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DEVELOPMENT-CAMBODIA: Bowing to Regional Hydropower Demands

Andrew Nette - Newsmekong

PHNOM PENH, Mar 20 2008 (IPS) - For the Cambodian government, hydropower development represents great economic opportunities. But for non-government organisations (NGOs), and the communities they serve, dams pose severe social and environmental impacts.

Like neighbouring Laos in the 1990s, donors, electricity-hungry nations such as Thailand and Vietnam and business interests, particularly from China, are keen to make Cambodia a major generator of hydropower.

Plans for developing Cambodia’s hydropower potential remained on hold due to political instability and the economic crisis that struck the region in the latter part of the last decade. But with the rapid economic growth of countries in the region – including Cambodia whose GDP growth in 2006 exceeded 10 percent – hydropower is back on the agenda.

As he told a donors’ meeting last year, Cambodia’s Foreign Minister Nor Namhong said that his government wanted Cambodia to be the “battery of South-east Asia”.

A 2003 plan developed by the Ministry of Mines, Minerals and Energy with the support of the Mekong River Commission estimated that Cambodia has the potential to generate 10,000 megawatts of energy for internal use and export. Almost 50 percent of this would come from projects along the mainstream Mekong River running through Cambodia.

“We are not against development or hydropower,” said Ngy San, deputy executive director of the NGO Forum, the umbrella body representing Cambodia’s NGOs. “What we want to do is to ensure poverty reduction and sustainable development, which is also the government’s plan.”

Cambodian and international NGOs are warning that large-scale hydropower development could create serious problems, impacting on some of the country’s most pristine ecosystems and reducing water flow and fisheries with major consequences for the livelihoods of thousands of people.

“We are also working to ensure that Cambodian decision-makers will learn the lesson of other countries in relation to hydropower, and not repeat those mistakes,” said San.

What is different in Cambodia in 2008 is the role of China.

Political and economic ties between China and Cambodia have grown enormously over the last decade. China is the nation’s single largest investor, and Chinese state companies, often financed by state-owned financial institutions such as the Chinese Export-Import Bank, are the main players in hydropower dams.

Phnom Penh has identified approximately 14 priority projects of which six are currently under development, all by Chinese companies.

For instance, China’s Sinohydro is building a 145-metre dam on the Kamchay River in Kampot province. This is China’s biggest investment in the country. Another Yunnan-based company is working on the Steung Atai dam.

There is no disagreement that Cambodia needs to generate more power. Currently, only 20 percent of the population has access to cheap, reliable sources of electricity, mainly in urban areas. Demand for electricity is estimated to be growing at 20 percent a year.

“It is simple, development needs electricity,” said Touch Seang Tana, an advisor to Cambodia’s Council of Ministers and fisheries expert. “Power is currently very expensive in Cambodia, particularly in regional areas that are the most disadvantaged. The government wants to provide services to the rural communities but this is difficult to do without electricity.”

“The actual number of people impacted negatively (by dams) is small and overall the entire benefit to the nation is significant,” he said. The government has to balance all these factors.”

“The demand exists, that is true,” agreed San. “The rush to develop our hydropower potential needs very careful study. However, it must include consultation with impacted communities, and comply with all relevant national and international laws.”

“There are some in the government that share our concerns, but they find it difficult to act because they are not the real decision makers,” he added.

As is the case with much government policymaking in Cambodia, exactly what the real decision-making process is in relation to hydropower is a major issue for NGOs, who say the process completely lacks transparency.

“The biggest barrier is actually getting to talk with the Cambodian government about what is going on,” said San. “They just treat as us opponents, as people who complain and create problems.”

While a plethora of departments and regulatory bodies participate in the process, observers say the agenda appears to be largely set by the Ministry of Industry Mines and Energy, with the direct support of Cambodian Prime Minister Hun Sen.

Donors continue to play an important supporting role, particularly the Asian Development Bank (AsDB) through its Mekong Power Grid Plan. This envisages an interconnected power grid across the region, a plan it has been pushing since the early nineties.

The Manila-based AsDB initially envisages that Cambodia will be a net electricity importer, but will become an exporter once the country’s full hydropower potential is realised.

The lack of transparency is accentuated in relation to China. “There is almost no information in the public domain on the financing arrangements for Cambodia’s hydropower projects,” states a report released in January by the U.S.-based International Rivers Network (IRN) and the NGO Forum.

“The lack of information from the Chinese dam builders is very disturbing, they do not consult or share information,” said Seng Bunra, country director for Conservation International in Cambodia.

His organisation works in the Cardamom Mountains Protected Forest Area in the south-west of the country. It is one of the largest continuous sections of rainforest left in South-east Asia and home to a number of globally endangered species, including some of the last remaining populations of Asian elephants and Siamese crocodiles.

There are plans to build a number of dams in the protected area, all by Chinese companies.

According to critics, the presence of so many potential hydropower projects in protected forest areas illustrates the fact that the laws to safeguard the environment are insufficient to protect affected communities. The situation is particularly serious, notes the report by the NGO Forum and IRN, given that “compared against the already less than admirable environmental and social standards of Western bilateral donors and export credit agencies … Chinese institutions are noticeably weaker”.

Cambodian and international NGOs are also worried about the impact on fish stocks, water quality and flow, and the relocation of thousands of villagers.

As evidence, they point to the 750 Mw Yali Falls dams on the Se San tributary of the Mekong in Vietnam, which began operating in 2001. Local people claim the dam has been responsible for sudden flooding, causing the deaths of residents in Cambodia and the collapse of fish stocks in the northern Cambodian provinces of Stung Treng and Ratanakiri.

Although Tana conceded that Se San is now a “dead river in terms of fisheries,” he adds that the dam is in “Vietnam’s territory, so what can we do?”

“The surrounding countries are all doing this and we are getting the impacts,” he continued. “Why should we keep our environment pristine, when our neighbours are doing projects that impact us?”

Tana also makes a distinction between development on the tributaries of the Mekong, the impacts of which he believes can be mitigated, and dam-building on the mainstream of the sort widely seen in China and soon to take place in southern Laos, which is far more serious.

One of the projects being examined in Cambodia is the Sambor dam on the mainstream Mekong in central Kratie province. A number of options are being studied, including one that would only block between one-quarter to one fifth of the river and have, according to Tana, only “minimal” impact.

San concedes there are mixed views about dam building among the potential communities that are going to be affected by these.

He insists, however, that even one of the core arguments in support of hydropower, that it will generate income from the sale of power, is unproven.

“Is there a real need for electricity in Thailand? Yes. But has the economics been thought through, have any preliminary contracts for power export from Cambodia to Thailand actually been signed? No. We want to see a good economic analysis, including a full cost-benefit analysis before projects go ahead,” San added.

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