July 2018 marks the collapse of Lao dam, Xe-Pian Xe-Namnoy, Sanamxay district and it was reported the flash flooding swept homes away in no time, killing around 31 people and displacing more than 6000 in Laos and Cambodia.
The innocent villagers were the victims of greediness as the incident revealed the irresponsible deals between the authoritative Lao People’s Revolutionary Party with related companies for the sake of financial gains.
Landlocked Laos has been aiming to push its investment in hydropower since the 1990s, in the hope that Laos can act as the “battery” to Southeast Asia by contributing in the electricity sector. It has been a challenging journey for Lao itself since the government refused to calculate the risks, especially for the rural people.
Seeing the incident from a sustainable development perspective, it reflects imbalanced value in three aspects of sustainable development, namely economic, social, and environmental.
The project was estimated to cost $1.02 billion and built as the pioneer of major power projects in Laos. The investors of the project are SK Engineering & Construction, Korea Western Power, Ratchaburi Electricity Generating Holding and Lao Holding State Enterprise. The agreement is under the Power Purchase Agreement (PPA) scheme between the Xe-Pian Xe-Namnoy Power Company (PNPC) as the owner and the Electricity Generating Authority of Thailand. It is because 90% of the electricity produced would be exported to Thailand and the other 10% would be sold under other PPA between PNPC and Électricité du Laos.
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From an economic perspective, this project is very profitable for the country, because Laos does not merely develop its power projects to fulfil its electrification ratio, but also seeks to be the major of power exporter in the region. Thus, Lao perceives the neighbouring countries in Southeast Asia as their potential markets. As of now, Laos sells its electricity to Vietnam, Cambodia, Thailand, and Myanmar.
With Thailand alone, Laos has agreed to sell the total of 9000MW of electricity to Thailand and currently, at least 4600MW has been supplied to Thailand, not to mention Laos would add another supply of 7000 MW and 9000MW by 2020 and 2025 respectively. Laos has been eyeing Singapore as the potential market as well.
Since the incident of hydropower projects is familiar in Southeast Asian countries, the question that may appear especially during the Lao dam collapse is whether social benefits can be reaped from the project. Even without the collapse, the development of Xe-Pian Xe-Namnoy project has forced the local communities to sacrifice their livelihoods in a way that the construction phase of the dam itself has caused local communities losing their access to adequate food, water, and land.
The dam is situated in one of Mekong’s creek, Sekong, where 20 ethnic groups inhabit by the waters in which millions of them rely their lives on wild-capture fisheries, irrigation, and transport. To make things worse, due to the development of the dam, the water quality in the river got deteriorated and negatively affected the local fisheries.
Although water is a non-fossil fuel and is a renewable resource, only under certain circumstances, the hydropower projects can be seen as environmentally friendly, and its repayment also depends on the site. Even in 2007, developed countries like Japan, Germany, the US, and France have utilized around three-quarters of the potential resource, making it challenging for developing countries who see their waters as the potential to boost economic growth. Some factors should also be taken into consideration, such as the migratory fish habitat.
The Xe-Pian Xe-Nam Noy project has promised to create fish passageways and reservoir fishing. However, since the construction stage alone has caused a dramatic change in livelihoods of the local community, their promise seems to be fruitless now.
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Sustainable development believes that for human development goals to succeed, one must fulfil the needs of the present without jeopardising the ability of natural systems to meet the needs of future generations. Therefore, in realising the concept, the environmental, social, and economic aspects should be achieved.
The development of Lao dam is driven by one particular aspect, namely economic, without taking into account other elements and future impacts. It is now “people and environment versus profit”.
As the lesson has been learned and progress is about to make, the government of Lao should take careful steps in developing power projects especially regarding public consultation, environmental impact assessment (EIA), as well as the establishment of a firm and fair power generation-related regulations.