Letter to Acres International Limited

The following is a letter International Rivers sent to IFC consultants who are studying the hydropower potential of the Upper Nile. We commented specifically on one project in Uganda, the Bujagali Falls dam, a private project proposed by the US company AES. The IFC is a potential funder of the project.

Clifford Brown
Acres International Limited
P.O. Box 1001
Niagara Falls, Ontario
Canada L2E 6WI
cbrown@niagarafalls.acres.com

By Email and Post

cc: Martyn Riddle
International Finance Corporation

Mary Clare Mervenne
Overseas Private Investment Corporation

Dear Mr. Brown,

I have recently learned that Acres International Limited, in conjunction with Kagga and Partners Limited, is undertaking a review of the various options for meeting the growing electricity demand in Uganda. According to notices in the New Vision, Uganda's main newspaper, this review will comply with the International Finance Corporation's Safeguard Policies and identify any significant environmental and social impacts associated with potential hydropower projects on the Nile.

I am currently working for International Rivers on issues surrounding the dams proposed for the Nile. My experience includes having lived in Uganda from January 1997 through July 1998. I spent a good portion of that time working in the area where the proposed dam would be built. The comments herein focus on the impacts of the Bujagali Falls Dam, and will be organised in the following manner:

I. Social impacts of the Bujagali Falls Dam
II. Natural and social environmental impacts of the project
III. Cultural impacts of the project
IV. Tourism impacts of the project
V. Energy demand issues in Uganda

The Bujagali Falls Dam would have a profound and permanent negative effect on local communities. The "Source of the Nile" Corridor, stretching 25 kilometres south from the Owens Falls Dam to Kalagala Falls, is a heavily populated area. According to the Preliminary Environmental Assessment of the Bujagali Falls Hydropower Project by Rust, Kennedy, and Donkin (1996), the Upper Nile Corridor is "an area of intense agricultural land use verging on land shortage." The report continues: "The east bank is located in the Jinja hinterland where development pressures on land use are already high."
The Bujagali Falls Hydropower Project will directly affect 5,700 people, according to the AES/ Nile Power EIA Draft Final Report. Local residents have expressed dissatisfaction with the prospect of being resettled for the project, and the availability of replacement land has yet to be fully analysed and confirmed by project authorities or the government. There is very little land available in the area. According to the Donkin report, "replacement land may simply not be available locally."

As a result of this localised land shortage, communities will be divided as a result of the project, with severe effects on these communities, especially the Busoga on the East Bank. The Prelimary EIA clearly explains the potential impact of dividing the Busoga:

"Certainly Namizi Parish on the east bank appears a close–knit community with an active village–level administration and splitting the community would represent a significant socio–economic impact. The community has been here for several generations and cultural values and associations will need to be studied: graves and burial grounds are a case in point. There will be acute social effects from land take in the area."

The resettlement debate has also brought to light several disconcerting issues concerning transparency in the consultation process. According to some potentially affected residents, promises were made by dam officials in return for their support of the project. The Local Commissioner of Jinja (LC5), Mr. Muwumba, brought this issue to the attention of the Minister of Natural Resources, Honourable Sendawula. The two met with the Executive Cabinet of the LC 5 in August of 1997 to discuss the siting of the proposed Hydro Electric Power plant at 'Budhagali Falls'.

Below is a summary of Mr. Muwumba's statements, as documented in the minutes of a meeting of the Busoga Lukiiko, whose members attended the original meeting with Minister Sendawula. The Busoga adopted these minutes at Bugembe in Jinja, on August 8, 1997 (we can send you a copy of this document if you wish).

"The Chairman LC5, Mr. Muwumba, expressed great disappointment that Government was taking the decisions to destroy Budhagali Falls by building a Hydro Electric power plant without any discussions or consultations with the Jinja District Local Government.

"The second disappointment was that the Nile Independent Power Directors were going to the site talking to the people about the Power Plant, without directly going through the authority of the area, i.e., the Jinja District Administration. In order to persuade the people to support the dam, false promises were made to give them: Free Electricity, free education, free Hospitals etc. The LCV Chairman pointed out that such false promises, which cannot easily be fulfilled, may in the future cause unrest and the burden of keeping peace would fall on the shoulders of the Government including the local authority.

"The third disappointment was that the Nile Independent Power was claiming that: 'over 85% of the local residents are completely in favour of the project and that the vast majority of Central, Local, and District Political leaders are also in favour of this project.' It is obvious that the people affected by the destruction of Budhagali Falls are more than the few Local Residents in the area. This is a local and National issue. The Chairman stressed that he was aware that Local District Political Leaders are not in favour of destroying Budhagali Fall, BUT they are in favour of choosing another site down the river on which to build the proposed Hydro Electric Power Plant."

The above allegations that bribes of free electricity and free housing were promised to residents who would support the project are indeed serious. They call into question the claim by AES Nile Power, stated in the Bujagali Falls Hydropower EIA, Draft Final Report, that based on stakeholder's meetings "95% of respondents are in favour of the project." A detailed independent inquiry needs to be made to discern what exactly residents expect to receive in the wake of the project. How was this figure of 95% reached? What exactly does "in favour" mean? Inflated expectations could directly relate to residents' "approval" of the project.

Furthermore, prior to my joining International Rivers, Mr. Simon Mulongo, Regional District Commissioner of Jinja, arrested me at his office in Jinja on July 8, 1998, for openly speaking to local people about the potential impacts of the project. Mr. Mulongo's ostensible reasons for putting me in jail were for "disrupting law and order, inciting hatred among peace–loving Ugandans, and sowing anti–Governmental sentiments among the local people, the local authorities, and the cultural leaders." The New Vision called the arrest "authoritarian and undemocratic" in its lead editorial on July 11, 1998. In fact, I had been approached by cultural leaders to relay their concerns about the dam to project authorities and the press. I was only let out of jail when I agreed to leave the country of Uganda the following day. Such undemocratic actions indicate that the project has not been presented to Ugandans through an open and transparent planning process.

According to the official AES/NIP Environmental Impact Assessment, the proposed Bujagali Falls Hydropower Project will permanently submerge 191 hectares of land, and "temporarily" destroy 100 hectares. This includes highly productive agricultural land on the river's banks as well as islands of extreme biodiversity. Trees on these mid–stream islands, which will be lost to the reservoir, will reduce roosting sites for the 77 different bird species found in the area, including 17 species of aquatic birds. Displaced peoples will increase the stress on land near the reservoir, resulting in further watershed degradation and deforestation and a loss in soil productivity.

As has occured elsewhere in Uganda, excessive weed and algae growth will occur in the Bujagali reservoir. The most prevalent of these weeds, water hyacinth, will clog dam outflow, as has occured at Owens Falls Dam, and increase water loss through transpiration. The reservoir behind Owens Falls Dam currently contains 1.25 million metric tonnes of water hyacinth, and the weed doubles in size every two weeks. As a result of this vegetation sinking and decaying on the floor of the reservoir, water released downstream from the Bujagali dam turbines will be oxygen–deficient, and may contain hydrogen sulfide and be of high acidity.

The creation of a reservoir will also increase the prevalence of tropical diseases in the immediate area. Both malaria and schistosomiasis flourish in stagnant water environments, and more cases can be expected if the swift–flowing water of the Nile is dammed. Malaria is the overall leading cause of death in the country. Increases in malaria deaths are not mitigable and are unconscionable.
The creation of a reservoir could also permanently harm fisheries. The area around Bujagali Falls supports a substantial number of subsistence and commercial fisherman, who depend on the resource for both food and income. The most commonly caught species are Nile perch and tilapia. On other parts of the Nile, the Aswan Dam altered the biological cycle of the Nile perch which had the effect of changing the taste and quality of the fish, and thus reduced the commercial value of the catch. In addition, according to the 1996 NEMA EIA, "local fishermen argued that the turbulence due to the falls helped them catch more fish ...which will not be possible under lake conditions. They therefore feared loss of income." These concerns do not appear in official AES/EIA documentation.

There has been much discussion concerning Bujagali Falls as a traditional cultural site. A 1996 study, "Environmental Assessment, Project Analysis, and Economic Valuation: The Case of the Proposed Nile Independent Power Development Program (Budhagali Hydro Power Project)," written by Eugene Muramira, Environmental and Natural Resource Economist for the National Environmental Management Authority, states the following: "The Budhagali Falls are a cultural/religious site where a high priest 'Budhagali' is reported to occasionally sit on water to intercede with super natural powers." The report continues that "This religious value ...is likely to provoke a protest bid." AES/Nile Power claim in their EIA that the Spirit of Bujagali can be moved elsewhere.
The Spirit of Bujagali has a storied association with Bujagali Falls that has developed over hundreds of years. Such a connection can not be simply moved elsewhere. To claim that such a cultural site is transferable is an insult to the people involved and makes a mockery of the entire "direct consultation" process.

Such remarks display an amazing insensitivity to the local people, and indicate that cultural concerns will be inadequately and inappropriately dealt with on this project, causing even more anguish for affected people.

The Hereditary Rulers of the Busoga have also outlined specifically their relationship with Budhagali Falls. In the Conclusion of the Minutes of the 1997 Bugembe meeting, the Hereditary Rulers "pointed out to the Honourable Minister that if the Government is bent on destroying Budhagali Falls this would be tantamount to destroying Busoga since this is one of the few remaining SIGNIFICANT CULTURAL site(s) of Busoga." This statement has thus far not appeared in Nile Power/AES documents describing the project. We recommend that this information be included, to present a more complete picture.
The cultural traditions of the Falls are irreplaceable, and no realistic economic value can be attached to them. Their enormous intrinsic value to Ugandans must be taken seriously for a review of this project to be considered truly comprehensive. A cultural resource of this magnitude, which cannot be replaced and whose loss cannot be mitigated, should not be sacrificed to infrastructure development unless there is widespread support for the trade–off by Ugandan society. Thus far, such support seems to be lacking.

In discussing other impacts of the Bujagali Falls Dam, the tourism and recreational value of Bujagali Falls and the "Source of the Nile" should not be underestimated. According to the NEMA EIA, "The series of falls including Budhagali falls, Kyabira falls and Idondo falls which are likely to be submerged under the reservoir are spectacular tourist attractions. The series of falls are extremely scenic and the willingness to preserve them though not fully expressed in the market is enormous." The official documents for the Bujagali Dam have not accurately or adequately reviewed the present and potential tourism value of the "Source of the Nile" Corridor.

First, the Bujagali Falls are a very popular destination for Ugandan tourists. Accessible to the two largest cities in the country, the Falls are an affordable destination for Ugandans and are often crowded on weekends and holidays. With the Rippon Falls and the true "Source of the Nile" having been submerged by the Owens Falls Dam in 1954, Bujagali Falls is now regarded by residents nationwide as a national treasure.
The AES/NIP EIA, however, finds the "scenic quality" of Bujagali "attractive but not exceptional." This contradicts common sense, as well as the 1996 Donkin EIA which states that "The falls are an attraction for Ugandans themselves and are important in that context. Owens Falls has already been eliminated and now other water features of amenity value between Jinja and Lake Kyoga would also be eliminated. This is perceived as degradation in an area with a paucity of natural attractions."

Secondly, Bujagali Falls has recently emerged as the top international tourist destination in Uganda. Tourism is becoming a critical source of foreign exchange in Uganda. It should be noted that the figures listed in the AES Bujagali Falls Hydropower Project EIA concerning tourism in Uganda are grossly inaccurate. According to the AES EIA, "Overall Uganda's tourism industry is very small with a maximum of about 15,000 tourists per annum." And yet, according to the "State of the Environment Report for the Republic of Uganda: 1996" published by the National Environmental Management Authority, Uganda welcomed 193,000 tourists in 1996. Earnings from tourism were over $90 million in 1996 and are expected to increase dramatically in the near future.

Bujagali Falls could become the cornerstone of Uganda's growing tourism industry, and an accurate discussion of the impacts of a dam at Bujagali must take into account the true potential of tourism activities at the site. The international popularity of the Falls today is mainly due to the success of whitewater rafting, which began in Uganda in May 1996. By December 1997, rafting had surpassed Uganda's other major tourism draw, the mountain gorillas, as the premier attraction in the country, with over 500 people rafting the White Nile that month alone. If the Bujagali Falls Dam were built, whitewater rafting would no longer exist in Uganda as it does today.

The rafting companies currently operating on the Nile, Adrift and Nile River Explorers, market Uganda internationally as a destination. Their investment in international publicity for Uganda will continue to draw foreign visitors to the country. Once in the country, these tourists bring in much needed foreign exchange to shops, restaurants, and hotels. It is estimated that whitewater rafters spend nearly $4 million a year in Uganda on these ancillary activities not related to rafting.

Currently, over 6,000 people raft the Nile each year. Adrift and Nile River Explorers are both in the process of training locals as guides and safety kayakers, and they already directly employ over 50 Ugandans. Rafting is still in its infancy in Uganda, but the potential for growth is vast. In Southern Africa, whitewater rafting on the Zambezi River currently attracts 46,000 tourists each year. The industry there employs over 1,000 people on a full time basis. Considering theNile's uniqueness, such numbers are easily attainable in Uganda's future.

If a dam were constructed at Bujagali Falls there would be a drastic negative, long term effect on the tourist industry in Uganda. However, the only mitigation programs included in AES/Nile Power EIA are as follows: "A variety of tourism measures are proposed including creation of a community recreation area, a lake enhancement programme, a visitor centre, and an Upper Nile tourism development plan."

If the Bujagali Dam is built, there will be no "Upper Nile" left for tourism. To claim that lake tourism will make up for the loss of the country's leading tourist activity is not only ridiculous, it is bad economics. Lakes and reservoirs in Uganda are not suitable for swimming or recreation because of vector snails, which transmit schistosomiasis. The Owens Falls Dam created the largest reservoir in the world, Lake Victoria, yet since 1954 it has never been a major tourist attraction. The reservoir created by the Bujagali Dam would be less than one mile from Lake Victoria. The creation of more stagnant flat water, behind the third large concrete wall within a ten mile stretch, is not going to draw people to view it. Bujagali Falls will.

The "Source of the Nile" Corridor is indeed one of the most spectacular river stretches found anywhere in the world. The Nile at Bujagali braids into seven separate channels of thunderous falls, each one sandwiched between thick jungled islands. The parallel succession of seven long whitewater rapids stretching from bank to bank is truly a unique phenomenon–– it does not happen anywhere else on the Nile. The EIA of a hydropower project simply cannot place a monetary figure on the true value of Bujagali Falls as it exists naturally, not today and certainly not in twenty years' time, when there are likely to be even fewer free–flowing rivers on the African continent.

There are other ways of increasing the amount of available power without causing as much negative social and environmental effects as a major hydropower project. The most obvious is in demand–management. According to the NEMA State of the Environment Report (1996), over a quarter of the power generated in Uganda is lost to poor transmission. In 1995 transmission losses were 32.4% of power generated. Before millions of dollars are spent to generate more power in Uganda, ample investment needs to be made to reduce losses in the transmission of power. The current instability of the Uganda Electricity Board, UEB, only reinforces the need for reform of this institution and the entire power distribution system before further power projects are developed.

Uganda also has favourable solar conditions, according to a 1996 World Bank/UNDP study. Uganda's solar potential ranges from 4 to 6 kWh per square meter per day on average, according to the US Department of Energy. This technology is already successful in neighboring Kenya, where over 40,000 families use PV systems. More households in Kenya get their electricity from the sun than from the national grid. Both Solar PhotoVoltaic (PV) and solar thermal technologies could provide power to rural Ugandans now without power (90% of the population) much more efficiently than a massive hydropower project that supplies power only to the grid, which reaches so few Ugandans.

Thank you for your consideration of these remarks. I look forward to your reply.

Sincerely,

Stephen Linaweaver
Africa Program
International Rivers
1847 Berkeley Way
Berkeley, California 94703
E–Mail: nilehigh@hotmail.com

Lori Pottinger
Director, Southern Africa Program
and Editor, World Rivers Review
International Rivers
1847 Berkeley Way
Berkeley, California 94703, USA
E–Mail: lori@internationalrivers.org'
Tel. (510) 848 1155
Fax (510) 848 1008