Laos defies neighbors on dam project: environmentalists

Reuters 23 Jun 11;

(Reuters) - Laos is forging ahead with construction of a controversial $3.5 billion hydropower dam in breach of an agreement to suspend the project pending approval by ministers of neighboring countries, an environmental group said on Thursday.

The Lao government has already given Thai developer Ch Karnchang the go-ahead to resume work on the Xayaburi Dam, informing the company that the Mekong River Commission's (MRC) decision-making process was complete, according to International Rivers, an environmental and human rights group.

"The government of Laos has committed an egregious breach of trust and has joined the ranks of rogue nations," Ame Trandem, a campaigner with International Rivers, said in a statement, citing leaked correspondence.

With its big ambitions to export hydropower, impoverished Laos is dubbed the "battery of Southeast Asia," but experts warn that the Xayaburi project -- one of 11 new dams planned by Laos -- could cause untold environmental damage and spark a food security crisis downstream in Thailand, Vietnam and Cambodia.

Mekong basin countries are bound by treaty to hold inter-governmental consultations before building dams.

After months of pressure from environmentalists and neighboring countries, Laos agreed on April 19 to defer the project until a meeting of ministers of the four countries involved, slated for the end of the year.

However, International Rivers distributed a leaked letter to the media on Thursday, dated June 8 and sent by Laos' energy ministry to the Xayaburi Power Company, stating the consultation process was complete.

Shares in Ch Karnchang Pcl, which has a 57 percent stake in the Xayaburi Dam, had jumped 4 percent on Monday after state-run Electricity Generating Authority of Thailand, which has a 12.5 percent stake in the dam, said Laos might not delay construction of the project.

Ch Karnchang declined to comment on Thursday while authorities in Laos were not immediately available for comment.

Ecologists and river experts have criticized an environmental impact assessment conducted last year by the Lao government and warn that the livelihoods of 60 million people in the lower Mekong region are at risk if the dam goes ahead without proper risk assessment.

Scores of fish species face extinction, fish stocks will dwindle as migratory routes get blocked and swathes of rice-rich land could be deprived of fertile silt carried downstream by Southeast Asia's longest waterway, experts say.

Laos is committed to supplying 7,000 MW of power to Thailand, 5,000 MW to Vietnam and 1,500 MW to Cambodia by 2015. Its energy ministry says it has the potential to generate 28,000 MW from the Mekong.

Watt Botkosal, deputy secretary general of Cambodia's National Mekong Committee, reacted with dismay and said Laos had promised to conduct a cross-border study during a regional meeting in Jakarta last month.

"The impact study is incomplete, so why has this decision been made?" Watt Botkosal told Reuters. "We have not even received any such study."

According to the leaked letter, Laos said a one-month study had been conducted by an international consultancy group. No details were provided.

(Reporting by Martin Petty; Additional reporting by Prak Chan Thul in Phnom Penh; Editing by Alan Raybould)