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dam-l Controversial dam projects may lose development bank funding
(South China Morning Post, Saturday April 24 1999)
Laos
Controversial dam projects may lose development bank funding
GREG TORODE in Bangkok
The Asian Development Bank is poised to stop
funding controversial dam construction in Laos amid fears of poor
viability and rampant illegal logging of some of the region's last
rainforests.
"Concerns are being raised by several of our member countries at the
current situation," a source said.
"The time has come for a major rethink on the way forward . . . I can't
see us directly funding a dam in Laos again."
News of bank concerns follows a stinging report by a respected
environmental group warning of "fundamental problems" at six projects now
under way.
Two projects involving direct bank loans - the US$260 million (HK$2
billion) Nam Thuen-Hinboun and the US$130 million Nam Leuk - were singled
out for criticism by the International Rivers Network.
The report warned of "grossly inadequate" compensation to tens of
thousands of peasants who have lost food and water supplies at the Nam
Thuen site. Illegal loggers, it added, were moving into newly opened up
areas around Nam Leuk.
Over-runs at the Nam Leuk site could cost Laos - the poorest country in
Southeast Asia - an extra US$20 million even before weak demand for the
power it generates is considered.
At another dam site on the Nakai Plateau, more than one million cubic
metres of timber has been felled for a project that may never go ahead.
The bank and other institutions such as the United Nations Development
Programme and the World Bank have long urged Laos' Communist Party rulers
to build dams and sell electricity to its giant foreign neighbours to earn
vital foreign exchange.
The six projects covered in the report are among 23 deals under
consideration that makes Laos the last "El Dorado" for major international
hydropower developers.
The collapse of the economy in Thailand - a key consumer - has thrown
financial forecasts into further disarray as the Thais seek urgent
renegotiations of existing commitments.
Brent Dark, the bank's principal country officer for Laos, said the report
was being studied closely ahead of its own forthcoming strategy review.
"We are very concerned about how things are developing in Laos in terms of
viability, the environment and social standards related to the various
projects," he said.
Insisting the policy of Laos exploiting its unique hydropower potential
remained sound, he said it was important international institutions
"actively engaged" the Lao regime.
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Aviva Imhof
South-East Asia Campaigner
International Rivers Network
1847 Berkeley Way, Berkeley CA 94703 USA
Tel: + 1 510 848 1155 (ext. 312), Fax: + 1 510 848 1008
Email: aviva@irn.org, Web: http://www.irn.org
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