Laos Agrees to More Scrutiny on Mekong Dam After Calls for Delay

Laos agreed to open a proposed hydropower project along the Mekong River to further scrutiny from neighboring countries, after Vietnam previously called for a delay in developing the dam.

The Don Sahong hydropower project, which had been submitted under a procedure known as notification, will now instead undergo a process known as prior consultation, giving member nations the opportunity to address any harmful effects on the environment, according to the Mekong River Commission, which works with member nations to promote sustainable development of the Southeast Asian artery.

“This shows some willingness to work together with other member countries, but I’m not sure if one can read too much into the change in language,” said Phuong Nguyen, a research associate at the Washington-based Center for Strategic and International Studies.

“This may be partly an attempt to work with other member countries and partly rhetorical, as long as Laos doesn’t have any other significant economic alternatives to dam-building,” Nguyen said in a telephone interview.

The Lao government said in a statement at a meeting yesterday of the commission’s council in Bangkok that it is committed to developing the Don Sahong project in a “responsible and sustainable manner” and that hydropower development is a top priority and key to stimulating the Lao economy.

‘On the Record’

“The change from notification to prior consultation means that everything we have put on the table will be put on the record,” the Lao government said in the statement. “The prior consultation process will formalize our exchange of ideas, and further demonstrates the Lao People’s Democratic Republic’s pledge to work openly and in close cooperation with member countries and development partners.”

Malaysia’s Mega First (MFCB) Corp. agreed in 2008 to build and operate Don Sahong and said in April that construction of the dam is expected to start this year and finish in 2019. Vietnam’s government in April called for a delay in construction until at least the end of 2015 and said this month it would “carefully study” the environmental impact of the Don Sahong project.

The prior consultation process “ allows the other member countries to bring forward in a more formal manner their concern,” said Hans Guttman, the chief executive of the Mekong River Commission secretariat, speaking to journalists late yesterday in Bangkok after a meeting of the commission. “Much like in the Xayaburi case, it is still a sovereign decision by a member country whether they go ahead with a project or not.”

Xayaburi Project

The Xayaburi hydropower project, which is in northwestern Laos, went through the prior consultation process before construction began. Thailand’s Ch. Karnchang (CK) Pcl, which has a stake in Xayaburi, said in March it has accelerated construction and there has been “substantial progress.”

In a 2011 filing on Xayaburi, Vietnam’s government said that the “limited timeframe of the prior consultation was not adequate to facilitate the achievement of the process’s objectives,” and asked for the project to be postponed for at least 10 years.

“Upstream hydropower development, especially the mainstream cascade, will present serious threats to the Mekong Delta, in particular saline intrusion, reduced fisheries and agricultural productivities, and degradation of bio-diversity,” Vietnam’s government said in the 2011 submission on Xayaburi.

Near Cambodia

The Don Sahong dam would be built in the far south of Laos, near the country’s border with Cambodia. The plan calls for the construction of a 260-megawatt power station, with the majority of energy generated to be exported and Thailand and Cambodia the primary target markets, according to a 2013 environmental impact assessment posted on the river commission’s website.

The commission will await a communication from Laos on switching to the prior consultation process, and a working group will be established with representatives from Cambodia, Laos, Thailand and Vietnam, according to Guttman, who said the prior consultation procedures don’t clearly stipulate whether field work can proceed during the process and that member countries would likely raise the issue with Laos.

“It appears that the Lao government has half-blinked at the Bangkok meeting, but will be able to continue work on the Don Sahong site,” said Milton Osborne, a non-resident fellow at the Lowy Institute for International Policy in Sydney.

Thailand appreciates Laos’s decision to switch to the prior consultation process, which normally takes at least six months, said Chote Trachu, Thailand’s permanent secretary for natural resources and environment.

“Laos told us they won’t start” construction during the process, Chote told reporters in Bangkok late yesterday. “Still, there is no clear rule on that.”

To contact the reporters on this story: Suttinee Yuvejwattana in Bangkok at suttinee1@bloomberg.net; Jason Folkmanis in Ho Chi Minh City at folkmanis@bloomberg.net

To contact the editors responsible for this story: Tony Jordan at tjordan3@bloomberg.net

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