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Laos to Delay Mekong River Dam, Agrees to Further Studies

Dec. 8 (Bloomberg) -- Laos agreed to delay construction of a $3.7 billion hydropower dam on the Mekong River to further study concerns among neighboring countries that the project would disrupt fisheries and rice production downstream.

Laos, Cambodia, Vietnam and Thailand will ask Japan’s government “and other international development partners” to help assess the impact of planned hydropower dams on the Mekong, according to a joint statement today. Vietnam earlier recommended a 10-year delay for all Mekong hydropower projects.

Opposition to the Xayaburi dam may force Laos to reassess plans to build as many as 10 others on the Mekong, which winds through Myanmar, Thailand and Cambodia from its source in China’s Tibetan plateau. About 60 million people depend on the river and its tributaries for food, water and transportation.

“Further study will provide a more complete picture for the four countries to be able to further discuss the development and management of their shared resources,” Lim Kean Hor, Cambodia’s minister of water resources and a member of the Mekong River Commission, said today after a meeting of the intergovernmental body in Siem Reap, Cambodia.

Laos, a landlocked nation of six million people and Southeast Asia’s smallest economy, plans to expand its generating capacity and sell electricity to neighbors including Thailand, the main financial backer of the Xayaburi project.

Complex Ecosystem

In April, Laos proposed to end a review of Xayaburi called for under a 1995 agreement between the Mekong countries requiring prior consultations before building hydropower plants on the river. Officials agreed to hold a ministerial meeting this week in Siem Reap to discuss opposition to the project.

The Xayaburi Dam would irreversibly alter the Mekong River’s complex ecosystem, jeopardizing the lives and food security of millions of people, International Rivers, a Berkeley, California-based nonprofit group that aims to protect rivers and human rights, said on its website.

Laos may have about 38,000 megawatts of installed capacity supply by 2020, about 15 times greater than its domestic needs, according to a Sept. 8 presentation by state-owned Electricite du Laos at a conference in Hanoi. Hydropower and mining projects are set to underpin economic growth that may reach 7.7 percent this year, the Asian Development Bank said in an April 7 report.

Thailand last year made an initial agreement to buy 95 percent of the electricity from the Xayaburi plant, which will have a capacity of 1,285 megawatts.

Ch. Karnchang Pcl, Thailand’s third-biggest construction company by market value, owns a 57.5 percent stake in the Xayaburi power project. PTT Pcl, Thailand’s biggest company, has a 25 percent stake and Electricity Generating Pcl owns 12.5 percent.

To contact the reporters on this story: Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net

To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net

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