AusAid backs Laos dam decision

AAP [Australian Associated Press] 22 April 2011 

By Ron Corben

Australia, a key donor to the four-nation Mekong River Commission (MRC), has backed a move to defer a decision on a controversial $US3.5 billion ($A3.28 billion) hydropower dam in northern Laos.

A meeting of officials from Cambodia, Laos, Thailand and Vietnam this week decided the issue would be sent for consideration at the ministerial level, in face of opposition from Laos' neighbouring countries including its closest ally, Vietnam.

Australia's development and overseas aid program, AusAid, said the decision was "in line with our calls for an extension to the decision-making process", and urged Mekong countries to "use this extension to further assess the trans-boundary impacts of the dam".

AusAid said key concerns were the impact on highly productive fisheries, food security, livelihoods and ecosystem health, which millions of people are dependent upon.

Laos is looking to develop the 1260 megawatt Xayaburi Dam, which is the first of 11 proposed hydropower developments on the lower Mekong River.

Environmental groups oppose the dam project and have warned it would adversly impact the Mekong River's ecology and water flow, cause the resettlement of more than 2100 people and directly affect a further 200,000 people.

Environmentalists - including Professor Phillip Hirsch from Sydney University, who is the director of the Mekong Resource Centre - say construction of the Xayaburi Dam would have a devastating impact on migratory fisheries and sediment capture and would make it extremely difficult to stop the juggernaut of the 10 other dams being built on the lower Mekong.

The Mekong River Commission, in a statement this week, said gaps remained in the technical knowledge and studies on the project.

It said more public consultations were required.

China has already constructed dams in the Mekong's upper regions but Vietnam fears dams in the lower river would directly affect water flows to the southern delta region, Vietnam's primary rice-growing area.

Cambodia has also raised concerns over the project, calling for comprehensive studies over the cumulative environmental impacts.

Birgit Vogel, a technical advisor with the commission, said these divisions highlighted differences in views on the outlook for economic development of lower Mekong River.

"This is exactly the reason why it was decided it would be wise to be take it forward to the ministerial level because of there were differences of opinion," Ms Vogel told AAP.

"So the advice from the ministerial meeting is really needed now to come to a conclusion after all," she said.

Jonathon Cornford, from Australian-based environmentalist group Manna Gum, said the commission's decision was better than he had expected just a year ago.

"At this stage last year I would have said it was a fait accompli they'll go ahead with (the dam)," Mr Cornford told AAP.

"So the position that we're in now is far better than I would have expected. So in one sense you could say I'm pleased with that. But I'm cautious about saying that because it's still very unclear," he said.

Thai Energy Minister, Wannarat Charnnukul, told local media the government would go ahead with signing of a power purchase agreement with the project's developer amid hopes the delays would be short term.

Laos already has a 2007 memorandum of understanding with Thailand to sell 95 per cent of the electricity generated by the dam to Thai power companies.

Ministers from Cambodia, Laos, Thailand and Vietnam, are due to meet in October when the Xayaburi Dam's future will again be raised.

© 2011 AAP