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dam-l IRN-MEKONG: Sekong Se San and Nam Theun River Basins Hydropower Study (fwd)



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From: aviva@irn.org (Aviva Imhof)
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Subject: IRN-MEKONG: Sekong Se San and Nam Theun River Basins Hydropower Study
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29 October 1997

Mr. Mitsuo Sato
President
Asian Development Bank
Fax: 0011 632 636 2001


Dear Mr. Sato

I write to you concerning the Sekong-Se San and Nam Theun River Basins
Hydropower Development Study, the progress of which IRN has been following
since the Regional Technical Assistance grant was approved last year.

IRN finally received a copy of the Inception Report and associated Working
Papers for the Study in July 1997, despite having repeatedly requested
copies from the Bank since April 1997. No explanation has been given for
the delay in distributing these documents.

I understand that Mr. James Rockett is the senior manager responsible for
this Technical Assistance project. However, IRN has been totally
dissatisfied with the responses of Mr. Rockett to our letters, and
therefore we have determined to write to you, in the hope that you will
provide a more adequate and full response to the very important issues
raised in this letter.1

On 18 November 1996, IRN wrote to Mr. Rockett expressing a number of
serious misgivings about the Terms of Reference for the study. In response
to a six page letter, endorsed by IRN and 14 other regional and
international organizations, Mr. Rockett sent a two page fax almost 2
months later. This fax failed to acknowledge or respond to a large number
of the concerns raised in our letter of 18 November. In fact, Mr. Rockett
demonstrated very little understanding of the social and environmental
impacts of hydropower projects. Mr. Rockett stated that "Hydropower
projects can demonstrate enhanced sustainability as they use a renewable
resource to generate energy while giving rise to no regional or global
pollution effects as the case with thermal power projects."
It is a well known fact that hydropower has considerable social and
environmental impacts (for example, see World Bank/IUCN,Large Dams -
Learning from the Past, Looking at the Future. Workshop Proceedings,
Gland, Switzerland, 1997) Mr. Douglas Cross, Environmental Specialist on
the Sekong-Se San and Nam Theun River Basins Hydropower Development Study,
in a Working Paper prepared for discussion at the study's first Workshop in
Phnom Penh in May 1997, recognizes the substantial cumulative impacts that
a number of hydropower projects on Mekong tributaries will have on the
region as a whole. He states that

"Virtually none of the past studies on hydropower generation impacts
considered that adverse impacts may develop further away than the nearest
point of the Mekong mainstream. This is a major fault. The impacts of a
single scheme, if large enough, will certainly be felt as far downstream as
the main river. But the present sectoral development policy for energy
provides for very large numbers of such projects in the very near future,
and it is irresponsible to ignore the potentially large cumulative impacts
that changed river discharge patterns will have on the main river, and in
particular at critically sensitive locations downstream, such as the Khone
Falls fish migration passages, on the Sap River/Tonle Sap reversing flow
regime in Cambodia, or in the estuary in Vietnam."

As stated in our original letter to Mr. Rockett, IRN believes that the
Terms of Reference for the Study are fundamentally flawed. The requirement
in the ToR that the consultants identify at least six projects for early
implementation was made before any detailed gathering and analysis had
begun of key design data, such as the hydrology, sedimentology,
meteorology, geology, ecology, demography and socio-economic
characteristics of the basins, the cumulative downstream impacts of the
proposed dams on the Mekong, or the costs of electricity from these dams
compared with the costs of supplying electricity to Thailand and Vietnam
from other sources.

As will be illustrated below,  our concerns are vindicated by the evidence
provided in the Inception Report and associated Working Papers. It is quite
apparent from these papers that there is simply insufficient data and
inadequate time and resources for the consultants to be able to confidently
recommend 6 projects for early implementation.  Yet as a result of the
Terms of Reference, the consultants will have to recommend six projects
without the necessary basic hydrological, ecological, geological and
socio-economic data, and without even visiting most of the project sites.

Cumulative Impacts Assessment

The Inception Report states that the "primary objective of the Study is to
formulate a sustainable, least-cost plan of hydropower development of the
three basins from the projects which have been identified so far...or will
be identified." According to the Report, the Study must "assess and take
into account the individual and cumulative environmental and sociological
impacts which will result from the construction of the projects."

However, a closer look at the Report reveals that there is little
discussion of how the consultants will actually assess the cumulative
impacts of the proposed projects. The environmental analysis will "provide
only an initial environmental evaluation of potential impacts," which
should be adequate for "writing the terms of reference for future ...
environmental and social impact assessments." Halcrow concludes that "the
cumulative impacts of basin-wide development ... need to be examined in
future analysis."

Furthermore, the Inception Report confirms that the preliminary screening
will exclude from further study those projects which are in the
construction stage, have already reached feasibility study level or are
already committed as BOT developments.2  In our letter to Mr. Rockett of 18
November, IRN stated that instead of pushing ahead with the process of
building yet more dams in the 3 basins, we believe that the ADB should
undertake the long-term process of gathering and analyzing data on the
impacts of the projects which are already underway or scheduled to begin
soon. The Bank has consistently failed to address this issue.

Mr. Cross recognizes the deficiency in the Study's approach in this
respect, stating that the exclusion of existing projects is "incompatible
with full optimization of basin ecology or sociological management...In
terms of system analysis, it is irrational to exclude large areas of any
system simply because it is already the subject of other studies." He goes
on to state that critical aspects of the environmental study will be
"extremely limited in scope" and visits to potential hydropower sites
"severely limited" with "no detailed field surveys to be done" until
"priority" sites have already been selected. Cross warns that the
environmental study can only be expected to achieve "some degree of
validity."

It is quite clear from the above that the Study will be unable to
comprehensively study the cumulative social and environmental impacts of
proposed developments. This is mostly due to the flaws in the Terms of
Reference, which require the consultants, above all, to determine the best
sequence for the construction of dams on these rivers, not to ascertain
whether the rivers should be dammed.

Inadequate Hydrological Data

According to the Inception Report, adequate hydrological data is missing
for the Se San-Se Kong and Nam Theun basins, which means that "considerable
extrapolation of data is required" and there is a need for "the estimation
of substantial amount of missing data."

Peter Adamson, the hydrologist working on the study, states that the
deficiencies in the hydrometeorological database are "crucial constraints
in assessing their hydropower potential." Mr. Adamson goes on to state that
samples of data are "relatively short" and that streamflow and rainfall are
"observed in the lower catchment reaches and not in the headwaters" where
the dams are most likely to be constructed.

Due to the requirements of the Terms of Reference, the consultants will be
forced to use insufficient data and highly imprecise modeling methods in
order to come up with six recommended projects. The inadequacy of the
hydrological data at this stage raises questions about the reliability and
accuracy of the ranking methods employed in the study, and indeed about the
purpose of the study at all. Without sufficient knowledge of how much water
is available, the study would appear to be a futile exercise.

Lack of Baseline Data

Hydrology is not the only area where the consultants are experiencing a
serious shortfall in data. Information on sediment yield is scarce, with
Halcrow forced to rely on "extrapolation of the sediment yield in other
rivers in the region, coupled with theoretical approaches." Fisheries
information is "extremely sporadic in coverage." On socio-environmental
aspects, "the quality of available documentation is variable and generally
inadequate to support the present study."

On geotechnical aspects, "Whilst there are a number of geotechnical survey
reports available (although not presently collected), most deal with
matters not directly related to this Study"; on watershed management, "The
reliability of the data reviewed during this inception period is low"; and
on water quality, "water quality data are extremely scarce".

Not only is data missing in a number of key areas, but the consultants
frequently refer to the cost and time limitations of the study, which means
that site visits will be available only for the six projects eventually
selected for more detailed study. Even these will be limited to one or two
visits per site. Thus the consultants are relying on inconsistent and low
quality data from previous studies in order to draw conclusions about
project viability. Halcrow states that each of the project sites will not
be analyzed to the same comparative level as the time, staff and data
resources are "inadequate".

As a result, a project which may be excluded from the final six could well
turn out to be a "good one", or one of the six selected sites could be
"very expensive to develop" because of, for example, "difficult geological
conditions which cannot be determined appropriately in this Study."
(section 1.5)

Participation and Consultation

The participation and consultation mechanisms anticipated by the Study are
simply inadequate. The Inception Report makes it clear that only after the
six projects have been selected in November 1997 will local communities be
in any way consulted. The consultants envisage field visits in "only six
undeveloped sites and at several sites already operational or under
construction" due to "budget and time restrictions."3   Only five person
weeks will be spent in the field: two weeks by technical planners, and
three weeks by the social anthropologist.

What becomes apparent when reading Working Paper No. 6 on Sociology and
Socio-Economics is that these visits to communities are at the level of
"information gathering" rather than true participatory consultation.
Villagers will be expected to contribute information about their lifestyles
and livelihoods, but their views on their future development aspirations,
whether they wish to be relocated, and the impacts of dams on their
livelihoods will not be sought.

The Study envisages three workshops to discuss the Study at its various
stages. But not a single NGO or local community representative was invited
to the first workshop, held in Phnom Penh in May 1997, and as far as we are
aware, no other workshop has been organized as yet. According to the ToR,
"Some of the workshops will be devoted to discussions with nongovernmental
organizations and vulnerable groups regarding issues such as project
locations, resettlement alternatives, and consultative mechanisms."  There
is no mention of the need to discuss whether large scale hydropower is in
fact the most appropriate form of development for these river basins.

The consultants cite Nam Leuk and Nam Theun 2 as examples of "innovative
stakeholder approaches that seek to ensure a sustainable approach to
hydropower development." We are concerned about this attitude, given the
history of "participation" in both of those projects.

In the case of Nam Leuk, no budget has been allocated for compensation, the
EIA did not include a socio-economic analysis of the means of livelihood of
communities living on the Nam Leuk River, and the consultants undertaking
the socio-economic study were not even asked to study the villages situated
downstream from the project, even though they will be affected. As a
result, these villagers are not expected to receive fair compensation for
their losses.

In the proposed Nam Theun 2 project, the World Bank has tended to regard
international NGOs as proxies for local people in the "participation"
process, an utterly inappropriate role for the NGOs.  The World Bank's
International Advisory Group, established to examine the World Bank's
handling of environmental and social issues in the Nam Theun 2, have
recognized the deficiencies in consultation with project affected peoples.
According to their final report, "the IAG has doubts about the
effectiveness of consultations on the ground with the most vulnerable
populations, particularly women and ethnic minorities. ... Its own direct
contacts with these groups, though not extensive, suggest that the level of
comprehension of project proposals and their impacts is low." (page 11)

Demand for Power and Economic Justification

One of the most important issues unanswered by the study is that of demand
for the power from these dams. The study assumes that the major market for
power from the 3 river basins is Thailand and, later, Vietnam, despite the
fact that information on the generation system expansion plans of Vietnam
is not available to them. Halcrow are basing their estimates for Thailand's
demand on EGAT forecasts, which are rapidly changing due to the current
economic crisis in Thailand. Yet the consultants state that the plan of
development recommended will be based on a fixed demand forecast. This
means that the study will most likely be relying on highly inflated demand
projections.

In terms of economic viability, the consultants explicitly recognize that
"at the present price levels of primary fuels [in Thailand]...only the
lowest cost hydroelectric sites could offer competitive (levelized) energy
rates."4  Yet because of the stipulation in the Terms of Reference that six
projects be recommended for "early implementation", the consultants embark
on an elaborate explanation of their procedure for "confirming the economic
justification of the (total) development program identified in this
technical assistance." (my emphasis). Rather than aiming to determine the
economic viability of proposed developments, the consultants are intent on
confirming their economic viability, regardless of paucities in data and
questionable demand.

Conclusion

The evidence cited above draws us to the same conclusions as in our 18
November 1996 letter. The consultants are intent on fulfilling the
unrealistic requirements in their Terms of Reference despite evidence that
there is simply insufficient data and not enough demand to justify
recommending 6 projects for early implementation. We predict with
reasonable certainty that the consultants will conclude from their
subjective examination of the data that they gather that six or more dams
on these basins will indeed be "regionally optimized, sustainable and
envrionmentally acceptable" .5 In these circumstances, the true
environmental, social and economic costs of the six additional dams will
not be reflected in Halcrow's study.

IRN believes that the study is fundamentally flawed and that its
recommendations will not be valid, nor should it form any legitimate basis
for future decision-making on hydropower development in these basins.

I look forward to receiving your comments on the issues and concerns
outlined in this letter.


Yours sincerely


Ms Aviva Imhof
Mekong Program Coordinator

cc      ADB Executive Directors
        Mr. James Rockett, Manager, Energy Division (West), ADB
        Mr. Geert van der Linden, Manager, Programs Department (West), ADB
        Dr. Bindu Lohani, Manager, Environment Division, ADB
        Mr. Robert Dobias, Environment Specialist, Environment Division, ADB
        Ms. Anita Kelles-Viitanen, Manager, Social Development Division, ADB
        Mr. Gordon Wilkinson, Social Development Specialist, Social
Development Division, ADB
        Mr. Sam Ramsahoye, Project Manager, Sir William Halcrow and Partners
        Mr. Somboune Manolom, Deputy Director General, HPO, Ministry of
Industry and Handicraft, Lao PDR
        Mr. Saysanavongphet Sivixay, Acting Director, Lao National Mekong
Committee
        Mr. Khy Thaing Lim, Cambodia National Mekong Committee
        Vietnam National Mekong Committee
        Mr. Yasonobu Matoba, Chief Executive Officer, Mekong River Commission

NOTES:
1. To emphasize this point, I cite the example of a letter IRN sent to Mr.
Rockett on April 23 1997 regarding the Nam Leuk Hydropower Project. This
letter included a number of concerns about the Terms of Reference for the
Panel of Experts for the project, questions regarding the composition of
the Panel and compensation for affected communities. Mr. Rockett responded
with a one paragraph fax that did not answer any of IRN's questions nor
substantively address any of the points raised in the letter. On other
occasions Mr. Rockett has failed to answer letters until reminded 2 or 3
times, has failed to respond to requests for information, and has
demonstrated an unwillingness to meet with IRN.
2. Section 3.3.1
3. Working Paper No 6, section 3.1
4. Working Paper 8, Page 11.
5. ADB, Technical Assistance Report for the Sekong-Se San and Nam Theun
River Basins Hydro Power Development Study, July 1996, paragraph 11, p3.



****************************************************
                Aviva Imhof
                Mekong Program Coordinator
                International Rivers Network
                1847 Berkeley Way, Berkeley CA 94703, USA
                Tel: + 1 510 848 1155   Fax: + 1 510 848 1008
                http://www.irn.org

I AM CURRENTLY LOCATED IN AUSTRALIA - NOTE NEW PHONE NUMBER AND ADDRESS
TEL: +61 2 9955 5940
FAX: + 61 2 93861497 (C/O- AID/WATCH)
ADDRESS: 29/10 Carr St, Waverton NSW 2060, AUSTRALIA
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