Laos Defends Dam Project

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BANGKOK (Reuters) - Communist Laos defended a billion-dollar hydro-electric project on Tuesday against activists who insist Indochina's biggest dam will be a social and environmental disaster for the tiny, impoverished nation.

 

Laos officials told a World Bank (news - web sites) workshop in Bangkok the proposed Nam Theun 2 dam was the best option for development and fighting poverty in a nation where 70 percent of the people live on less than $2 a day.

 

 

"My government is committed to balancing development with conservation," Somboune Manolom, a senior Ministry of Industry and Handicrafts official, said in a bid to alleviate environmental concerns about the project.

 

The Bangkok meeting was the first in a series planned by the World Bank in Tokyo, Paris and Washington to seek input on the controversial dam.

 

Nam Theun 2 will have a generation capacity of 1,070 megawatts, with 95 percent of the power sold to Thailand, earning Laos some $80 million a year.

 

"Nam Theun 2 has the potential to deliver a significant, predictable revenue stream that will have a positive impact on national development," Somboune said.

 

However, the $1.4 billion project, to be built on a tributary of the Mekong River in central Laos, still needs a risk guarantee from the World Bank.

 

Critics say the dam will force thousands of people from their homes and threaten wildlife, including fish stocks in the Nam Theun river and endangered Asian elephants on the Nakai Plateau. An estimated 6,000 people will have to be resettled from flooded areas on the plateau, with another 40,000 people who live along the river affected.

 

Offsetting the impact of the project is a contractual obligation of dam operator Nam Theun 2 Power Co (NTPC).

 

"The commitments that the NTPC has in terms of social and environmental mitigation are binding," said NTPC chairman Jean-Pierre Serusclat.

 

THAI LEGACY

 

But environmentalists fear the mistakes of a controversial Thai dam built in the 1990s will be repeated.

 

"Nam Theun 2 is the Laotian version of Thailand's infamous Pak Mun Dam," said Tyson Roberts, a Bangkok-based researcher with the Smithsonian Tropical Research Institute.

 

Pak Mun was built on the Mun river, a tributary of the Mekong, in the 1990s but has never performed up to expectations. Local fishermen complained it damaged fish stocks severely and they angrily demanded compensation from the Thai government.

 

A 2000 study by the World Commission on Dams concluded that, with hindsight, the costs of the dam outweighed the benefits and it was unlikely that a dam would be built under similar circumstances now.

 

World Bank officials, who faced criticism from Thai NGOs for the bank's support for Pak Mun, said the lessons of past mistakes had been learned. "We are all aware that we have a legacy of unsuccessful stories in hydro development in the past 30 years. We are learning from these lessons," said Zhang Chaohua, a World Bank resettlement specialist.

 

EDF International, a unit of Electricite de France, holds a 35 percent stake in dam operator NTPC, while Thai construction firm Italian-Thai Development has 15 percent.

 

Electricity Generating Plc, an affiliate of Thailand's EGAT, and state-owned Electricite du Laos each own 25 percent.