Asia Pacific | FOCUS

Locals reap little benefit in Laos's controversial hydroelectricity ambitions

AFP-JIJI, Reuters

Mountainous and landlocked Laos, known as the “Battery of Asia,” is building dozens of dams at breakneck speed so it can sell energy to power-hungry neighbors as a fast track out of poverty.

But the communist country’s ambitious power plans are highly controversial.

Most energy is exported to the neighboring countries Vietnam, Cambodia and China, with the lion’s share going to Thailand, whose Bangkok mega-malls alone suck up huge amounts of power.

That leaves local communities with little of the revenue from projects that often require compulsory resettlement of hundreds of villages and reshape the landscape and river systems.

And the dams can be deadly. On Monday, the collapse of a hydropower dam sent a torrent of water charging across paddy fields and through villages.

The Xe-Pian Xe-Namnoy Power Co., a hydropower project that involves Laotian, Thai and South Korean firms, on Monday told local officials in a letter written in English that one of its subsidiary dams was “unsafety” and had started to overflow, and requested that they inform downstream villages. It was not clear what time the letter was delivered.

Village chiefs in Khokong were knocking on doors to warn residents at 4 p.m. An hour later, water started to flow through the village. At 8 p.m., according to state media, Saddle Dam D — part of a network of two main dams and five subsidiary dams — failed, and the deluge began.

The scale of the disaster in the southern province of Attapeu was still unclear Friday, in part because of the inaccessibility of the area but also because reports from the isolated and poverty-stricken country’s state media have been scant, sketchy and sometimes inconsistent.

On Wednesday, the Vientiane Times reported some 3,000 people were still waiting to be rescued from swirling floodwaters, many of them on trees and the rooftops of submerged houses.

Official media reported Thursday that 27 people were confirmed dead, 131 were missing, and all those who were stranded had been plucked to safety.

In Khokong, the scale of the damage was palpable.

Every inch of the sleepy farming community was covered in mud. A dead water buffalo calf lay motionless, its head buried in the thick clay. Dogs still trapped in wooden stilt houses howled for their owners.

The unstoppable force of the water that had been released from the dam devastated the meager road between Khokong and its nearest big town, Attapeu, complicating rescue efforts to bring food and water across dangerous, muddied, roads and the search for trapped survivors.

The army has set up checkpoints to filter the deluge of well-wishing volunteers who have driven overland from other parts of Laos and from Thailand into the secretive country.

Some of those volunteers have donated a ragtag armada of wooden fishing boats, jet-skis and inflatable banana boats to navigate the sea of mud so rescuers can ferry drinking water to villages like Khokong.

The dam’s collapse has shed light on the perils of the country’s big bet on hydropower.

Here are a few key questions:

Why so many dams?

With a vast river system, mineral-rich mines and a population of just 6 million, Laos is richer in natural resources than manpower.

As revenues from timber exports and gold and copper mines have tailed off, the country — and foreign investors — have plowed billions of dollars into hydropower development, billed as a clean source of energy to electrify Laos and supply its power-hungry neighbors.

There are currently 46 operating hydropower plants with a capacity of 6,400 megawatts, with another 54 under construction and set to go online by 2020, according to the Laos News Agency.

If all goes to plan, Laos wants to generate a whopping 28,000 megawatts of power in just two years — almost enough to power all of Thailand for a year.

It has targeted graduating from a lower-middle income country by 2020, according to its World Bank classification, and raise its annual per capita GDP from $2,457 today.

Where does the power go?

About 85 percent of all energy generated in Laos is exported — mostly to Thailand — where two-thirds of it is sucked up in and around the sweaty capital Bangkok, according to the International Energy Agency.

Almost 90 percent of Laos has access to electricity, but supply can be patchy, especially in rural areas.

“Even if it could be enough . . . to power all the homes, it doesn’t reach all the homes, so there is a gap there at the very least in terms of access,” said Vanessa Lamb, geography lecturer at the University of Melbourne.

Who is making the money?

The government is earning revenues by selling power to its neighbors. Although figures are not public, the World Bank says investments in the sector are not on par with how much goes toward the national budget.

The real rewards may still be decades away.

Many contracts stipulate that hydro plants — often built and operated by foreign firms, including those from China or Thailand — will be handed over to the Laos government in 20 or 30 years, according to Keith Barney, a lecturer at the Australian National University’s College of Asia and the Pacific.

“Although there’s been a lot of dam construction, the actual royalties and budget revenues — which are opaque — have not been that lucrative so far,” he said.

“They’re coming down the line as these projects move toward their mature phases.”

Do local communities benefit?

So far, revenues have yet to trickle down to village level.

Unlike in some other countries, residents are not paid a percentage of the money earned from exporting power and may suffer from hydropower projects.

Villagers are routinely resettled to make way for plants and dams, and farmers have complained that diverting river water destroys farmland, while damming rivers interrupts fish flows.

An April report from the Mekong River Commission predicted that up to 40 percent of fish species in the Mekong River basin could be disrupted by dam-building in the region, a warning echoed by others.

“Poor people in the project areas are worse off because of these dams, not better off,” said Ian Baird, assistant professor of geography at the University of Wisconsin-Madison.

“People aren’t being properly compensated and then when the revenue comes in it’s not getting back to those people,” he said.