Monday, 28 January 2013

Controversial Xayaburi dam project breaks ground in Laos

Despite intense criticism, the Thai company contracted to build the controversial Xayaburi hydroelectric dam, CH. Karnchang, will continue to work on the enormous construction contravening calls for a moratorium.

The Xayaburi dam will be built on the Lower Mekong River in the tiny land-locked country of Laos, but the Mekong River as a whole stretches south to the delta region through three other sovereign countries.

Vietnam and Cambodia each have their reasons for opposing the project. As in most Southeast Asian countries, patron politics quickly reveals itself as a driving factor in underlying tensions.
Thailand has been at the centre of the project since the agreement for construction was first signed in 2010, itself a revived plan first drafted in the 1950s. The plan calls for 20 hydroelectric plants over the next ten years, markedly increasing Laos’ energy output.

Thailand’s involvement in the project is being encouraged by China, which sees any loosening of influence from Vietnam over Laos as a step in the right direction.

Both Thailand and Laos are adamant the dam project will cause no harm to the downriver countries of Cambodia and Vietnam. Officials in Phnom Penh and Hanoi who live closer to the crucial agricultural breadbaskets of the Mekong Basin aren’t as convinced.

In response to the project, the Mekong River Commission (MRC), representing Vietnam, Cambodia, Laos and Thailand together, released a review underlining the negative consequences for downriver agriculture if the dam projects go ahead and the potentially disastrous environmental impact. The review’s conclusion was echoed by the United States and Australia who ultimately recommended a 10 year halt to construction.

But according to satellite imagery and ground photography, the project is underway regardless of the MRC’s agreement. Some $100 million has already been fed into the project and ground has been broken. Thailand and Laos have given no indication of concern for as many as 60 million people living downriver with the potential to be negatively affected if the dam project is completed.

While the serious humanitarian and environmental concerns of the downriver countries should be heeded and considered, Laos has understandable geopolitically-personal reasons for wanting to push ahead with the project.

Given the nature of Laos’ geography, the dam project represents the country’s economic future. Without it, the nation must remain in the clutches of larger regional powers and wallow in underdevelopment as one of Southeast Asia’s lowest performing economies. With it, Laos will be able to export energy to surrounding countries at a crucial time just when they are growing most rapidly and in dire need of new energy sources.

In many ways Laos is set to become the “battery of Southeast Asia”, that is, if projects such as the Xayaburi dam can be constructed on their terms.

For Thailand the dam construction agreement with Laos in 2010 allotted 95% of the energy generated to be sold to Thailand, presumably supplying a suitable incentive to override the MRC’s 10 year moratorium. Thailand is slowly being replaced by China as Laos’ largest foreign investor, a story common throughout the region, but Bangkok still retains influence over the dam projects set to start in earnest within the next few years.

Dams do not come cheap, and with an investment of NZ$4.19 billion, the Laotian capital Vientiane’s estimates of tripling its current hydroelectricity potential output should return a steady profit in the years ahead. A further ten plants are reportedly in the works positioned along the snaking Mekong River.

The story of the Xayaburi dam, and its many planned sister dams, is ultimately one of Southeast Asia.

As the region’s economies continue to grow, so does their demand for energy. Thailand is not a rich country but is prepared to front a good portion of the multi-billion dollar capital needed for the dam just to secure an energy source for the future. Bangkok estimates its economy will grow 4.22% through 2030, and it has been searching for new energy sources for years.

Yet if water is regulated by the dams it will fundamentally change a river system that millions of people depend on for their livelihood. Farms producing rice and even fisheries will struggle to cope with the intermittent river flow.

For countries beginning to look at their natural resources as potential gateways to greater economic health, rivers such as the Mekong drive home the need for an energy planning approach to a natural resource system with multiple uses.

The imperative of securing energy for economic development, so desperately needed throughout Southeast Asia, must be balanced by environmental concerns and food security for the very people meant to benefit from increased energy imports.

No comments: