Diplomacy be damned

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Work proceeds on the controversial Xayaburi dam as Thai contractor ignores agreement to suspend construction

People from Pak Neun village search for gold in rocks removed from Mekong River. Villagers have been told they will be resettled in late 2012 or early 2013. Photo: International Rivers.

A major Thai contractor has overstepped its bounds by going ahead with the construction of a controversial US$3.8-billion dam, defying an agreement to suspend the project pending further studies and approval by neighboring countries, an environmental group has said.

CH. Karnchang, one of Thailand's largest contractors, has also reneged on its commitment to confine work on the Xayaburi dam project to the preparatory stage, International Rivers, a Berkeley-based NGO, said in a press release Wednesday (June 27).

"By proceeding with resettlement and construction on the Xayaburi dam, CH. Karnchang has blatantly defied the diplomatic process underway to decide on the future of the Mekong River," Ame Trandem, Southeast Asia program director for International Rivers, said, citing findings of a recent investigation carried out by the group.

CH. Karnchang had already undertaken significant resettlement and construction activities at the Xayaburi dam site, International Rivers said after concluding a visit to the dam site last week.

"Recent activities include dredging to deepen and widen the riverbed at the dam site, the construction of a large concrete retaining wall, and an increase in the company's local labor force," the group said in its statement. "One village, Houay Souy, was already resettled from the dam's planned spillway to near Xayaboury town in January 2012," it said.

But Aswin Kongsiri, CH. Karnchang's chairman, said earlier this month that the company had yet to start construction on the dam. "We have thus far focused on project preparation, mainly financing and the environmental impact report," Kongsiri was quoted by the Bangkok Post as saying on June 2.

Environmentalists are not buying it.


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"So far, CH. Karnchang claims that they are only going forward with "˜preliminary construction' on the project, but the definition of "˜preliminary' keeps expanding," Kirk Herbertson, Mekong Campaigner for International Rivers, said. "Ripping up the riverbed and resettling entire villages cannot be considered a preliminary activity," he added.

It is not clear whether the Lao government has been officially informed of the International River's investigation findings.

Vietweek asked Daovong Phonekeo, general director of the Lao Department of Energy Policy and Planning, about the latest finding, but did not receive a response. Phonekeo, however, told Vietweek in April that only "exploratory" and "preparation" work, such as gathering rock samples for stress test, have commenced since March 15.

CH. Karnchang did not respond to an interview request as of press time.

The Mekong River Commission (MRC), an intergovernmental body established to coordinate dam projects on the river, said the latest update it had received from Laos was that the construction near the dam site was just in the preliminary stage.

Commenting on the press release and photos put out by International Rivers, the MRC said: "Our engineering-based observation is that the reported activities show that the preparation for construction is well-advanced.

"However, we are not certain if/why the dredging is taking place, nor why the concrete wall is being built," the MRC said it a statement emailed to Vietweek.

Laos, dubbed the "battery of Southeast Asia," has promoted the 1,285-megawatt, 810-meter (2,600ft) Xayaburi dam as a potential source of income and investment that will spur its small economy.

But experts warn that the Xayaburi project - one of 11 new dams planned on the lower 4,900km-long (3,000mile-long) Mekong River - could cause untold environmental damage and spark a food security crisis downstream in Thailand, Vietnam and Cambodia.

Last December, Vietnam, Cambodia, Laos and Thailand agreed to shelve Laos's plans to go ahead with the Xayaburi project and take more time to study its impacts.

But just one month later, the Thai Minister of Energy Arak Cholthanon confirmed that the Electricity Generating Authority of Thailand and the Xayaburi project developer had signed an agreement in October 2011 to buy 95 percent of the electricity from the dam.

In April, CH. Karnchang announced to the Thai Stock Exchange that they had signed a 52-billion baht ($1.7 billion) contract with Xayaburi Power, a Lao-Thai joint venture, to build the dam and that work on it had commenced in mid-March. Four Thai banks have already provided financial support for the Xayaburi dam.

Mekong basin countries are bound by treaty to hold inter-governmental consultations before building dams. The four nation members of the MRC will conclude a two-day meeting with their development partners on Friday in Vientiane with the debate on dam issues topping the agenda.

"No construction should be allowed that places future cooperation along the Mekong River in jeopardy," Herbertson, the International Rivers campaigner, said. "It's time for the Thai and Lao governments to hold firm to their commitments and require CH. Karnchang to respect the diplomatic process.

"CH. Karnchang's ongoing construction activities are creating conflict among the Mekong countries."

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