Laos: Xayaburi Dam Halted. Really.

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Laos: Xayaburi Dam Halted. Really.

Laos reassures its neighbors that work on the Xayaburi dam is on hold. But there are some mixed signals.

Observers following the planned construction of the Xayaburi dam in Laos didn’t have to wait long for a decision. The government has again said it won’t proceed on the dam before gaining approval from the international community, and in particular the downstream countries.

The Laos Vice Minister for Energy and Mines, Viraphonh Viravong, reassured Laos’s neighbors at a recent conference in Phuket that it was taking seriously an agreement reached in December to halt construction until a full independent environmental impact study could be made.

However, Viraphonh appeared to be hedging his bets. He also confirmed the worst secret in Southeast Asia: that some construction work had gone ahead, including roads, by the Thai company C.H. Karnchang. But this work is supposedly not directly related to the main dam, with Viraphonh adding that this type of work was only for primary and exploration purposes. It’s the type of explanation that’s designed to limit cross-border criticism, a heresy in the Association of South East Asian Nations (ASEAN). But in reality it will raise the hackles down the corridors of power in Hanoi and Phnom Penh.

Last month, C.H. Karnchang raised eyebrows after informing the Thai Stock Exchange that it had finalized a contract with Xayaburi Power Company to build the 1,206-megawatt dam over the next eight years, and that construction was due to begin on March 15.

This went against the December agreement.

Cash-strapped Laos has signaled it intends to use its natural assets – the cavernous mountains that line the fast flowing upper reaches of the Mekong River – to build up to 11 dams and become “the battery of Asia” by supplying hydropower electricity to neighboring countries, initially Thailand.

The $3.5 billion Xayaburi dam, located 150 kilometers downstream from the old royal capital city of Luang Prabang, was to be the first. Then came a slew of negative reports and local complaints.

An independent report on food security that was prepared by the International Centre for Environmental Management for the Mekong River Commission found that 11 dams could cut fish resources by more than 40 percent.

Viraphonh also sounded like the Xayaburi would move ahead regardless of the findings stemming from studies currently underway, telling reporters: “We will address and take into account all reasonable concerns in order to make this Xayaburi dam a transparent dam and a role model for other dams in the mainstream of the Mekong River.”

Laotian politicians rarely find themselves at the center of controversy, but Viraphonh’s ability to cover himself on all sides of this issue shows just how adept the Lao government has become, with billions of short term construction dollars at stake and potentially much more to come later on.