Nam Theun 2’s First Year Marked by Delays in Implementation

International Rivers
Thursday, March 30, 2006

One year after World Bank approval for the Nam Theun 2 Hydropower Project in Laos, delays in implementation are causing concern amongst NGOs monitoring the project.While construction is proceeding rapidly, key elements vital to reducing the project’s negative impacts on people and the environment are behind schedule.

International Rivers is concerned about the following aspects of project implementation:

  • Many key documents have not yet been completed, including wildlife management plans for critically endangered species living on the Nakai Plateau, the Project Implementation Plan, and detailed resettlement plans for both the Plateau and Project Lands.

  • Logging operations in the reservoir will take place before a clear management plan has been developed. Villagers will lose access to non-timber forest products (an important source of income) and endangered species will be affected by logging before any plan to manage or compensate for these losses is in place. In addition, the logging operations will generate as much as $70 million for the Lao government (comparable to 3-4 years of net revenue from Nam Theun 2) and are not subject to the Nam Theun 2 (NT2) revenue management framework.

  • Aspects of the resettlement plan for Nakai Plateau villagers remain of high concern. Nam Theun 2 Power Company officials told International Rivers that villagers will be unable to grow rice on their new irrigated plots due to the poor quality of the soil. As rice is the staple crop for Nakai Plateau villagers, this will mean a dramatic change in culture and agricultural practices. In addition, one of the most critical questions for Nakai Plateau villagers - whether there will be sufficient grazing land for villagers' buffalo in the resettlement area - remains unanswered.

  • There is no resettlement site for two villages living closest to the dam site. According to a letter from the World Bank and Asian Development Bank, the planned site "was found to be unsuitable due to water pollution originating upstream." Alternative sites are being reconsidered, but in the meantime these villagers are likely to experience additional flooding this wet season as a result of the coffer dam.

  • Key monitoring arrangements are still not in place, including Independent Monitoring Agencies for the Lao government’s resettlement and environment units and the Watershed Management Protection Authority.

Aviva Imhof, Campaigns Director of International Rivers, says: "The numerous delays in Nam Theun 2 implementation in the first year since World Bank approval do not augur well for the project. Delays now mean that short cuts will need to be taken to meet construction and operations deadlines. It’s the affected communities and endangered wildlife that will pay the heaviest price for this."