Key Civil Concerns Over the Bujagali Project
The following are our key concerns over the Bujagali Dam project in Uganda.
- THE BUJAGALI PROJECT UNDER THE NEW DEVELOPER, IPS GROUP OF KENYA IS MOVING FORWARD BASED ON THE OUTDATED AND INCOMPLETE ENVIRONMENTAL IMPACT ASSESSMENT (EIA) PRODUCED BY THE PREVIOUS DEVELOPER.
According to Uganda government and the World Bank, the Bujagali project is moving ahead. Government has already tendered the project and a sponsor has been selected, the Industrial Promotions Services (IPS) of Aga Khan Foundation. The IPS is known to have set up a consortium of contractors to build the project. Government and the project sponsor have already approached the World Bank and other development partners to fund the project as a public–private undertaking. And the World Bank has agreed (the World Bank Circular of 28th September 2005) to fund the project. There are also reports indicating that the European Investment Bank may be the principal lending agency for the project.
However, all these development have been going on without the project’s own EIA. It should have its own EIA done instead of depending with on the almost ten–year old EIA done by AES – Nile Power. New changes in the Project area such as the lowering of the Lake water level, wide deforestation on Lake Victoria’s Kalangala Islands to establish Palm Oil plantation, and deteriorating concrete of Owen Falls Dam (i.e. safety issues) were not factored into the AES’s EIA.
Condition: The Project’s EIA must comply with both the Uganda laws and World Bank policies and safeguards and ensure that the dynamic environmental conditions are incorporated.
- THE BUJAGALI PROJECT IS MOVING AHEAD BEFORE THE POWER PURCHASE AGREEMENT HAS BEEN APPROVED BY UGANDA PARLIAMENT, AND THUS FAR, WITHOUT PUBLIC RELEASE OF THE DOCUMENT TO THE PUBLIC.
The cost of Bujagali has been a contentious issue, raising questions about citizens’ ability to afford its tariffs, the high cost of the first design of the project, issues of indebtedness, and questions about studies showing Bujagali as the "least–cost" project available to Uganda’s energy sector. Most recently, there have been media reports that the Government and the developer, IPS, have signed the project PPA, and yet Minister Sydda Bbumba said in the New Vision on 16 December that the cost of the project would be confirmed until after the bidding process. There have been conflicting reports of the project’s cost till now, the most recent being US$500 million.
Thus, it is critical that the project’s contract, the Power Purchase Agreement (PPA), be publicly released and thoroughly debated by Parliament. Uganda’s High Court ruled in 2002 that a Power Purchase Agreement is a public document, and so there is a precedent in having the Bujagali PPA made public. Uganda laws require that, before government seeks a loan for a project like Bujagali, Parliament must approve that loan. It is the PPA which determines the total cost of the project, including the final tariffs the consumers will pay. Therefore, it is illegal for government and the sponsor to proceed with seeking a loan for the project without the PPA being debated and approved by Parliament, which is the representative of the people of Uganda. If not approved by Parliament Bujagali Dam remains an illegitimate project.
Condition: The Power Purchase Agreement must be presented to Parliament, debated and approved before Government and the developer proceed to seek financing for the project from public institutions. The PPA should also be released to the public at this time.
- THE PROJECT LACKS A COMPREHENSIVE OPTIONS ASSESSMENT TO ESTABLISH WHETHER BUJAGALI IS THE LEAST–COST AND BEST ELECTRICITY OPTION FOR UGANDA
Government, the project developer and the World Bank are proceeding with the project as the least–cost option, yet this has been effectively disputed in the past (see, for example, the independent study by the Prayas Energy Group, titled "The Bujagali Power Purchase Agreement: A Study of Techno–Economic Aspects of the Power Purchase Agreement of the Bujagali Hydroelectric Project in Uganda"). Also, other factors come into play in deciding what the best option is––for example, the risk that drought will cripple our economy, which is almost entirely dependent on hydropower for electricity. As of now, there is no evidence to show that the various alternatives have been comprehensively and fairly assessed to determine the costs and benefits of each against the Bujagali project.
Condition: A comprehensive, participatory options assessment must be done to show whether the Bujagali project is the least–cost and best option for meeting Uganda’s needs.
- THE PROJECT LACKS A COMPREHENSIVE AND TRANSPARENT ECONOMIC, TECHNICAL AND FINANCIAL ASSESSMENT.
The government and the project sponsor are proceeding with seeking funding without an updated assessment of the project’s economic, technical and financial implications. Transparency and accountability demand that important assessment of a project like Bujagali involves all stakeholders. A transparent process will also help ensure that past problems are not repeated––such as the improper valuation of Karuma Dam in the "least–cost" studies, which put Karuma at an artificially high price compared to Bujagali; the exclusion of alternatives, such as geothermal energy generation, in the evaluation of possible options; the poorly designed resettlement plan, the dismissive treatment of the river–based tourism industry, among other issues. Government and the project developer should also make comprehensive assessments on issues related to affordability of the energy proposed to be generated from Bujagali.
Condition: A comprehensive, transparent and participatory economic, technical and financial assessment must be done and key stakeholders, including the National Association of Professional Environmentalists and other NGOs which are concerned about the project, dam–affected communities, the tourism industry, and other interested stakeholders..
- DAM SAFETY ISSUES HAVE NOT BEEN ADDRESSED.
There is evidence that Owen Falls dam is cracked and should be considered for either safety upgrading or for decommissioning. The Owen Falls dam is a potential threat to downstream river communities and the Bujagali Dam in its current condition. According to the New Vision, 18th February, 2005, NALUBALE (Owen Falls Dam) in Jinja faces closure following extensive cracks developing at the power generation plant. A Uganda Electricity Generation Company civil engineer, Moses Kayizzi, is reported to have said the cracks are caused by a reaction between water and cement, and had weakened the power generation plant. He also observes that the phenomenon cannot be reversed as water continues to react with cement. The resultant pressure is so big that it forces the machines to move upwards creating cracks. The Engineer is also quoted saying, "If this continues, we might have to shut down." To date, this fact has not been factored in the Bujagali project process.
Condition: A study to establish the safety of both Owen Falls Dam and the proposed Bujagali Dam must be carried out in order to conform before proceeding with Bujagali
- THE HYDROLOGICAL RISKS OF THE PROJECT.
There is abundant evidence to show that Lake Victoria water level has dropped dramatically, in part due to hydropower operations. A recent US Government report states: "However, recent operating practices have exceeded past sustainable operating water levels because the Nalubaale power station was recently expanded by the Owens Falls Extension (later renamed Kiira) power station located about one–kilometer from the Nalubaale power station. The increased hydropower capacity at Nalubaale and Kiira power stations allowed more water to be released for power generation and recently lowered lake levels to unsustainable levels below 11 meters." (See: www.fas.usda.gov). The worrying news is that the lake may not recover for a very long time to come. There is no evidence to indicate that these issues have been taken care of in the Bujagali development process.
Condition: We call for serious and extensive studies on the hydrology of Lake Victoria and the Nile, and a plan for sustainable operation of the existing dams and Bujagali, before any further implementation of Bujagali project.
- THE PROJECT IGNORES THE OPPORTUNITY COST OF TOURISM AT BUJAGALI FALLS.
There is adequate evidence to show that the potential for tourism development at Bujagali is high and could be of great benefit to the people of Uganda. Unfortunately, little or no effort has been taken to ensure that adequate assessment is done on the tourism potential of the falls.
Condition: A comprehensive cost–benefit analysis of tourism of Bujagali falls should be carried out before the project proceeds.
- THE BUJAGALI FALLS ARE OF GREAT CULTURAL AND SPIRITUAL IMPORTANCE TO THE INDIGENOUS BASOGA COMMUNITIES.
The project is not considering the aspects of cultural and spiritual values of the Bujagali falls to the Basoga communities and to other Ugandans.
Condition: The cultural and spiritual values must be incorporated in the Bujagali assessment. The Bujagali project as currently planned ignores the findings and recommendations of the World Bank Inspection Panel.
- THE FINDINGS AND RECOMMENDATIONS OF THE INSPECTION PANEL HAVE NOT BEEN ADDRESSED.
The findings of the Inspection Panel indicated in 2002 that Bujagali electricity would be too expensive and, therefore, not affordable to most Ugandans. The Panel also found the economic analysis of the project to be seriously deficient. There is no indication that electricity under the new project developer would be any cheaper and therefore affordable. In fact in the recently illegitimately signed PPA, there was total silence on the actual final tariff. The report by the Inspection Panel also found that important measures to analyze or mitigate the social and environmental impacts of the Bujagali dam were either missing or seriously deficient. These measures include an assessment of the cumulative environmental impacts of dams in Uganda, a resettlement and a community development action plan for the affected people.
Condition: The findings of the Inspection Panel must be addressed before the project proceeds.
- THERE IS NO EIA FOR TRANSMISSION LINES TO DISTRIBUTE ELECTRICITY FROM THE SOURCE TO THE CENTRAL GRID.
The PPA was illegitimately signed without taking into account the implications of implementing Bujagali without EIA for the transmission lines to distribute electricity from the source to the central gird. This non–sequential approach is dangerous because it is meant to rubberstamp the political decision already taken to build Bujagali.
Conclusion
The EIA for the transmission lines should be done before the sponsor and developer proceed to seek public funding for the project.
