Southeast Asian nations to discuss Laos dam

The Wall Street Journal 18 April 2011

By PATRICK BARTA

BANGKOK—A battle over plans for a giant dam across the Mekong River is highlighting the increasingly complex energy issues facing developing-world economies, especially after hopes for more nuclear power have dimmed following the recent tsunami disaster in Japan.

Thailand, Vietnam, Cambodia and Laos are expected to meet Tuesday in the Laotian capital of Vientiane to debate and possibly decide whether Laos should proceed with the $3.5 billion 1,260-megawatt dam, called Xayaburi, as part of a wider effort to turn the Mekong into the world's next big source of power. Laos hopes to use revenues from Xayaburi and other dams to drive economic growth in what remains one of the world's least-developed countries, while Thailand is expected to be the main buyer.

But environmentalists and some government officials, especially in Vietnam, are wary. They say the project will damage downstream fishing areas—a major worry given the rising anxiety over food security in Asia—and force some residents to abandon river communities.

The dam also could set a precedent for further development on the Mekong, activists fear, and accelerate the construction of 10 or more other dam projects proposed in recent years for the river's main stream, mainly in Laos and Cambodia. A study released by the Mekong River Commission, created by the four Southeast Asian countries in 1995 to help manage the river, found late last year that if the dams were built, they would "fundamentally undermine the abundance, productivity and diversity of the Mekong fish resources," affecting millions of people, and jeopardize farming operations, further threatening food supplies.

The group said the dams also would widen the gap between rich and poor, and it recommended a 10-year moratorium on dam-building so that more study can be done.

Southeast Asian nations "are in a position to cut their own throats," with the proposed Mekong dam projects, said Richard Cronin, director of the Southeast Asia program at the Stimson Institute, a Washington, D.C.-based non-profit group that studies security issues. "It's not in anybody's interests to see a disaster in food security" caused by hydro dams, he said.

Southeast Asian nations have long argued over how best to develop the Mekong, which remains one of the last major rivers world-wide that isn't dammed through most of its length, though it has dams in its upper reaches in China. Under the 1995 deal that created the Mekong River Commission, Laos, Thailand, Cambodia and Vietnam agreed to consult one another whenever one of them planned a major dam project. Although no country can veto another's plans, analysts believe it would be hard for one of them—especially a country as small as Laos—to proceed if a neighbor strongly objected.

It wasn't immediately possible to reach a Laos government spokesman for comment on the project. In a statement in February, the government said Xayaburi, to be located in the jungles of northern Laos, was an "environmentally friendly hydroelectric project" that would "not have any significant impact on the Mekong mainstream," the Associated Press reported. It added, "we are excited about this project."

Vietnam, by contrast, has made clear it fears the dam could hurt its famous Mekong River delta, where residents rely heavily on its waters for survival.

"There still is a lack of appropriate and comprehensive assessments of the transboundary and cumulative impacts of the project," said Truong Hong Tien, deputy director general of the Vietnam National Mekong Committee, a division of Vietnam's environment ministry. He said he "strongly recommends" the dam be delayed.

A Thai government spokesman confirmed the country's energy ministry is interested in buying power from Xayaburi but said officials want more information on environmental impacts. It wasn't immediately possible to reach a spokesman for Cambodia.

Despite some of the misgivings in Vietnam and elsewhere, Southeast Asian nations have a long history of avoiding interference in one another's affairs, and they may ultimately decide to let the project go ahead given their expected energy demand—and declining options for meeting it.

Power demand in the region is expected to grow 6%-7% a year through 2025, driven mainly by Thailand and Vietnam, its two dominant economies. Both countries expect to face significant energy shortfalls in the future, and hydropower is seen as one of the most reliable ways to close the gap—especially as worries over nuclear power grow in the aftermath of Japan's Fukushima Daiichi disaster in recent weeks.

In Thailand, especially, tapping Laos's hydropower potential would allow officials to bypass more controversial alternatives at home. As the country of 65 million has become wealthier, its population has also become more environmentally conscious, with residents vigorously opposing new coal-fired and domestic hydroelectricity plants because of fears they would create pollution or upset ecosystems.

As for nuclear power, Prime Minister Abhisit Vejjajiva and other officials have indicated in recent weeks that they are rethinking whether to proceed with the country's first-ever nuclear plant by 2020.

Vietnam has said it intends to continue developing several nuclear-power plants, but analysts have said they believe the projects could face delays.

Interest in developing the Mekong and its tributaries as power sources has intensified in recent years. China has added three dams across upper portions of the Mekong outside of Southeast Asia, despite opposition from downstream governments. Laos and Myanmar have launched numerous dam projects on their rivers in recent years, including tributaries of the Mekong, such as a $1.3 billion Nam Theun 2 project in central Laos that was built with support from the World Bank over the past several years despite criticism from environmentalists. That project officially opened last year.

Environmentalists say it's still too early to tell the full long-term impacts of those dams.

—Nguyen Anh Thu contributed to this article.

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