donor countries such as Sweden and Denmark has made restructuring of the Mekong Committee a condition of further funding.
Since the mid-eighties, the Committee has received its funding from the European Union, Sweden, Switzerland, Australia and United Nations Development Programme (UNDP). The Asia department of the Norwegian Ministry of Foreign Affairs describes the Mekong Committee as interesting, because of its potential for facilitating cooperation between the countries of Indochina.
The Mekong Committee has until now made no effort to study the opinions of the affected people in the project areas. Or as Chuck Lancaster, the former leader of the Committee, has put it: “We cannot run around all of Indochina asking people what their opinions are!”. The leaflet The Mekong Committee - A Historical Account describes the local peoples' level of education, lifestyles and economic traditions as "obstacles to the realisation of the plans".
7. 3 REGIONAL COOPERATION
The many proposed hydropower projects in the Lower Mekong Region are results of the closer economic cooperation between Thailand, Burma, Laos, Vietnam and China.
Thailand has a fast expanding economy, and an increasing demand for energy. Several of the proposed dams in neighbouring countries are meant for export of power to Thailand. Thailand is economically strong in Southeast Asia, and has a lot of influence in the Mekong Committee.
Laos is aiming to become a major regional exporter of hydropower, and is planning several hydropower plants to export electricity to Thailand. During the last years, export of power from the Nam Ngum dam has contributes eighty percent of Laos' total export earnings (Pearce, 1992).
Most of Burma lies outside the Mekong Basin, and the military regime in Burma makes many foreign companies hesitant to invest in this country. However, Thailand has given much attention lately to Burma’s water resources. In Burma too, several large dam projects are being planned to export power to Thailand, along with a project to divert water from the Salween river to Thailand. In 1993 Thailand and Burma made an agreement about economic development in the border areas.
Vietnam has become very interesting for western companies after the socialist government introduced a market oriented economy. Many development projects of different kinds are planned in the country, among them several hydropower projects.
The Asian Development Bank has made a report on economic cooperation in the so-called Sub-Region, consisting of Thailand, Burma, Laos, Vietnam and China. The report finds that energy could be a critical area for cooperation between the countries. According to the Thai newspaper The Nation (18. 5. 1993), energy production and especially hydropower is a major sector which holds great possibilities for economic cooperation.
Of the countries in the region, only Thailand has a developed community of non-governmental organisations participating actively in the public debate. In this country, strong criticism towards planned projects is raised in the relatively free press. In 1988 the environmental movement managed to stop the planned Nam Choan dam, which would have submerged large parts of two nature reserves. However, even in Thailand active opposition to the government can be quite risky. In rural areas, activists are regularly threatened and harassed, and several have been killed. In 1991, several activists were shot and wounded in a demonstration against the Pak Mun dam (see 7.6).
The established networks of cooperation on the Thai countryside are strong, as in the Muang Faai societies in which the villagers by means of councils and meetings manage the forest, water and natural resources. These societies apparently provide an effective organisational framework for the opposition to large dam projects. The main problem for this opposition is that information often is kept secret from the public, at least until decisions have been made.
In Burma and Cambodia, the political circumstances makes public participation in preparing and criticising development projects impossible.
7. 4 FOREIGN INTERESTS
The countries of Indochina do not have adequate knowledge and technology to build the large hydropower projects on their own. A number of international consultancy agencies are working hard to get assignments in the region. Among these are several Norwegian companies.
In 1993, the Norwegian company Norpower made the prefeasibility study for the Nam Theun I-II dam in Laos (see 7.7). The study was financed by the Norwegian Agency for Development Cooperation (NORAD) with 10 million Norwegian kroner (1.6 million US dollars). Since this, Norpower has merged with Norconsult, which has its own office in Bangkok and is constantly applying for funding from NORAD to win consultancy contracts in the region.
Kvaerner Hydropower has won the contract for turbines to the upgrading of the Bhumibol dam in Thailand. Asea-Brown Boweri (ABB), Statnett and Statkraft are other Norwegian firms (or firms with a Norwegian branch) interested in development of hydropower in the Lower Mekong Basin. Altogether, Southeast Asia is considered one of the most important markets for the Norwegian hydropower industry in the years to come.
Laos, Cambodia and Vietnam all depend on external financing for the realisation of their proposed projects. Thailand, while having resources enough to cover parts of their investments, also depends on external financing. This means that in many cases, the World Bank and the Asian Development Bank will have to support the projects if they are to be realised. Particularly the Asian Development Bank is taking an active part in expediting development plans for the Lower Mekong.
7. 5 PLANNED DAM PROJECTS
Yunnan Electric Power Bureau has plans ready for eight dams on the Upper Mekong, with a total installed capacity of 14 810 MW. Five of these are expected to be finalised within 2015. Surplus power from these projects will be exported to Thailand and Burma. China’s policy for managing the Upper Mekong water resources is remarkably arbitrary, and the plans for the dams on Mekong have not been discussed with the countries downstream.
Vietnam has plans for two dams, Yali Fall and Pleikrong, on the Mekong tributary Se San. The dams are designed to provide electricity for central and southern parts of the country. The main dam will be 65 metres high, and its reservoir will submerge approximately 6 500 hectares. The Norwegian consulting company Norconsult has reviewed the plans for this project, and has applied for financing from NORAD to make a revised feasibility study for the project. A power transmission line stretching 1 500 kilometres into central and southern Vietnam has been of interest to Norwegian industry, among others Statnett.
The Laotian government is very much in need of revenues from hydropower export, and has made plans for the Nam Tha, Nam Khan, Nam Ou, Nam Ngum, Nam Ngiep, Nam Theun/Theun Hinboun, Nam Song, Nam Mang and the Bolovens hydroelectric projects, intended to produce power for export to Thailand. The total hydropower potential in Laos has been estimated at 18 000 MW.
Nam Song, Nam Mang 3 and Theun Hinboun (see 7.7) are the projects given highest priority by the Laotian government.
Political stability is a prerequisite for future hydropower developments in Cambodia. However, several projects are presently under consideration and initial planning. One example is the Prek Thnot dam on Thnot River. The Electricity Generating Authority of Thailand (EGAT) is involved in the plans for a hydropower project at Battambang.
Thailand has already exhausted most of its easily accessible hydropower potential, making the remaining problematic and controversial to develop. The Thai government strongly wishes to build the Low Pa Mong dam on the Mekong. This dam, if built, would submerge areas in both Thailand and Laos, forcing the displacement of local populations in both countries. The Upper Chiang Khan, Bung Kan and Ban Koum dams are also planned on the border between Laos and Thailand. Independently of the plans for cooperation with other countries, Thailand has plans for diverting water from the Mekong to central areas of the country. The country is also redirecting the waters of the Mae Lamao river, a tributary of the Burmese Salween river. The redirected river is supposed to pass through two dams and a twenty kilometres long tunnel, with the purpose of increasing the capacity of the existing Bhumibol hydropower plant north-east of Bangkok. The Norwegian Kvaerner Hydropower company has been awarded contracts to supply turbines for the upgrading of the Bhumibol project.
Several plans exist for new dams in Burma, most of them along the Thai border. The Thai government, partly in cooperation with Burma's State Law and Order Restoration Council (SLORC), is planning a series of major water management schemes intended to increase Thailand’s supply of water and electricity.
By March 1995, a total of 23 proposed dams had been identified in the watershed of the Salween in Burma and in the border provinces of Thailand. Five water diversion projects have so far been studied by the Department of Energy Development and Promotion.
In a study financed by the Asian Development Bank, the Norwegian consulting company Norconsult International has identified nine potential dam projects in Burma. Human rights and environmental groups which are active in Burma and Thailand fear that these dams and related projects would have devastating impacts. The reservoirs would flood forest reserves, wildlife sanctuaries, villages and farmland on both sides of the border. People from local communities would be relocated from proposed reservoir areas and project sites. Many of the people along the Thai-Burmese border are already refugees or have been displaced from their villages to avoid persecution by the Burmese military. On the Thai side, few people have Thai citizenship papers or land title deeds, and it would be difficult for them to claim their rights and compensation for relocation, loss of land and livelihood, and other damages resulting from the development projects.
7. 6 PAK MUN
The Pak Mun dam is located six kilometres above the outlet of the Mun river into the Mekong. Construction of the dam began in May 1991, and was completed in November 1994. In December 1991 the World Bank approved financing for the Pak Mun project, despite protests from several thousand villagers. USA, Australia and Germany opposed the project in the World Bank because of social and environmental concerns, while Norway supported the project.
Mun is the largest tributary to the Mekong. The biodiversity of the Mun-Mekong system is surpassed only by that of the Amazon and possibly the river Zaire. The population along the Mun river consist of fishermen and rice farmers.
The Pak Mun dam is 17 metres high, creating a lake of 65 square kilometres within the 80 square kilometres Kaeng Tana national park. The beautiful rapids of the Mun river, which were blasted during the construction of the dam, used to be one of the greatest tourist attractions in Thailand. The rapids were the parts of the river richest in oxygen, and therefore the most important fishing area.
During the annual flood the flow of the Mekong is so strong that it reverses the flow of the Mun from July to September. The Mekong fish stock follows the flow of the river, migrating from the main river to the tributaries. Even though a fish ladder (the first of its kind in Southeast Asia) has been constructed, the dam appears to have blocked the seasonal migration of the more than 150 species of fish that once lived in the Mun river. Substantial declines in fish catches occurred in a matter of weeks after construction began. Since the completion of the dam, fish has all but disappeared from the Mun river.
The number of families affected by the Pak Mun dam was initially estimated by the Electricity Generating Authority of Thailand (EGAT) and the World Bank to be 248 families. A government committee recently admitted that the number now stands at 2 211 families, while the villagers insist that the number is 4 000 families, including 800 families downstream of the dam.
The resettlement site that was offered the affected families has been strongly criticised. The soil in this area consists of relatively coarse sand which does not allow cultivation of rice, and there is no nearby drinking water. The World Bank has made two demonstration farms to convince the villagers of the possibility of farming in the area, but both have been failures. Even with the dam completed and the reservoir full, not one family has so far moved to the resettlement site.
The World Bank operates with 136 MW as the power production capacity of the Pak Mun dam, but this figure represents the maximum capacity of the power station. According to EGAT figures, the station will have a mean production of 34 MW, with no more than 1 MW in the driest season. Today, Thailand’s total energy production capacity is 8 000 MW, and plans are made for an increase to 23 000 MW by the year 2005. In this scenario, the power from Pak Mun will not only be a drop in the ocean, it will also be an expensive one. A Thai report on energy conservation has shown that 3 000 MW could be saved within a time frame of ten years, also saving large investment costs. Within three years, 160 MW could be saved through energy conservation. The World Bank turned down the proposals for energy conservation measures, claiming that providing electricity this way would take too much time.
There has been strong resistance against the Pak Mun dam in the villages around the project area, and the villagers have campaigned against the project since the plans became known. In June 1989, the villagers submitted a letter to the Prime Minister, opposing the project. There was no response. In February 1991, 5 000 villagers protested in Ubon Ratchatani. A month later the Love the Mun River Group was formed. The group was the initiative of the villagers and its membership was composed entirely of villagers. In September 1991 representatives of the villagers sent a letter to the President of the World Bank.
NORAD visited the area in February 1992, and reports: "(...) The villagers whom we met claimed that they had been consistently excluded from any aspect of planning and decision-making regarding the Pak Mun project. They said that they were never consulted by EGAT nor given the opportunity to participate in making decisions that dealt with their environment and related to their means of livelihood."
In November 1994, more than 1 200 Mun river village people occupied the Pak Mun dam. The occupation followed more than six weeks of demonstrations by villagers demanding adequate compensation for the destruction of their fishing-based livelihoods.
7. 7 NAM THEUN / THEUN HINBOUN
The Laotian river Nam Theun is a tributary of Mekong. The Nam Theun 1, Nam Theun 2 and Theun Hinboun (previously called Nam Theun I-II) are three of the proposed projects on the river. The purpose of the projects is basically export of power to Thailand. Norwegian and Australian hydropower companies have strong interests in the proposed projects, with Norwegian companies concentrating on Theun Hinboun and Australian companies on Nam Theun 2.
Theun Hinboun was originally presented as an alternative to the controversial Nam Theun 2. The latter project, which would have an installed capacity of 600 MW, is planned in the area of indigenous peoples, and at least 3 000 of these would be displaced by the project. Its reservoir would submerge 500-700 square kilometres of virgin forest, and two unique areas planned for future nature reserves would also be affected. By the autumn of 1995 construction work was under preparation both on Theun Hinboun and on Nam Theun 2, and it seems obvious that Theun Hinboun will be an additional, not an alternative project to Nam Theun 2.
Another dam in the area, Nam Ngum, is rapidly silting up and has problems with low water supply. Proposals are now being made to divert rivers outside the catchment area into the dam.
The Asian Development Bank has agreed to make a soft loan of 60 million US dollars as part of the 280 million dollars needed to build the Theun Hinboun project (Water Power and Dam Construction, October 1994).
Norwegian companies are involved as consultants, builders, owners and financiers for the Theun Hinboun project. The Asian Development Bank is responsible for the main part of financing and coordination of the project, and has asked the Norwegian Agency for Development Cooperation (NORAD) to provide bilateral cofinancing.
NORAD financed the feasibility study on Theun Hinboun (then Nam Theun I-II), made by the Norwegian company Norpower in 1993. Due to strong criticism of the feasibility study, NORAD called for several supplementary studies to be made. However, NORAD decided that the supplementary studies should be carried out parallel to the Final Design of the dam. Norconsult is responsible for the Final Design, which has been cofinanced by NORAD with 35 million Norwegian kroner (5 million US dollars). The supplementary studies, coordinated by the Norwegian company Norplan, were finished in the late autumn of 1995. The supplementary environmental studies are not expected to have any serious impact on the project, as the Final Design has been conducted parallel to the studies and construction work is already being prepared. It will be too late to make any major changes at this stage, and the supplementary studies can therefore only give recommendations concerning mitigation measures.
Former Norwegian Minister of Oil and Energy, Vidkun Hveding, was one of the Laotian government’s key advisors involved in the plans for Nam Theun 2. NORAD also provided financing, through Norpower, for Mr. Hveding’s travels to Laos in connection with his work as advisor.
In 1993 the two state-owned companies Statkraft of Norway and Vattenfall of Sweden signed a memorandum of understanding on the construction of the Theun Hinboun dam, an agreement worth some two billion Norwegian kroner (310 million US dollars). This could open the doors for further hydropower contracts in the area, possibly worth as much as 15 billion Norwegian kroner.
Kvaerner is to deliver two Francis turbines, each with a capacity of 115 MW, to Theun Hinboun. The contract is worth 90 million Norwegian kroner (14 million US dollars). Kvaerner has applied for export guarantees from the Norwegian Guarantee Institute for Export Credits (GIEK) for its participation in the project.
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