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The Cost of Building More Dams in LAOS

THE DEBATE over Laos’ strategy to become the “Battery of Asia” continues months after the deadly disaster at the Xe Pian-Xe Namnoy hydropower dam, even as the Lao government keeps building more dams.

Despite the previous government’s decision to suspend new dam projects and academics’ concerns over the transboundary impacts of dams on the environment and the wellbeing of people in the Mekong River Basin, Lao officials maintain that investing in hydropower dams is necessary to eradicate poverty in the country and boost the economy.

Singthong Phanthamala, head of the River Basin Planning and Development Division of the Lao Water Resources Department, said the country continues to pursue its mission to be a major power supplier in Southeast Asia through investments in dams.

Singthong said Laos had learned an expensive lesson from the collapse of the Xe Pian-Xe Namnoy dam last July. 

He said the government has now come up with stricter regulations for the building and operation of dams to ensure they are safe.

“The government is focusing on water supply, environment preservation and economic development, so our duty is to provide water to all sectors, including power generation, to ensure the prosperity of the country and offer a better quality of life for all citizens,” he said.

Shortly after the dam disaster last year, the government announced it would examine safety standards at all planned dams, suspend new projects and reconsider its “Battery of Asia” policy. The plan was intended to enrich the poor land-locked nation through large-scale hydropower dam development and selling electricity to neighbouring countries.

According to a summary of Electricite Du Laos’ 2018 operations report cited in the newspaper Vientiane Mai last month, the authorities last year were still pushing for dam development while sticking to the objective of becoming the “Battery of Asia”. 

The report revealed that, by the end of 2018, Laos had 53 hydropower dams, 21 of which were small structures with electricity generation capacity under 15 megawatts, while the other 32 were large.

It was also disclosed that 36 more dams were under construction and scheduled for completion by 2020.

From the opposite side of the Mekong River, Maha Sarakham University lecturer Chainarong Setthachua views with concern the reversal of the Lao government’s suspension of dam investments and the resumption of its “Battery of Asia” policy.

“Even though Laos can profit from selling electricity to Thailand and other countries with its ‘Battery of Asia’ policy, and Thai people can enjoy relatively cheap power, this business model has a hidden cost. Lao people will have to pay a heavy price through the loss of traditional livelihoods, degradation of the environment and, in Sanamxay’s case, the loss of many lives,” Chainarong said.

He argued that dam development has been proved to create more poverty among local people, not enrich them. He explained that the dams damage the fragile river ecosystem on which the local population heavily relies for food and profit, especially in the Mekong region. 

“The ‘Battery of Asia’ policy is a product of the post-Cold War rise of neoliberal economics,” he said.

“Even though the government had earlier, wisely, halted consideration of all new hydropower dam projects, the leading international trade agencies and multiple transnational energy investors kept insisting that Laos should carry on with its controversial ‘Battery of Asia’ policy.

“So, the resumption of large-scale dam development in Laos is a sign that transnational energy industrialists are having a very large influence over the government’s policies.”

He stressed that Thai investors are also playing a major part in hydropower investment in Laos. He cited as an example Ch Karnchang borrowing money from many leading Thai banks for the Xayaburi dam in Xayaburi province in northern Laos, which will be the first on the Mekong mainstream south of China. It will sell up to 90 per cent of the electricity produced to Thailand.

The Electricity Generating Authority of Thailand has confirmed it would buy 1,120 megawatts from the Xayaburi dam and 269 from the Nam Ngib dam, by the end of this year. The Electricity Generating Authority of Thailand International has invested in the projects.

Currently, Thailand purchases 3,877 megawatts from Laos, representing 9.16 per cent of its total intake.

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