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dam-l LS: Selangor (malaysia) and economics/mekong submissions




Large Dams and Their Problems:
The case of Malaysia

Rosli Omar (rosli@fk.um.edu.my), Alice Shumate (Alice.M.Shumate@dartmouth.edu)
SOS Selangor 
383, 1st Floor, Jalan 5/59, 46000 Petaling Jaya, Selangor, Malaysia
tel: +60-3-7943525, fax: +60-3-7943526

Dams are supposed to supply water and electricity, both of which are
essential for economic growth.  But it seems that the ecological problems
of the world (which have long been disregarded in the economic equation)
are due to the belief that economic growth is inherently good.  This growth
is manifest in the ever increasing demand for scarce resources, which is
subsequently met with the ever increasing, but scarce supply.  We believe
that it is this apportioning of supply to every claim made by demand that
causes many of our ecological problems: supplying more fuel and roads to
meet the demand of more cars, supplying better technology to cope with
demand for goods and services, and pertinent to the issue of dams,
supplying more electrical power and water to meet household, industrial and
agricultural demands.  Thus, dams in providing supply to meet the immediate
demand and without looking into the control of demand long-term, are an
important cause of  ecological problems in themselves.  History has shown
that making supply available creates the subsequent demand which requires
more supply, i.e., a vicious cycle. [Hobsbawm 1994; Galbraith 1984, 1994].

We may simply be putting off present limits to growth into the future, by
buying time with unsustainable development.  In the near future, when
supply can no longer meet unsustainable demand, there could be a collapse
in production and a catastrophe affecting human, animal, and plant
populations on a global scale.  For example, water supply encourages
agriculture and thus population growth, but is unsustainable in many areas,
such as the U.S., India, Pakistan, Egypt and China (due to the increasing
irrigation salination problem, or unsustainable extraction of ground
water); supplying more fuel and roads contributes pollution as well as
reducing forested green lung areas; technology too, instead of enabling us
to cope with scarcity, can hasten it.  For example, when fishing catch is
reduced, better ships with better technology are introduced.  When
sustainable yield is not taken into account, this only hastens the collapse
of fish stocks, as can be seen with the collapse of fishing off
Newfoundland, Scotland, Japan and others; and, more available power
provides more means for industrial growth and its subsequent ecological
impact. 

Water is a very important component for industrial production, domestic
consumption, and food production. But like over fishing, all over the world
water extraction is exceeding the ability of supply refurbishment, be it in
the United States (extraction from the Colorado River such that little
water reaches the sea, depletion of the Ogallala aquifer), India and
Pakistan (draining the Brahmaputra, Ganges and the Indus rivers as well as
groundwater), Iraq, Syria and Turkey (competing over the Tigris and
Euphrates), Ethiopia, Sudan and Egypt (competing over the Nile so that so
much less water reaches the Mediterranean), China (where some 200 days per
year, the Yellow River runs dry without reaching the sea), and Central Asia
(the draining of Syr Darya and Amu Darya for irrigation, killing the Aral
Sea), or elsewhere (see Postel 1999 for more examples).  

In Malaysia, large dam projects have had detrimental impacts, both
environmental and social.  The push to meet the increasing water demands of
Kuala Lumpur and the Klang Valley is wreaking, and will further wreak, much
environmental damage, yet each subsequent project is a short-term fix for
ever-increasing demand.

Water is currently supplied to the Klang Valley by five dams.  The latest
addition proposed is the Selangor Dam, which will dam the Selangor River,
inundating 600 ha of forest.  The reduced downstream flow will put a stop
to superb white-water rafting which provides eco-tourist income to the
locals (mostly Orang Asli or "Original People").  The expected reduced flow
will also result in saltwater intrusion downstream, changing the ecological
habitat for naturally-occurring species in the river and riparian zone, and
destroying fish and cockle farms.  One species likely to be threatened by
the dam is Pteroptyx tener, a firefly that forms one of two large firefly
colonies known in the world.  Saltwater intrusion could dramatically reduce
the snails these firefly larvae feed on and the berembang trees that are
food for the adults.  Eco-tourism as a result of these fireflies is a
mainstay of the economy of the village of Kampung Kuantan, where nightly
boat trips take tourists out to see the magical synchronous flashing of the
firefly colony.  In addition to the threatened downstream habitat, there
are also some 624 animal species, of which 20 are on the endangered list,
in the to-be inundated area [Selangor Dam EIA 1999].

The dam will displace 360 Orang Asli.  Promises of land and money have been
made, but past records of resettlement of tribal peoples show that these
promises have not been taken seriously, especially by the Asli themselves.
The Orang Asli of the Peninsula, and their counterparts in Sarawak, have no
title to their land and thus are easily displaced with little or no
compensation. The resettlement of people displaced by the Batang Ai Dam and
the (uncompleted) Bakun Dam are cases in point.  Promises of suitable land,
both quality and quantity, did not materialise.  Lands to which they were
moved were inadequate in size and of poor quality for farming.  These have
caused the now prevalent problems of helplessness, destitution and
depression, as well as disempowering women.  These women are now mostly
immobile at home, waiting for the men to bring in whatever food they can,
whereas in their previous community they played vital roles farming and
collecting forest products.  All these problems cause many to resort to
alcohol and gambling [see details of the settlement and the problems in Kua
et al. 1999].

Bakun Dam, although put off indefinitely, has quickly proceeded through the
resettlement stage, involving some 9,000 people, and also proceeded
irreversibly into environmental destruction.  The area to be inundated is
695 square kilometers, the size of Singapore.  Its original forests, where
the reservoir is supposed to be, have now been clear cut of any valuable
timber by the project proponent, Ekran.  Bakun is primarily for supplying
2400 MW of hydroelectric power, mainly for export to the Peninsula where
there is already a power oversupply, and also to neighbouring countries.
The project cost of RM15 billion includes RM10 billion for undersea cables
to the Peninsula, i.e., two-thirds of the cost!  Engineers and economists
would see this as a non-viable project.

For the ecological damage caused by large dams [see McCully 1996], such as
Bakun and Selangor, as well as possible land ruins and the displacement of
people, this technology must be regarded as outmoded.  This indeed is the
thinking in the U.S. and other developed nations.  Furthermore, once a dam
is in place, decommissioning it is very difficult and expensive, while much
of the environmental and social damage are done and irreversible.

Without regard to sustainable development and sustainable consumption, and
without regard to the ecological impact of development by always meeting
demand with potentially unsustainable supply, large dams (or other
unsustainable sources of water or electricity) will only contribute to
ecological collapse. As well, dams have negative ecological and social
impacts on their own.  Potential dam projects in Malaysia and elsewhere
need to be examined much more closely, with greater transparency, and with
a guiding set of principles designed to take these non-monetary costs into
account.

References

Galbraith, J.K., 1984. The Affluent Society (New Edition). Penguin:
Harmondsworth, England.

Galbraith, J.K., 1994. The World Economy Since the Wars.
Sinclair-Stevenson: London.

Hobsbawm, E., 1994. The Age of Extremes. Michael Joseph: London.

Kua, K.S., et al. 1999. Empty Promises, Damned Lives: final report of the
fact finding mission, Evidence from the Bakun resettlement scheme in
Sarawak. The Coalition of Concerned NGOs on Bakun: Kuala Lumpur.

McCully, P., 1996. Silenced Rivers: the ecology and politics of large dams.
Zed Books: London.

Postel, S., 1999. Pillar of Sand. W.W.Norton & Co: New York.

Selangor Dam EIA, 1999. Detailed Environmental Impact Assessment Study for
the Proposed Development of Sg Selangor Dam in Hulu Selangor. SMBH Sdn Bhd.



The following two page document comprises my proposal to the WCD for a
report presentation at the ALarge Dams and their alternatives in East and
SouthEast Asia@ consultation to be held in late February.  I am including
it as both an attached document saved in Microsoft Word and in the body of
the e-mail message.  My address is:
Wayne C. White, Ph.D.
Foresight Associates
81 Main St.
Acton, MA 01720
USA
wwhite@forsi.com
tel 978-929-9794
fax 978-929-9792

Please let me know if you require any additional information.  




Economic viability of Mekong Basin Dam projects

This report will look at selected proposed and completed dam projects in
several Mekong Basin countries. Discussion of economic viability will be
based on a framework that includes current, international standards for
full treatment of benefits, costs, environmental and social impacts.  A
discussion of developmental effectiveness of the projects will include a
look at the original economic rationale for the projects, and subsequent
realized experiences.

Projects covered 

The Pa Mong is a project proposed, but not built, to be located on the
mainstream of the Mekong, and highlights issues associated with any
retention or diversion of the primary flow.  The project was proposed by
the American agency, the United States Bureau of Reclamation in 1963; one
of the primary initial project justifications was massive diversion for
irrigation in Northern Thailand and as once envisioned would have displaced
250,000 people.  The project was reconfigured and presented anew in 1972,
1974, through 1992, and may continue to resurface with new advocates in the
future.

Two projects in Thailand will be discussed, Nam Pong and Pak Mun.  The Nam
Pong, which came online in 1966, incorporated some electrical generation,
but had a major design function of diverting water for irrigation, one of
the last major projects in the region to do so.  The project was formative
in subsequent regional; design goals and project justifications regarding
the issues of diversion for irrigation and reservoir fisheries.  The Pak
Mun dam was begun in 1991 and construction was completed in 1994.  The
World Bank participated in project development and finance.  Pak Mun is
presently the subject of an organized protest movement by affected persons
focusing on claims of lack of resettlement, impoverishment and provision of
livelihood.

The Lao PDR operates the Nam Ngum project, built primarily with Japanese
foreign aid; it seeks to have the Nam Theun 2 built, which would be
financed and built by a commercial consortium, but for which involvement by
the World Bank is a key financing element.  The Nam Ngum is a 150 MW
producer of electricity, much of which is exported to Thailand.  It was
built with concessional bilateral aid, and is the country=s largest source
of foreign revenue, without the need to make repayment for the dam.
Recurring negotiations with the Thai utility, the sole purchaser, have kept
the tariffs arbitrarily low.  The Nam Theun 2 has been cultivated as the
most profitable, and a suitable first of many, of the possible hydropower
developments in the Lao PDR to be developed for export earnings.  Yet
detailed economic analyses have shown the project to be uneconomic.  If the
best of several potential projects is shown to be not economic, one
conclusion might be to question the overall strategy, but, to the contrary,
those studies have not deterred advocates of the project and the overall
strategy of extensive hydropower development in the country.  One
compelling issue that emerges is why profit oriented, private sector
developers would be motivated to continue pursuit of the project if it is
not economic, i.e., costs will exceed benefits?  If they will not incur the
losses, who will?
The country of Vietnam has constructed the massive Hoa Binh hydropower
project, and plans to build the even larger Son La upstream from it.


National Development Effectiveness

Discussion of national development effectiveness will be on a case basis.
Varying issues and experiences are represented, as the projects have
different design justifications.  The projects in the Lao PDR are, for
example, intended primarily to achieve national income.  Issues include
consideration of a dam where it was Afree@ from the national perspective
due to direct, concessional foreign assistance, regardless of the actual
benefit/cost; and whether the foreign assistance could have been
alternatively employed.  The possible existence of unintended benefits will
also be addressed.

Projects such as Pa Mong and Nam Pong were intended to aid agriculture,
therefore improving rural employment and food security.  Sufficient time
has passed to examine Thailand=s food security and rural employment, and
these project=s role in the same.  

The Pa Mong raises issues of profound, cross border effects, as do the sum
of all projects which might be built in the basin.  The impacts of
diversion on downstream areas including Ton Le Sap in Cambodia, and the
Mekong Delta in Vietnam, were not well understood, nor even given much
consideration at the time of initial conceptualization.  Yet these two
domains are the major food sources, in rice and fish, of the two countries,
and are profoundly rich and varied habitats.  Their unique, cyclical and
highly seasonal conditions form highly specialized ecosystems which are
home to an array of aquatic, bird, and other animal life.  Consideration of
the project must be updated with consideration of these critical realities.

Vietnam sought production of electricity to meet domestic needs and spur
national economic development.  It is appropriate to examine the projects=
effectiveness in supplying electricity to the nation, and the projects=
effects on the national economy.

Conclusions

The report will examine any trends discernable from the examples.  The
projects reviewed are varied in configuration and distributed through
several countries; they do have validity as representative of the large dam
enterprise in the region. While vague generalization is to be avoided, if a
strong majority of the projects are economic or not is telling, and
likewise for issues of resettlement, fisheries, biodiversity, etc.

It is of great interest to determine the role these projects play in
national economies.  Are they commendable building blocks of economic
growth; lacking this, are they effective growth mechanisms that merely
require adjustment to link equity and environmental sustenance with the
growth?  If benefit/cost ratios are 1.0 or less, that is, if the projects
are not functioning in value creation, then what is their function?  We
will examine other possibilities: are projects functioning as a means of
financing foreign aid into an annuity; are they functioning to liquidate
and centralize resource value; are they forms of long term borrowing for
financing national accounts, with the debt burden being transferred to
future generations, domestic groups, or foreign investors?  In the first
case, for example, of a project creating an annuity which helps balance
national accounts, it is valid to ask whether a financial instrument could
be better used to accomplish the result.

Wayne C. White, Ph.D.
December 1999
wwhite@forsi.com




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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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