Laos temporarily suspends Xayaburi Dam

VietNamNet Bridge 9 May 2011

VietNamNet Bridge – On the sideline of the 18th Summit of the Association of Southeast Asian Nations (ASEAN) in Indonesia, Laos PM Thoongsing Thammavong informed his Vietnamese counterpart, Nguyen Tan Dung of Laos’ decision to temporarily suspend the Xayaburi hydropower project.

According to Vietnamplus, PM Dung had bilateral meetings with his Lao and Thai counterparts in Indonesia to promote bilateral ties and discuss regional and international issues of mutual-concerns.

In his meeting with Lao PM Thoongsing Thammavong, the two PMs agreed on the significance of the 33rd session of the Vietnam-Laos Joint Government Committee to bilateral relationship.

The two Government leaders reached consensus on furthering joint coordination in implementing the 2011-2010 cooperation strategy and the cooperation agreements for 2011 and 2011-2015.

PM Thoongsing Thammavong informed Dung of Laos’ decision to temporarily suspend the Sayabouri hydropower project.

PM Dung thanked the Lao Party and Government for this important decision, saying that the decision reflected the cooperation and deep consideration of the Lao Party and Government to Vietnam’s proposal.

The two leaders agreed to instruct relevant agencies to conduct joint research within the framework of the Mekong Commission, with the possible participation of experienced and prestigious international scientists to seek firm scientific ground for future decisions regarding the issue.

Vietnam wants to join Laos and Mekong countries, including upstream countries of China and Myanmar, in exploiting the river in a sustainable manner for the interest of each nation and the whole region, said Dung.

During his meeting with Thai Prime Minister Abhisit Vejjajiva, both sides expressed pleasure with the development in their friendship and bilateral cooperation in all areas in recent years, agreeing to maintain and promote all existing mechanisms in bilateral ties to promote multi-sided cooperation, especially in economics, trade and investment.

They discussed cooperation in management and sustainable use of water of the Mekong River.

PM Dung said Vietnam supports development and respects the right of exploiting the Mekong River’s potential of countries along the river to serve socio-economic development, raising  people’s living conditions.

But, he said, the development needs harmony which does not cause negative impacts on the development of countries along the river, especially lower basin nations.

The two PMs agreed that member countries of the Mekong River Commission should coordinate to study in a comprehensive manner to assess impacts of hydropower projects on the Mekong River’s main stream, and reach a consensus before deciding construction of projects on the river.

Regarding the border conflict between Thailand and Cambodia, PM Dung stressed as a neighbor of both countries and a fellow ASEAN member, Vietnam welcomes the two sides ceasefire and continuation of implementing commitments made at the unofficial ASEAN foreign ministers meeting in Jakarta on Feb. 22, including the dispatch of Indonesian observers to the border area.

Vietnam will continue to make positive contributions to the process, PM Dung affirmed.

In related news, banks that invest in the Xayaburi project said that they would only loan the project after fully considering the project’s environmental impacts.

The total investment capital for the 1,260 MW Xayaburi hydropower plant is estimated at 110 billion baht, including 80 billion baht (US$3.5 billion) provided by four Thai banks: Kasikornbank, Krung Thai Bank, Bangkok Bank and Siam Commercial Bank.

It is scheduled that the signing ceremony for capital lending between the four above banks and the project contractor Ch Karnchang (CK) will take place in May. However, banks now hesitate because of the public’s protest of the project due to its impacts on the environment.

Two weeks ago, the inter-governmental Mekong River Commission (MRC) held a Special Joint Committee meeting to decide whether to approve the proposed Xayaburi Dam, located on the Mekong River’s mainstream in Northern Lao PDR.

At the meeting, whilst Laos proposed to proceed with the dam, Thailand, Cambodia and Vietnam called for an extension to the decision-making process citing concerns about trans-boundary impacts and knowledge gaps that require further study and public consultation. The four governments agreed to defer the decision to a future Ministerial-level meeting.

Many groups from around the Mekong region have called for the Xayaburi Dam to be cancelled and for ASEAN to play more of a role in resolving differences between Mekong countries.

The Mekong River provides the people of the region with an abundance of natural resources, making it central to the livelihoods of millions of people and the lifeline of Southeast Asia.

The Mekong River’s central role in the lives, ecology and cultures of the region should place the river’s protection as a top priority for decision-makers to ensure sustainable economic growth, protect food security and promote regional peace and prosperity.

The Xayaburi Dam was first proposed in May 2007, when the Government of Laos signed a Memorandum of Understanding with the project’s lead developer, Thailand’s Ch. Karnchang Public Company.

A Project Development Agreement was later signed between the Lao government and Ch. Karnchang in November 2008. The dam is proposed to be built near the Kaeng Luang rapids, approximately 30 kilometers east of Xayaboury town in Northern Laos.

The Xayaburi Dam, if built, will affect the livelihoods and food security of millions of people in the region through changes to the river’s ecosystem, sediment flows and fisheries. The dam will threaten 23 to 100 migratory fish species by blocking migration routes. The dam also threatens the extinction of approximately 41 fish species, including the critically endangered Mekong Giant Catfish. Furthermore, the dam will forcibly resettle over 2,100 people and directly affect over 202,000 people.