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Wet dreaming

By Melinda Boh - posted Wednesday, 1 August 2012

"Look I dunno what the hell's really going on in Sayaboury" the late American agricultural economist Charles Alton grumbled. "There is so much conflicting information and lack of transparency; and of course you can't ask, as it's so damned sensitive." That he and many others, also chose not to be identified, is a mark of how 'sensitive' the Sayaboury dam in Laos continues to be.

In last week's stories on the BBC and in The Economist have highlighted how controversial this dam is. Regional discussion forums have also generated a lot of conjectural heat. It is apparent that lies and videotape if not sex, are part of the scene as are elements of a French farce.

The authoritarian Lao government, unused to public scrutiny or questioning, has been at pains to play at transparency, while at the same time offering conflicting accounts of what is and about to happen. Despite evidence to the contrary from Lao and expatriates who have been observing the considerably advanced work, the government has repeated the mantra that work will not go ahead until all environmental studies have been done. Well they were. A strategic environmental study lead by Australian consultant Dr Jeremy Carew Reid recommended a ten year moratorium. The Lao government and dam principle contractor hired a Finnish firm Poyry whose findings gave a warm smile to the project. Poyry was later blacklisted by the World Bank.


The controversial dam will be situated on the Mekong River, south of the World Heritage city of Luang Prabang.

The Mekong is a river of legends, of tales told in conflict. It hosts glorious sunsets, holiday romance, questionable whiskey and slow boats. The Mekong is amongst the world's ten largest rivers and an Asian icon. It runs through some poor nations and the poor parts of wealthy nations like Thailand. Over 60 million people depend on the Mekong for food but it is estimated that around 300 million may also use the brown swirling waters for irrigation, transport and domestic water.

Sacred to most Mekong basin people, damming the Lower Mekong may be like installing a diesel turbine into St Patrick's.

Damned Dam

In legal terms work is supposed to have ceased on the dam itself after a deferment was declared by the Lao national government in December 2011 which followed an earlier moratorium in April, 2011. However, a Lao engineer working on another project near the site, reports that work is proceeding. Tellingly, transmission lines are still under construction and the road connection to Thailand almost complete. Andrew Bigham, an agricultural consultant said, "That's the give away. If the dam wasn't going ahead why should they continue building transmission lines?" since then work had proceeded on the coffer dam used to divert the water while the dam is constructed.

The conservation group International Rivers announced that over 22,000 people around the world has signed a petition opposing the Sayaboury dam. Laos, a nominally socialist country retains it secretiveness and paranoid control on information. Virtually all media is government owned and controlled, so the global protest was not reported, nor is it likely to make any difference.

"A ten year moratorium is absolutely critical to relieve the pressure for mainstream damming." said Australian Jeremy Carew Reid in Hanoi. Carew Reid, a prominent environmental professional was team leader of the 2010 MRC commissioned Strategic Environmental Assessment. " Ten years was a compromise. The SEA report would have been rejected politically if we had called for a total ban, which evidence suggests would be the preferred option. The member nations were inclined to go for no more than five years. We all felt that ten years was long enough to cool off or disconnect the current wave of developer proposals and financing negotiations."


A lot of informed Lao, are very concerned about the Sayaboury dam, the first of the many dams planned for the Lower Mekong and worry it is a harbinger for more Chinese construction. Many NGO's, natural scientists included, harbour what seems to be a rather naïve assumption that rationality will prevail.

There is sufficient evidence to indicate that the dam represents a complex mélange of elite interests, and a renegotiation of regional power structures. Observers have suggested that being the 'battery of Asia' is far better than being the 'hayseed of Asia', and accords Lao improved regional status. By ensuring energy dependency, Lao could have greater regional leverage and prestige, despite the potential PR disaster of an ecological calamity and public resistance.

Magsaysay Award winner Sombath Somphone wrote in an email ;

It has been a common practice here, that the private sector invests or starts working on a project before official approval (is given)... The private sector sees it as a gamble to win sympathy of "soft-hearted" officials…they usually get the concessions or the approvals at the end. The officials often use the excuse that the private sector had invested so much already they might as well give them the concession. Cho Karnchang, (the contractor) is doing exactly that at the moment. It is an oriental way of lobbying.

Hard Line

While a lot is said about transboundary negotiations and consultations, the most comprehensive being a report by Portland State University and Mae Fah Luang University in Chiang Mai, the Lao government's inclinations are not to consult or seek agreement. Despite dropping Communist or even revolutionary from descriptors of its government, Lao's ruling Party of wealthy elites depends for its stability and power on hard line control. Premrudee Daoroung of TERRA, reported that at noisy consultative meetings in Thailand in 2010, the people of Pak Moon, radicalized by a devastating Thai dam, suggested they meet the potentially effected Lao people in order to warn them of its implications. "They and the other Thais were unanimous in their condemnation of the dam, causing the representatives of the Lao People's Democratic Republic to ask the organizers to silence them. The Thai organisers reminded the Lao officials that this consultation was demanded by MRC guidelines, and that in Thailand people can protest."

The Lao people however were not consulted. Australia funded the consultations as part of its commitment to the Mekong River Commission, but the Australian embassy in Vientiane has been repeatedly vague and bureaucratic when asked about their reactions to this oversight.

The plethora of expensive cars and bizarre Mc Mansions in Asia's Least Developed Country is evidence that someone is making money. Who makes it has not changed much since1995. A Lao lecturer in sociology recently confided that it was popular gossip around the National University that in order to secure a private sector contract one had to pay the relevant Minister five cars.

"Thai companies, such as Ch Karnchang are now expanding aggressively after Thai political problems and floods reduced local investment. The contract for the Xayaburi Dam hydropower plant, could be worth tens of billions of baht, and with the politicians and possibly even higher people involved, it is difficult to stop it. They are like elephants, they may stand for a while under a tree, but they will soon move again." said Thai activist Pornthip Soumalee.

Witoon Pemlpongsacharoen Director of Bangkok based TERRA, suggested a few months ago, "The energy is not needed. Thailand has regular 'power panics' to the advantage of the Thai stock market who wish to keep investments flowing. Banks and financiers talk CSR and then fund bad projects where people don't have rights."

" Don't forget that the construction company Ch Karnchang, its subsidiaries and the banks that back it, are all connected to big Thai families and the Democratic party."

"Ch. Karnchang have just sold 2% to PPT owned by the Thai government, 10 % to another part of themselves and 12.5 % to EGCO, which means that Thai energy interests are sitting on both sides of the table," he added.

Phillip Astelle, retired environmental economist said, "All other factors such as obvious impoverishment of people and the environment become economic externalities and burden shifting. The Strategic Environmental Assessment (SEA) has clearly shown that people will be made significantly poorer by the dam, so all this talk by the Lao government about poverty reduction is duplicitous. They sacrifice the environment to provide electricity surplus and money to the already wealthy. Sayaboury will effectively be a non performing asset."

"EGAT (Electricity Generating Authority of Thailand) and EGCO (Electricity Generating Public Company) bought shares in EDL (Electricité Du Laos) when it went public. There is no public participation in these deals even though there is blatant conflict of interest, as EGAT buys from its own companies." Pemlpongsacharoen concluded.

But pro dam consultant William T Smith's op-ed to the Bangkok Post earlier this year trashed environmental concerns, dismissing the views of luminaries like Carew Reid, and Richard Stone's carefully articulated article inScience. Smith was part of the World bank team backing the socially devastating Nam Theun 2 dam. But it was his conclusion about river bank erosion that exposed elite thinking.

The photograph shows typical dam linked bank erosion downstream of Lao's Theun Hinboun dam. Smith dismisses claims that the Sayaboury risks similar bank erosion, saying that what will be lost is insignificant. He is possibly correct. What he misses is the meaning that loss has to the farmer, whose labour is suddenly converted to slumped silt and whose family might be depending on the harvest and the cumulative effect of the accelerated siltation. There are no greengrocers in rural Lao, much less social security schemes. The land is all people have and as more is converted to dubious plantations, food security becomes an overriding concern. Smith's view is typical of those whose life is defined by plane schedules and room service. An equivalent event for him may be to have his rolling office nicked in the airport toilet. Only a small loss in the scale of airport theft, but to him devastating.

Astelle went on. "As far as I know no one has done a study of downstream economic losses. For instance even if the erosion loss is one meter on either bank, we have to multiply that by the thousand odd kilometers of river length. The loss is not evenly spread. Some countries like Vietnam will be disproportionately effected by salinity. Will they demand the Lao government pay compensation?"

Shady Politics

The vast menu of environmental issues raised by this dam have converted the normally polite and paternalistic cross boundary politics into saber thrusts of approbation. Vietnam and Cambodia have been strongly opposed to the dam, fearing severe downstream consequences, while entertaining their own dam futures.

And What of Climate Change?

Vilakhorn Khomtavong an Australian based water engineer wrote: "I don't think that the dams in Laos are built and operated scientifically. They see $$$!! (sic) and they go for it. They predict the dams to operate at its maximum level, (but) this cannot be done when they have limited data. The data they have are only a few years and they are not run-off data, but just rainfall data. Australia has 50-100 yrs of rainfall and some 50 yrs plus run-off data, and even they cannot get the flow rate accurate and they can't factor in climate change."

"Lao dams are built using the BOT method (Build Operate Transfer) The designer, who is part of the BOT scheme, upload their fees and make their money upfront. Anything after that is the cream for them. "

Being in breach of gazetted legal obligations is likely to expose Lao PDR to liability for damages to lower riparian countries resulting from the dam.

The Company you keep.

Around a major dam outside of Vientiane, the local residents are said to be selling up and moving, fearing cracks in the dam wall will worsen. The dam was built by Ch. Karnchang. If Karchanghas issues with quality control, it's vitally important they fix them, as Sayaboury has experienced significant earth tremors in the last 12 months. In the Thai resort area of Rayong, three damaged reservoirs built on private golf course owned by Ch Karnchang, broke and flooded three villages in the area. A Buddhist nun almost drowned. Very bad karma indeed.

There are many questions about the probity of the principle contractors. Karnchang's biggest share holder is an anonymous company called Mahasiri Siam who own 21.71%. Attempts to investigate Mahasiri Siam are meet with blank screens; and who owns a mystery 50.02% of shares in electricity company EGCO? And does withholding this information from public scrutiny breach the Stock Exchange of Thailand's own regulations?

Climate Bottom Lines

Contrary to some claims, hydro dams are not carbon neutral and while hydro-power can, with due diligence, be cleaner than other energy sources, there is evidence that this dam's construction site is encroaching on primary forest and of course the construction work itself is carbon intensive. It might be time to take a deep breath and consider if energy conservation might be a more considered path to energy proliferation, particularly in light of the electricity surplus.. The Portland and Mae Fah Luang University report suggests the need "to move beyond linear thinking to a more comprehensive basin wide .. approach" and further that Mekong nations could focus more on alternative renewable energy sources and place more emphasis on a well-being approach than standard economic growth being the focus. They then suggest that the governments responsible for dam development; in this case Laos, should be responsible for paying other nations for the loss of ecosystem services. By calculating those service costs to the Mekong Basin they converted a USD33 billion profit for all dams to a USD 274 billion debt. It is doubtful if Lao has been faced with these sobering economic realities.

Concern about the 40,000 Chinese dams currently needing rehabilitation or decommissioning should raise questions in Lao about the need for sinking funds for long term maintenance, and eventual destruction. The inability of the Lao Government to offer any logistic long term planning or contingency financing, offers grave concerns about the future of the Mekong, and the competence of the Lao government to do anything but realize short term profits.

Last Words

But the real politik comes from a highly connected Lao family who confided on the basis of strict confidentiality "He (Choummaly Sayasone, President of Lao PDR) gets big money (from Karnchang) He cannot pay it back as it (the money) is all spent. The dam will go ahead. He has a full time staff person whose job it is to convey his wishes to Cho Karnchang. If his daughter wants a laptop, it is there within days. The reason this will go ahead despite the opposition, is that the very top is getting the money."

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About the Author

Melinda Boh is the nom de plume of a writer who lives in Jakarta.

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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