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EXAMPLE ENVIRONMENTAL IMPACT ASSESSMENT FOR A LARGE DAMIN THE MEKONG RIVER BASIN

They hydropower potential of theMekong River Basin (MRB) is huge, withone Mekong River Commission (MRC)study estimating a potential of nearly40,000 megawatts. Riparian countriesin the Basin are eager to utilize some ofthis potential. More than 200 damshave been proposed to date for theMekong River and its tributaries. Damsand other water diversion projects havebeen initiated inrecent years togenerate power,control flooding andimprove irrigation foragriculture. Thebenefits andeconomic gains fromthese projects aresubstantial.

With the promiseof economic gains from hydropowerand other development projects in theMekong River comes the potential forsevere environmental and socialimpacts. Potential impacts can includecollapse of fisheries as upstream accessto millions of fish is blocked and fishmigration routes are destroyed,inundation of ecologically-valuableforest habitat, and displacement ofhuman settlements.

There are currently about 20 largedams on the tributaries of the MekongRiver, and more are inevitable in thefuture. Governments of MRB ripariancountries are faced with the challengeof managing this development toprotect fisheries and minimizeenvironmental and social damage. Allthe countries of the MRB recognize theneed to work together to equitably

manage the development of the riverand its riparian ecosystems. Asupstream countries build dams andreservoirs to remove more water fortheir own purposes, countriesdownstream are faced with reducedwater availability. In addition, largescale unplanned development of theMekong River could divert or containtoo much water, which could lead to

droughts or floods inthe Basin.

In this example, weexamine howenvironmental impactassessment (EIA) canbe applied to guidehydropowerdevelopment in MRBriparian countries. TheNam Theun 2

hydroelectric project in central Lao PDRis profiled to illustrate how EIA caninform the decision-making process andminimize environmental impacts.Necessary components of an EIA arenoted and weaknesses of the EIAalready completed for this project arehighlighted to provide insights into thechallenges faced by EIA practitioners inassessing such a large project whichcould potentially cause environmentalimpacts in Lao PDR and in downstreamriparian countries.

DESCRIPTION OF THE PROJECTThe Nam Thun 2 hydropower

project is to be located on the NakaiPlateau of Khammouane province ofcentral Laos. The project will utilizewater collected from the Nam Theun

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watershed in the Annamite Mountains.A maximum of 210 m3/sec will bediverted out of the river for powerproduction and then dischargedthrough a series of channels into the XeBangfai River, in a separate river basinwhich flows into the Mekong Riverabout 40 km downstream of Thakhek.The 50 m high dam will impoundapproximately 450 km2.

Nearly all the power generated bythe Nam Theun 2 project will be sold toThailand. The project is of higheconomic importance in terms ofincome generated. Conservativeestimates of net cash flow to the Laosgovernment average US$33 millionannually from project initiation throughthe life of the concession agreement.

The developers involved in thisproject are the government of Laos withfunding provided by the World Bank,three Thai development companies, anAustralian engineering and constructioncompany, and a French power company.These private investors are collectivelyknown as the Nam Theun ElectricityConsortium. The Laos government willown 25 percent of the developmentinitially, and it will become thegovernment’s full property after 25years.

The proposed Nam Theun 2hydropower project will be locatedapproximately 50 km upstream fromthe existing Nam Theun-Hinbounhydropower project, which commencedoperation in 1998. Lessons learned incompleting an THHP EIA for the latterproject will be highlighted as potentialcautions for the Nam Theun 2 project.

Aspects of concern from both anecological and soci-economicperspective relating to the Nam theun 2development include:

• Logging and land clearing in thereservoir area

• Land clearing and grading in thedam and power plant constructionareas

• Construction of the dam andsupporting impoundment structures

• Construction of the power plant.

PURPOSE AND NEED FOR THEPROJECT

Proponents of large damhydropower projects in developingcountries often cite increased revenuein the recipient country as the singlemost important reason to construct theproject. Notwithstanding theimportance of revenue generation,many offsetting issues need to beconsidered in project justificationincluding potential impacts to thenatural environment and to localcommunities.

From a larger perspective,governments of the riparian countrieswill want to closely examine wherebenefits from a large hydropowerproject will go. Will the country receivethe majority of benefits, or will thosego to other project investors? Netbenefits could even end up beingrealized by the countries purchasing thepower – they could enjoy cheap power,while incurring none of the social orenvironmental costs of the project.

DESCRIPTION OF THEENVIRONMENT

Detailed information on the naturalenvironment of the proposed dam siteshould be provided in the EIA report.For example, reviewers will want to seea detailed list of resident wildlife andplant species, as well as a list of any

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threatened or endangered species thatwould suffer loss of habitat, eitherthrough flooding or reduceddownstream water flows. Wildlife andfish migration patterns also need to bedescribed in the EIA report. Inaddition, the presence of sensitiveecological areas that could potentiallysuffer from direct and/or indirectimpacts must be documented.

Physical characteristics of theproject site should also be documented.Data on hydrological regimes, rainfallpatterns, soil types and distribution,water chemistry and water quality isrequired. Data can be gathered eitherfrom individual studies designedspecifically for the proposed project, orfrom existing information sources. If nodata exist for the project site, availabledata from similar watersheds couldpossibly provide some insights into theproject site.

Ideally, a full physical and biologicaldescription of the Nakai Plateau shouldbe conducted, with the findingpresented in the EIA report. Theplateau has pine forests, swamps andgrasslands, which all provide importanthabitat for local wildlife populations.Animal species which could beimpacted by the project include: White-winged duck, Clouded leopard, Asiangolden cat, Sun bear, elephant, tiger,Asiatic black bear, the Lesser fish eagle,several species of otters and theBlythe’s kingfisher. Although a largeportion of the project area had alreadybeen logged prior to the decision onwhether to permit the Nam Theun 2project, this prior activity should not beconsidered as a compelling reason whythe project should be allowed toproceed. The argument thatconstruction of the dam and reservoirwould not cause any further undueenvironmental harm would not be

considered relevant according tocurrent EIA practices.

ANTICIPATED ENVIRONMENTALIMPACTS

Environmental impacts associatedwith large-scale hydropower projectsare abundant and varied. Although onlyobvious potential impacts areconsidered here, it is important to keepin mind that for every major impactassociated with the project, there couldbe several indirect impacts. Potentialdirect environmental impacts aresummarized in Table 1.

Impacts Due to the Dam andReservoir

A reservoir upstream of the dam willflood approximately 450 km2 ofriverbed, floodplain and upland habitat.The reservoir of the Nam Theun 2 willinundate a wide variety of terrestrialand river habitat types, includingconsiderable tropical forest habitat.These habitats which support diverseecosystems found in Laos will bereplaced by a reservoir that provideshabitat for a much narrower range ofspecies.

The downstream morphology ofdownstream riverbeds and riverbanks,are also affected by changes in waterlevels and sediment loading rates. Allrivers carry some sediment as they flowthrough their watershed. When theriver is held behind a dam in thereservoir for a long period of time,most of the sediment will be trapped inthe reservoir. These sediment particleswill settle to the bottom of thereservoir, so that the water releasedfrom the dam will be much clearer.

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Table 1 Some major environmental impacts of large dam/reservoirdevelopments

IMPACTS DUE TO THE DAM ANDRESERVOIR

IMPACTS DUE TO DAM OPERATION

• Imposition of a reservoir in place of a naturalriver valley (loss of habitat)

• Changes in downstream morphology of riverbeddelta due to altered sediment load (increasederosion downstream of the dam)

• Heavy downstream sediment loading duringconstruction of dam and power plant

• Changes in downstream water quality – effectson river temperature, nutrient load, turbidity,dissolved gases, concentration of heavy metalsand minerals

• Reduction of biodiversity due to blocking ofmovement of organisms and because of abovechanges

• Changes in downstream hydrology• Changes in total flows• Change in seasonal flows• Short-term fluctuations (sometimes daily or

hourly)• Change in extreme high and low flows• Changes in downstream morphology caused by

altered flow pattern• Changes in downstream water quality caused

by altered flow pattern• Reduction in riverine/riparian floodplain habitat

diversity, especially due to elimination of floods

Clear water below a dam is said to be‘hungry’ water, in that it will recaptureits sediment load by eroding thedownstream riverbed and banks.Eventually, the more easily erodablematerial below the dam will be carriedaway, leaving a rocky stream bed andpoorer habitat for aquatic life. Overtime, the river downstream of the damwill become narrower and deeper,reducing habitat quality within the riverand the surrounding riparian areas.

Downstream water quality will alsobe affected by the construction of thedam and reservoir. Water temperature,turbidity, dissolved gases andconcentrations of heavy metals will allchange as a result of the impoundment.When water is held within the reservoir,its temperature increases, nutrients areremoved (as they settle out of the watercolumn), forests are flooded anddecompose (raising biochemical oxygendemand levels), and large mats ofaquatic plants may colonize therelatively stagnant waters of thereservoir. Each of these effects impactsriverine ecology. Particularly severe

effects often occur in the period shortlyfollowing impoundment. As submergedvegetation and soil decompose, oxygenis heavily depleted. This de-oxygenatedwater can be lethal to aquatic life withinthe reservoir and downstream in theriver.

A reduction of biodiversity followingconstruction of a large dam andreservoir is almost inevitable. Theselarge-scale projects tend to fragmentriver ecosystems, isolating aquaticpopulations living upstream anddownstream of the dam and cutting offmigration pathways. Of particularimportance is the blocking of spawningfish traveling up-river and then ofsmolts returning back down-river. Ineither case, the dam can be anenormous obstacle, often with greatimpact on fish populations. In addition,almost all dams reduce normal flooding,effectively isolating the river from itsfloodplain. Numerous aquatic andterrestrial species will be unable toadapt to these changes in water levelsand flow regimes. The wholeecosystem will experience a drop in

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MERCURY AND HYDRO ELECTRICITY

One of the most unwelcome impacts of new reservoirs can be elevated levels ofmethylmercury that result from the rotting of submerged vegetation in anoxic (no oxygen)conditions. Harmless natural deposits of mercury in the environment prior to inundationare activated through the process of methylation when the site is flooded. As a result ofthe anoxic and slightly acidic conditions, the toxic, activated deposits of methylmercuryare released into the aquatic environment. Methylmercury, being hydrophobic (hatingwater) binds readily with mineral and organic particles like sediments and fatty tissue ofaquatic biota.

Methylmercury is readily absorbed and poorly eliminated by vertebrates. Itbiomagnifies through the food web, such that concentrations in piscivorous (fish-eating)fish are typically higher than in smaller forage fish and benthic invertebrates.Consumption of these fish by local communities can pose a significant health risk, asconcentrations of methylmercury can be high enough to cause mercury poisoning inhumans.

It is possible that elevated concentrations of methylmercury in reservoir water may notbe a permanent condition. Levels generally peak 3 to 5 years after inundation, and mayreturn to pre-impoundment levels after 10 to 20 years. However, the risks to aquatic lifeand human health can remain beyond this time frame. Sublethal effects on fish canreduce some populations to levels that can take much longer to recover. In addition, theeffects of elevated mercury concentrations in humans may be felt beyond this seeminglybrief time frame.

Potential mercury contamination to humans and aquatic life is a significantenvironmental impact that must be addressed when deciding whether to approve a large-scale dam/reservoir project.

species diversity, with a fewer numberof species in greater abundancesremaining and thriving in the disturbedconditions.

The impacts of all these changes arefurther magnified by changes in theflow pattern of the river downstream.Drastic hydrologic changes, whether intotal stream flow, seasonal timing offlows, or even short-term fluctuationsdue to dam releases, generate a rangeof impacts on river ecosystems. This isbecause the life of rivers is so closelylinked to existing flow patterns. Anydisruption to these flows is bound tohave substantial impacts.

ANTICIPATED SOCIAL IMPACTS

ResettlementApproximately 400 families of

various ethnic groups live on the NakaiPlateau, with the great majority of themliving in villages that will be moved as aresult of the project. It is expected thatabout 4,500 people will have to move ifthe dam and reservoir are constructed.They are among the poorest people inLaos with an average income of about$100 as compared to $280 national percapita. These communities havetraditionally cultivated rice, huntedanimals for food, raised livestock, fishedand gathered non-timber forestproducts for household use.Agriculture currently predominates inthe Plateau.

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While numerous public meetingshave been held regarding the socialimpacts of this project, it isacknowledged that many meetingattendees were government officialsand workers and not communityrepresentatives. In addition, theinformation made available was notreadily accessible to the directly-affected communities. The technicalinformation, often presented in English,was also not easily understood by localpeople. These deficiencies relating topublic involvement are contrary tocurrent EIA practice which places aburden on project proponents to findthe best way of providing usefulinformation to local communities.

The most significant project-relatedimpacts to villagers resettled to higherground would be loss of fisheries andloss of adequate vegetable production.Both the abundance and variety of fishspecies in the reservoir is expected tobe lower compared to the river in itsnatural condition. Large fish typicallybecome rare, and fishing in the deepwater of a reservoir is often not asproductive as fishing in a river. Many ofthe subsistence vegetable gardens thatexist prior to construction of thereservoir would also be flooded.Villagers who plant gardens along thebanks of the reservoir often do notobtain the same crop yields, as the soilson high ground are not as fertile as thealluvial soils that were planted alongthe riverbanks in the dry season.

Downstream CommunitiesConstruction of the dam and the

subsequent river diversion will havemajor impacts on flow regimes andfisheries both upstream anddownstream of the dam and in the XeBangfai watershed. The project has the

potential to affect the livelihood andfood source of an additional 40,000people located downstream of thereservoir.

Fishing is a primary source ofincome for many area residents.However, sharp declines in downstreamwater levels due to power plantoperations, particularly during the dryseason, will often lead to significantdrops in some fish populations. Inaddition, some large and valuable fishspecies will no longer be able tomigrate upriver, either because ofrestricted access or lack of adequateflows. Villagers have noted that lowwater levels have left many brood-stockfish especially vulnerable to capturefisheries. They fear that this couldjeopardize the sustainability of somefish stocks. In addition, low waterlevels often seriously impede boattraffic, complicating travel and makingtransport of products to markets moredifficult and time consuming.

Fishing equipment are easily lost asa result of unpredictable changes inwater levels caused by operation of thedam. Fishing downstream of the damcan become a less-secure source ofincome and food, as it will beimpossible for villagers to know whenwater levels will suddenly change.

Vegetable production along theriverbanks is often noted to decreasedownstream of large dams. Soil fertilityoften declines, as areas previouslyinundated no longer receive upstreamnutrients.

CompensationAll of these impacts, both to

villagers that relocate along the banksof the reservoir and to downstreamresidents need to be considered in theproject EIA report and corresponding

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cost-benefit analysis. Loss of livelihood,land and sustenance are all real costswhich should enter into the calculationsof overall project cost. Villagers shouldreceive adequate compensation forimpacts directly and indirectlyassociated with the project.

Because of the magnitude ofpotential impacts to local communities,all compensation issues should be dealtwith prior to project implementation. Apost-project assessment should also becompleted to ensure that compensationhas been adequate. Possiblecompensation measures include:

• Financial compensation for land lostto inundation and lost revenue fromfishery and crop harvests

• Project proponents may need toprovide villages with wells, as theincreased turbidity resulting fromthe project may render surfacewaters undrinkable

• Subsidized electricity for relocatedvillagers and for impacteddownstream communities

• Villagers could be given jobs at thepower plant

• Reservoir fishing gear could beprovided to villagers

• Villagers could be compensated forlost revenues from the vegetablegardens they traditionally grow onthe riverbanks

• Project proponents could installbridges over flooded areas, enablingvillagers to maintain access tofarming, fishing and huntinggrounds

• Roofing and home buildingmaterials could be provided to thevillagers as partial compensation fortheir losses

• Resettlement locations should becarefully chosen to ensure that newareas are comparable to existingsettled areas (i.e., good soil qualityfor agriculture).

CONSIDERATION OFALTERNATIVES

Three types of alternatives exist forthe Nam Theun 2 project.

No-Project AlternativeEnvironmental managers and the

Laos government need to considerwhether their country would be anybetter or worse off if the project wasnever undertaken. Is the social andenvironmental status quo acceptable?Or are the environmental and socialcosts of the project outweighed by theoverall public good that will result fromthe sale of hydropower?

The nature of the future electricitymarket is a key factor in decidingwhether to approve the project. Dropsin energy demand due to depressedeconomies of the purchasing countriescould significantly affect the price perunit of power sold. In the worst case,the demand for the power could nearlydisappear. Due to the long life andlarge expense of large dam hydroprojects, long-term market security forpower sales should be seen as asignificant requirement in the decisionto build power plants. Once the dam isimpounding and the plant is producingelectricity, a viable long-term market forsale of the power is necessary in orderto recover project costs and foranticipated economic gains to berealized.

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Existing Hydro Plant 50 kmDownstream

Decision makers will have tocarefully examine whether the existingNam Theun-Hinboun project couldsupply the same (or similar) quantitiesof power for sale to other countries.Other sites could perhaps beconsidered, as the Nam Theun River isalready experiencing dam/reservoirrelated impacts. Existing environmentalimpacts may be assimilated by thewatershed without a significant overalldeterioration of habitat and waterquality within the watershed. However,a second dam in the same watershedcould exert enough additional impactssuch that the ecosystem could notrecover, and irreparable changes inbiodiversity, coupled with reducedwater quality, could permanentlydegrade the watershed.

Alternatives During Construction,Operation and Maintenance

Alternatives often exist during theconstruction and operation phases oflarge dam/reservoir projects. Changesin construction schedules and methodscan be considered to reduce theseverity of environmental impacts ofspecific construction activities. Duringoperation of the dam, alternatives canbe considered regarding the timing andquantity of water releases and thequantity of water removed for irrigationor diversion purposes

POTENTIAL MITIGATIONMEASURES

Eliminating all of the environmentalimpacts of a large dam and reservoirlike the Nam Theun 2 is impossible.Part of the exercise of an EIA is toaccurately determine whatenvironmental resources and ecological

functions stand to be irreversibly lost asa result of a project. Once this isknown, decision makers must choosewhether to accept these impacts inorder to gain the expected socialbenefits. Unfortunately, large-scaleprojects in developing countries oftenproceed without an adequateunderstanding of the resultingenvironmental damage and social costs.If the environmental impacts are wellunderstood and acknowledged and adecision is made to proceed with theproject, then attention shifts todetermining how best to mitigateanticipated impacts. This is where thecareful selection of environmentalmitigation options is critical.

Several mitigation options exist forlarge-scale hydropower projects.Because impacts are usually significantand irreversible, it is recognized thatthese mitigation options can onlyreduce the severity of some of theimpacts and not avoid them entirely.Mitigation options are described in thefollowing sections.

Removal of Timber and VegetationPrior to Impoundment

In their haste to beginimpoundment, hydropower projectproponents sometimes proceed withoutfully clearing the trees and vegetation inthe new reservoir. Clearing ofvegetation is critical to avoid depletionof oxygen in the reservoir. Anabundance of decomposing vegetationin a newly-created reservoir could alsopotentially lead to toxic levels ofmethylmercury in the water releasedfrom the dam, potentially harming fishand other aquatic biota downstream.Ideally, the reservoir site should becleared and left fallow for at least a yearprior to impounding to avoid this and

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other problems relating todecomposing vegetation.

Armoring of DownstreamRiverbanks

Armoring and reinforcement ofselect stretches of downstreamriverbanks can help reduce bankerosion. Vulnerable areas such as bankssubjected to high flow velocities orthose near the dam spillway, could bereinforced with concrete or riprap (i.e.,interlocking stones). Armoring isexpensive and requires maintenancethroughout the life of the dam, but itcan be helpful in protecting against theerosive forces of the release water.

Fish PassesAs noted previously, the Nam Theun

2 and other large dam projects have thepotential to block fish migrationcorridors. To help alleviate thisproblem fish passage structures can beconstructed in an effort to restore thelinear movement of fish up and downriver. Such structures have beenconstructed in Thailand, but so far nonehas been installed at dams in Laos orCambodia.

Perhaps the single biggest obstacleto the effective design of fish passagestructures in the MRB is a lack ofbiological data on local fish species.Existing fish ladder designs from othercountries have met with limitedsuccess, because they require constantflows in order to operate effectively.Flow rates for dam releases in the MRBtypically are highly variable, even withina short time window.

Fish locks have been installed at afew sites and have achieved somesuccess. They have the main advantageof enabling the movement of fish both

up and down river, yet they areexpensive and require regularattendance and maintenance.

When the Nam Theun-Hinbounproject was constructed, no fishpassages were installed. As expected,the main wet-season spawningmigration in the Theun River wasblocked in 1998, the dam’s first year ofoperation. Compensation is now theonly option for local communities whohave suffered damage to their fisheriesboth upstream and downstream of thedam.

The effectiveness of fish passagestructures in the MRB will require moreresearch into the life histories andmigratory behaviour of importantMekong River fish species. Ideally, theproponents of new dam developmentprojects should be responsible forinvestigating fish pass options as part ofthe project’s EIA before the project isapproved. Additional research shouldalso be funded to determine whichtypes of fish passage structures bestsuit MRB fish species.

CompensationEcological compensation in other

ecosystems within the Nam Theun Riverwatershed is another option that couldbe required as a condition for approvalof the Nam Theun 2 project. Under thisoption, a certain portion of the revenuegenerated by power sales would bededicated to preservation andrestoration of sensitive ecosystemswithin the impacted watershed.Particularly valuable natural sites (i.e.,either for their habitat or water qualityfunctions) would be selected and theproject proponent required to purchasea conservation easement on the site,therefore protecting it against anyfuture development. A percentage of

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revenues from the power sales couldalso be allocated to restoration andenhancement of other degradedhabitat. For example, the Nam TheunElectricity Consortium could berequired to reforest an area that wasrecently logged. Or they mightcontribute funds to the Giant catfishcaptive breeding program or commitmoney to research into improved fishpassage designs.

ENVIRONMENTAL MONITORINGPROGRAM

Baseline environmental monitoringof resident fish species and theirmigration patterns is an importantcomponent of the Nam Theun 2 EIAprocess. Pre-development hydrologicdata should also be collected, includingseasonal variations in flow rates andvolumes. Both the fish species data andthe hydrologic data will be valuable indesigning effective fish passagestructures to maintain fish migrationroutes. Resident riparian plant andanimal species should also bedocumented, as these species will losetheir habitat when the dam impounds.

Baseline water quality parameterswhich should also be examined include:biochemical oxygen demand, totalsuspended solids, dissolved oxygen,turbidity, temperature and mercuryconcentrations in water and sediment.Significant changes in these parametersare often associated with large damsand reservoirs, and these impacts needto be accurately quantified.

Throughout the life of the project,these same water quality parametersshould continue to be monitored.Reservoir and riverine fish tissue couldalso be sampled periodically formercury concentrations, as a localhealth risk may exist from the

consumption of fish with high mercurybody burdens. Fish species andabundances both upstream anddownstream of the dam should also bemonitored on an ongoing basis.

PUBLIC INVOLVEMENTCurrently accepted EIA practice

suggests that some improvementscould be made to the publicinvolvement process for the Nam Theun2 project. The decision to proceed withthe project had been made well beforethe public was invited to participate inthe decision-making process and themajority of public consultation tookplace after the project’s design hadbeen finalized. More substantiveinvolvement of local people concerningresettlement options and mitigationmeasures, rather than discussions onwhether the local communitiessupported the project, would bedesirable. Adequate information mayalso not have been made available tothe local people.

Ideally, project details should begiven to local people in the earliestplanning stages of such a large-scalehydropower project. Generallyaccepted guidelines for adequate publicinvolvement include:

• Ensure that the public has anopportunity to review and commenton comprehensive study reportsbefore any decisions are made

• Governments and internationallending agencies should provideguidance to project proponents onhow to effectively involve the public

• Funding should be provided toconcerned groups so that they canparticipate in the project review andfinal decision making.

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ECONOMIC ANALYSISThe government of Laos anticipates

using revenues generated by NamTheun 2 project to help reduce thecountry’s dependence on timberexports and royalties by as much as 45%thereby allowing a more sustainable useof the country’s forestry resources. Theeconomic feasibility study for theproject was based on a price of 5.7cents ($US) per kilowatt-hour butsubsequently an agreement was signedwith the Electricity GeneratingAuthority of Thailand (EGAT) for 4.4cent per kWh. The feasibility study wasalso based on the assumption that theThai economy would maintain a stablebaht and low inflation. This assumptionmay not hold true in the long term.

Lending organizations havestipulated that any revenue generatedwill go first to repayment of the loansto international creditors, and only thento equity holders such as the Laosgovernment. In addition, privateinvestors have been assured ofcompensation for any losses resultingfrom government policy or legalchanges. However, no parallelguarantee exists for the people orgovernment of Laos if the expectedbenefits of the hydropower project donot materialize even though they arebearing most of the environmental andsocial risks of the project.

In addition to uncertainty faced by theLaos government related to projectfunding and cost recovery predictions,they must also consider the increasingup-front costs of the project. For avariety of reasons, dams are becomingmore expensive. Reasons include:

• Increasing technical and constructionproblems encountered in buildingand maintaining dams (e.g., reduced

lifespan of dams due to acceleratedsedimentation of reservoirs)

• Increasing requirements to pay formitigation of social andenvironmental impacts

• Delays due to public opposition andother problems.

Compounding the economics of damdevelopment is the fact thathydropower is a highly inflexible sourceof power, vulnerable to changes indemand. A large project can take 10years to complete and bring up to fullcapacity of power generation. Duringthat time, demand for power couldchange greatly, perhaps eliminating theneed for the dam or shifting thedemand to another geographic region.

CONCLUSIONS ANDRECOMMENDATIONS

Clearly, more extensive baselinemonitoring of the natural environmentprior to project approval would havebeen useful in assessing potentialimpacts and in selecting appropriatemitigation methods for the Nam Theun2 hydropower project. Increasedknowledge of local fish species andtheir migration patterns can be used todesign an effective fish passagestructures for the dam. In addition,monitoring of biological and chemicalparameters in the water and in aquaticbiota can be vital in alertinggovernment agencies and localcommunities to potential public healthhazards, such as elevated mercuryconcentrations in fish tissues. It isimportant to understand that largedams often have many hidden socialand environmental costs. The moreknowledge of potential project impactsthat can be obtained, the smoother thedecision-making process.

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Increasing emphasis on potentialecological and social impacts of large-scale hydropower development projectsin MRB riparian countries would bedesirable in assessing future projects.In contrast to economic considerations,there is a tendency to under-representenvironmental impacts in decidingwhether projects should proceed.Closer scrutiny of potential impacts tonatural resources and localcommunities may reveal that impactsare more significant than expected,requiring extensive mitigation andcompensation which may make theproject not economically feasible.