From: Reuters
Published November 27, 2007 10:20 AM

Green group urges Laos to stop dam expansion plan

By Darren Schuettler

BANGKOK (Reuters) - A major expansion of a hydropower dam in communist Laos will cause serious flooding, ruin fisheries and displace thousands of people living downstream, a Norwegian environmental group said on Tuesday.

Water releases from the Theun-Hinboun dam had already ruined the ecology of two rivers and damaged fisheries and farms since it was built a decade ago to supply electricity to neighboring Thailand, the group said in a new report.

"In a cruel irony, many of the people to be affected by the expansion project have already been seriously affected by the existing Theun-Hinboun Hydropower Project," the report by the Association for International Water Studies (FIVAS) said.

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The Theun-Hinboun Power Co, owned jointly by Norwegian state power utility Statkraft, a Thai power firm and the Lao government, had so far failed to pay compensation to people living downstream, it said.

The company should shelve the plan "until it has proven that it is capable of restoring the livelihoods of communities affected by the existing project," FIVAS director Andrew Preston said in a statement.

Statkraft, which owns 20 percent of the joint venture, said $45 million had been set aside in the project to address the problems mentioned in the report such as by building houses, schools, infrastructure and health stations.

But Statkraft brushed off FIVAS' demands to back out of the project, which will double power production from the dam.

"We think this is a sustainable and a right project in a region experiencing strong growth and strong demand for energy," said Statkraft's spokesman Knut Fjerdingstad.

The expansion involves the construction of a 65-metre (213-ft) high dam on the Nam Gnouang river and a water diversion to the Nam Hai and Nam Hinboun rivers.

The report estimated it would "affect over 50,000 people who will suffer flooding, displacement, erosion and loss of livelihood if the project is approved," of whom 4,200 would be forced to move to higher ground.

Fjerdingstad said the challenges cited in the report were known to Statkraft, and the company would take seriously any input that could contribute to improving the project.

"This project will happen whether Statkraft is in on it or not. We can contribute to making this a better project," he said. The start-up is planned for 2008, though the final decision has not been made, he said.

WESTERN INVESTMENTS

The report was released ahead of a workshop on the expansion plan being held this week in the Lao capital, Vientiane.

The study was conducted by a research team that interviewed people in five villages along the Hai and Hinboun rivers in May.

Landlocked Laos says it wants to become "a battery for the region" by building a series of dams with funds mainly coming from neighboring Thailand, China and Vietnam.

Western companies are also investing heavily in Laos, led by French electricity group EDF, which is involved in the massive Nam Theun 2 project.

Lao Prime Minister Bouasone Bouphavanh told Reuters last week his country was committed to supply 7,000 megawatts to Thailand, 5,000 megawatts to Vietnam and 1,500 megawatts to Cambodia by 2015.

The government has said it will use the profits from hydropower sales to fight poverty in the country of 6.5 million people, where the average monthly income is less than $2 a day.

(Additional reporting by Aasa Christine Stoltz in Oslo; Editing by Michael Battye and Roger Crabb/James Jukwey)

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