[Vnbiz] Cambodian dam plans suffer information drought

[Tai Phan]

    *Mar 26, 2008 *
         *Cambodian dam plans suffer information drought*
By Andrew Nette

PHNOM PENH - Cambodia has rejuvenated old plans to develop the country's
huge hydropower potential, big-ticket schemes to be led by Chinese investors
which will simultaneously fill government coffers and have severe social and
environmental impacts on local communities.

Like neighboring Laos in the 1990s, foreign donors, electricity-hungry
neighboring nations such as Thailand and Vietnam and big business interests
in China are all keen to transform Cambodia into a major hydropower
generator. Previous plans for developing Cambodia's hydropower potential
were put on hold due to political instability and the economic chaos that
followed the 1997-98 Asian financial crisis.

But with recent rapid economic growth rates in the region - including
Cambodia, which notched gross domestic product

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growth of around 10% in 2006 and 2007 - hydropower schemes are apparently
back on the national agenda. Cambodian Foreign Minister Hor Namhong told a
donor's meeting last year that his government plans to make Cambodia into
the "battery of Southeast Asia".

A 2003 plan developed by the Ministry of Mines, Minerals and Energy, with
the support of the Mekong River Commission, estimated that Cambodia has the
potential to generate 10,000 megawatts of energy for internal use and
export. Almost 50% of that power would be generated from projects along the
mainstream Mekong River, which runs through Cambodia.

Foreign donors continue to play an important supporting role, particularly
the Manila-based Asian Development Bank (ADB) through its so-called Mekong
Power Grid Plan, a plan it has been pushing since the early 1990s which
envisages an interconnected power grid across the entire region.

The ADB predicts that Cambodia will initially be a net electricity importer
but will become a net exporter once the country's full hydropower potential
is realized. However, local and international environmental and other groups
are warning that large-scale hydropower development could create serious
problems, impacting on some of the country's most pristine ecosystems and
reducing water flow and fisheries with major consequences for the
livelihoods of thousands of people.

"We are not against development or hydropower," said Ngy San, deputy
executive director of the NGO Forum, an umbrella body of nongovernmental
organizations. "What we want to do is to ensure poverty reduction and
sustainable development, which is also the government's plan.

"We are also working to ensure that Cambodian decision-makers will learn the
lesson of other countries in relation to hydropower, and not repeat those
mistakes," said San. What is potentially different for Cambodia is the role
China is expected to play in developing the resources.

China's and Cambodia's political and economic ties have grown enormously
over the past decade. China is the nation's single largest investor, and
Chinese state companies, often financed by state-owned financial
institutions such as the Chinese Export-Import Bank, are the main players in
hydropower dam development.

Phnom Penh has identified about 14 priority projects, of which six are under
development - all by Chinese companies. For instance, China's Sinohydro is
building a 145-meter dam on the Kamchay River in Kampot province,
representing Beijing's biggest investment in the country.

There is no disagreement among officials and activists that Cambodia needs
to generate more power. Currently, only 20% of the population has access to
cheap, reliable sources of electricity, mainly in urban areas. Meanwhile
domestic demand for electricity is estimated to be growing at around 20% per
year.

"It is simple - development needs electricity," said Touch Seang Tana, an
advisor to Cambodia's Council of Ministers and a fisheries expert. "Power is
currently very expensive in Cambodia, particularly in regional areas that
are the most disadvantaged."

The government wants to provide services to the rural communities, but this
is difficult to do without electricity," he said. "The actual number of
people impacted negatively [by dams] is small and overall the entire benefit
to the nation is significant. The government has to balance all these
factors."

Activists strike a more cautionary note. "The rush to develop our hydropower
potential needs very careful study," said NGO Forum's San. "However, it must
include consultation with impacted communities, and comply with all relevant
national and international laws. There are some in the government that share
our concerns, but they find it difficult to act because they are not the
real decision makers."

NGOs complain that the decision-making process in relation to hydropower
development lacks transparency. While a plethora of departments and
regulatory bodies participate in the process, observers say the agenda
appears largely to be set by the Ministry of Industry, Mines and Energy,
with the direct intervention of Cambodian Prime Minister Hun Sen.

The lack of transparency is accentuated by China's involvement, critics say.
"There is almost no information in the public domain on the financing
arrangements for Cambodia's hydropower projects," stated a report released
jointly in January by the US-based International Rivers Network (IRN) and
the NGO Forum.

"The lack of information from the Chinese dam builders is very disturbing -
they do not consult or share information," said Seng Bunra, country director
for Conservation International in Cambodia (CIC). His organization works in
the Cardamom Mountains Protected Forest Area, one of the largest continuous
swathes of rainforest left in Southeast Asia and home to a number of
globally endangered species.

According to the CIC, there are plans to build a number of dams in the
protected area, all by Chinese companies. According to the plan's critics,
the number of hydropower projects scheduled for construction in protected
forest areas illustrates the fact that existing laws are insufficient to
protect the environment and affected communities.

The situation is particularly serious, notes the report by the NGO Forum and
IRN, given that "compared against the already less than admirable
environmental and social standards of Western bilateral donors and export
credit agencies ... Chinese institutions are noticeably weaker".

One of the projects under scrutiny is the proposed Sambor dam on the
mainstream Mekong in central Kratie province. A number of construction
options are being studied, including one that would only block between
one-quarter to one-fifth of the river and have, according to Council of
Ministers adviser Tana, only "minimal" impact.

NGO Forum's San concedes that there are mixed views about dam-building and
the economic impact involved for the potential affected communities. "Is
there a real need for electricity in Thailand? Yes. But have the economics
been thought through, have any preliminary contracts for power export from
Cambodia to Thailand actually been signed? No. We want to see a good
economic analysis, including a full cost-benefit analysis before projects go
ahead," San said.

(Inter Press Service with editing by Asia Times Online)

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