Laos Finally Called Out over Xayaburi Dam

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Laos Finally Called Out over Xayaburi Dam

Are regional tensions over the Xayaburi Dam coming to a head?

Vietnam and Cambodia have finally found their voice. After months of obfuscating their position on the Lao government’s insistence on constructing the Xayaburi Dam and blocking the main stream of the Mekong River, leaders from both countries have pushed diplomatic niceties to the side and finally tackled Vientiane on the issue.

The refreshing shift in political tact came on the final day of a meeting among member countries in the Mekong River Commission (MRC), in which leaders from Vientiane could have been forgiven for thinking they had perhaps outfoxed their counterparts in Hanoi and Phnom Penh.

Laos reached an agreement with Vietnam, Cambodia and Thailand more than a year ago to suspend construction of the U.S.$3.5 billion dam while independent studies were to be made on fish migration patterns and the possible threat posed by the dam to food security.

About 60 million people depend on the Mekong River for their livelihoods through a hand to mouth existence.

However, Vientiane ignored what amounted to a moratorium, Thai construction companies went to work immediately at the site and plans for further dams were released. Meanwhile, the Lao government insisted its citizens will prosper through the sale of electricity to neighboring countries produced by hydropower. 

At last week’s MRC meeting, Cambodia demanded that all construction be immediately halted and argued that Laos had misinterpreted previous agreements. Meanwhile, Vietnam insisted that no dams be constructed until an agreed upon independent study is completed.

Lao Vice Minister of ­Energy and Mines Viraphonh Viravong attempted to defend his country’s stance, which seems to have the support of Thai construction companies, Chinese lenders and Lao politicians, but few others further afield.

Thai general contracting and infrastructure development group Ch Karnchang — through its 50 percent-owned subsidiary Xayaburi Power Co — has a 29-year concession to operate the dam's 1,285 megawatt power plant, as well as assurances from Thailand that it will purchase about 95 percent of the electricity generated.

Cambodia and Vietnam are demanding a regional consensus before construction can start.

However, both countries have said little over recent months despite a steady flow of independent reports from Laos and comments made by Lao ministers indicating that the Lao government was proceeding with construction of the dam. In fact, building at the site began in November 2011.

Laos has faced unprecedented international scrutiny over the past year, initially with the Xayaburi Dam, then with its massive borrowing program primarily with China to fund an ambitious infrastructure program. Most recently, the country has come under scrutiny following last month’s disappearance of human rights activist Sombath Samphone.