Construction work – including the paving of access roads and clearing of a building site – has begun on the Luang Prabang hydropower dam on the Mekong River in Laos, despite an acknowledgment by Lao officials that several key steps in the project have yet to be completed, RFA has learned.
The 1,460-megawatt Luang Prabang Dam will be built along a stretch of the Mekong that passes through Huai village in Chom Phet district of Luang Prabang province. The site lies about 25 kilometers, or 16 miles, upstream from the ancient town of Luang Prabang, a popular tourist destination and a UNESCO World Heritage Site with historic Buddhist temples.
The U.S. $3 billion project, one of several existing or planned large-scale hydropower projects on the Mekong River mainstream, will be built by Thailand’s Xayaburi Power Company Ltd. and Vietnam’s PetroVietnam Power Corp. The project is being financed by the Luang Prabang Power Company Ltd., a consortium of the Thai and Vietnamese power companies and the Lao government.
It is part of a cascade of 11 Mekong mainstream dams that are the centerpiece of Laos’ controversial economic strategy to become the “battery of Southeast Asia,” generating revenue for the impoverished country by selling electricity to its neighbors. All power produced by the Luang Prabang Dam will be sold to Thailand and Vietnam.
But while authorities have given the dam the green light, and preliminary construction is now underway, officials told RFA that several key steps remain to be completed, including the securing of a power purchase agreement, paying villagers affected by the project compensation, and carrying out a social and environmental assessment.
Officials from the Ministry of Natural Resources and the Environment met with representatives from Thailand’s S. Kansang Co. Ltd., the project builder, on Dec. 6-9 to discuss preliminary construction work, a Lao official with knowledge of the meeting said.
“The Ministry of Natural Resources and Environment met with their counterpart on the pre-dam construction work, such as clearing an area for the dam infrastructure,” he said.
They also discussed the negative social and environmental impacts of the project and compensation for villagers affected by it, said the official, who declined to be named so he could speak freely, told RFA on Tuesday.
“The social and environment impact study and World Heritage Site assessment are close to being finished,” he added, though could not provide a completion date.
The company can only dig out the project area and pave an access road while waiting for a power purchase agreement, or PPA, to be signed.
Those conducting the Heritage Impact Assessment, which takes the significance of historic assets into account when developing and designing projects that may affect them, are still collecting information for the report and do not yet know when they will finish, the officials said.
The assessment will be sent for review to both UNESCO and the Mekong River Commission, an organization that works with governments of Laos, Cambodia, Thailand, and Vietnam to jointly manage shared water resources and the sustainable development of the Mekong River.
Waiting for compensation
The meeting participants also discussed impact of the project on the livelihoods of villagers who have lost land to the project and who will be resettled, including those living in Chomphet district in Luang Prabang province, Hongsa district in Xayabury province, and Nga district in Oudomxay province, the official said.
As part of the plan, villagers must forfeit their farmland and evacuate their homes. More than 2,130 families in 23 villages will be relocated from Luang Prabang and Xayabury provinces, but have received no compensation, which they want before they move.
Based on plans discussed during the meeting, compensation for affected villagers in Nga district will be paid after the beginning of 2023, an official from the Official from the Energy and Mines Department in Oudomxay province told RFA on Tuesday.
“At the beginning of year affected villagers from Nga district, will be evacuated, but they are waiting for company to collect data on their property value and other resources first before being evacuated to a resettlement village,” said the officials who requested anonymity because he was not authorized to talk to the media about the project.
In November, nearly 65 from Huai village in Luang Prabang’s Chomphet district, began receiving payments, though the project developer closed off an access road and prohibited villagers from entering the area, a local resident said.
The man said he saw workers digging a hole for the infrastructure, but did not know how much work they had completed.
“They put a fence around the dam location and are not allowing villagers to enter the areas because it is dangerous,” he told RFA, adding that many trucks go in and out of the project site.
Laos has gone on a two-decade dam-building spree in its drive to become the “battery of Southeast Asia,” with the hope of using the revenues from hydropower to supercharge national development.
But in addition to growing concerns about what environmental impacts those projects and upstream dams built by China are having on the Mekong River basin, the huge investment required is adding to an increasingly unsustainable debt burden for one of the region’s smallest economies. Activists say the lack of a power purchase agreement for the Luang Prabang dam will continue to raise serious questions about its economic viability.
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