The Wall Street Journal 7 November 2012
By BEN OTTO
XAYABURI, Laos—This tiny landlocked country has pushed ahead with a controversial project to dam the Mekong River, over the fears of neighboring countries that it will destroy the vital Southeast Asian waterway and damage the lives of as many as 60 million people.
Some of the work under way in September at the Xayaburi dam site. Officials in Laos have sought to calm neighbors' concerns, but say the project continues.
Laos, which wants to build the $3.8 billion Xayaburi dam to help vault itself upward from the status of one of the world's least-developed countries, invited dignitaries, investors and journalists to a ceremony Wednesday at the remote site to announce that it has redesigned the project to meet critics' objections.
Officials disputed whether the event could be billed as a groundbreaking; Prime Minister Thongsing Thammavong told The Wall Street Journal a day earlier that it was to be just a visit to the site. But ground has long been broken. Some $100 million has already been poured into preparatory construction, according to Viraphonh Viravong, the deputy minister of energy and mines. Engineers haven't yet built on the Mekong itself, and say they won't until the project enters its later stages several years from now.
"We will go ahead with developing hydropower," Mr. Viraphonh said Wednesday. "It will be costly, given the attention we pay to social and environmental concerns. But we will go ahead."
Laos, with gross domestic product of $7 billion, rudimentary industry and few resources besides minerals and timber, is staking its future on an ambitious plan to build up to 10 more hydropower plants on the Mekong in coming years. Mr. Viraphonh said his goal is to triple the country's hydroelectric production to 9,000 Megawatts by 2020.
The goal is to become a regional power source, selling power to countries including Thailand.
But critics including environmentalists and Mekong neighbors Thailand, Vietnam and Cambodia have expressed concern that the Xayaburi dam project will endanger fish species in the world's largest inland fishery and disrupt the flow of nutrient-rich silt downstream.
"If we allow them to have Xayaburi, then they will have another 10 dams in this river, and that will destroy all the ecology and fishing, and also all the agriculture along the river," said Prasarn Marukkapitak, a member of the Thai Senate. "Everything will be destroyed."
Mr. Prasarn, who sits on the Senate committee on good governance and corruption, said going ahead with the project "will create conflict in the region—especially for the people who build this dam and the residents beside the river who have a life in fishing."
Laos is trying to alleviate such concerns. Mr. Viraphonh, the deputy energy minister, said Wednesday that a redesign of the dam addresses the environmental concerns of the project, while adding $100 million to the cost.
He rejected many of the complaints, saying that Xayaburi, as a "run-of-river" dam, won't build up a large reservoir, greatly impede the flow of sediments or affect the shape of the river.
Buddhist monks led Wednesday's ceremony at the dam, with a VIP ribbon-cutting and the striking of an auspicious gong at the site, 105 miles northwest of the capital, Vientiane.
Near the river, giant cement-making cylinders are being prepared to replace temporary equipment, and along the water's edge the first stages of a navigation lock are under way.
Isolated digging in the river has begun to determine the depth and quality of the riverbed, said Knute Sierotzki, a lead engineer with the Poyry, a consultancy working with the dam builders. Gravel has been laid down on a sandbar to accommodate earth movers.
Xayaburi Power Co., the international public-private consortium for the project, has built at least one gasoline station and housing for managers, engineers and support staff, and set up conveyor belts and crushing operations for the limestone from a nearby quarry that is to be used in the 130-foot-high structure.
The 1,260-megawatt facility will be as big as an average U.S. plant, with the "capacity of an average European nuclear-power plant," providing electricity to about a million households in the very underdeveloped country, according to Austria's Group Andritz, ANDR.VI +0.76% which has been contracted to supply turbines.
Excavation work will continue this year, with the installation of concrete into the spillway tipped for late 2013, Mr. Viraphonh said. Construction of the powerhouse on the main part of the dam is scheduled by 2016, targeting completion in 2019.
The project, originally projected to cost $3.5 billion, is put at $3.8 billion because of increased costs and exchange-rate fluctuations, he said.
The campaign group International Rivers said the Xayaburi project violates international law because the 1995 Mekong River Agreement requires any country doing an international mainstream river project to get the agreement of affected countries.
Mr. Viraphonh said the Xayaburi project has met its obligations, and that the dam project requires only a process of prior consultation, which the 1995 agreement says isn't "a right to veto the use" of the river.
The ceremony hosted by Laos on Wednesday, with ambassadors from Cambodia and Thailand in attendance, was in part meant to explain to neighbors the engineering changes that Laos says have made the dam more environmentally friendly.
Cambodian Prime Minister Hun Sen on Tuesday said he supported Xayaburi's construction in principle—provided there was clear evidence it followed guidelines of the four-country Mekong River Commission and didn't harm Cambodia or the river.
Vietnamese officials weren't available for public comment.
Thailand's position is awkward. The country would be the biggest purchaser of the electricity from the dam, and Thai companies are involved in building it, but the dam has vocal opposition there. Government spokesman Thosaporn Serirak said Thailand supports the efforts by Laos to develop its economy.