Xayaburi dam’s end lies in negotiations

Xayaburi dam’s end lies in negotiations

Why should Thailand be the one to act on the controversial Xayaburi hydropower dam on the Mekong River?

Although the project is located in Laos, responsibility for this disaster-in-progress rests squarely with Thailand — and only Thailand can halt construction, by suspending the power purchase agreement (PPA) for the Xayaburi dam by our energy giant the Electricity Generating Authority of Thailand (Egat).

All other avenues are either broken or blocked. The Mekong River Commission’s (MRC) dreams of mutually beneficial and sustainable development of the lower Mekong River basin are shattered. China’s hydro-hegemony and regional superpower ambitions have fragmented Asean's tentative solidarity and paralysed diplomatic channels.

As for the likelihood of Thailand saying no to the dam, under normal, so-called democratic political circumstances I would say the chances would be zero. The whole Xayaburi project reeks of corruption and political influence, in both Laos and Thailand.

Who, for example, ordered the participation of majority government-owned PTT Plc and EGCO Plc (25% and 12% of Xayaburi shareholders respectively), without whom the project’s promoter and main contractor, Ch Karnchang Plc, would never have been able to launch the massive $3.5 billion (114 billion baht) investment?

Who, for example, ordered the Thai Ex-Im Bank to extend a guarantee for the dam, without which our four largest commercial banks would never have financed the project to the tune of over 80 billion baht?

And who engineered the signing of the PPA by Egat which was approved by the National Energy Policy Council (NEPC), the Ministry of Energy, the Ministry of Natural Resources and Environment and the Council of Ministers? (Meanwhile, the MRC’s mandatory consultation process wasn't completed.)

But today we do not live in normal times, unless this is the new normal. Today we live under a military-appointed, reform-minded government supposedly committed to eradicating corruption and particularly sensitive to the needs of the 20 million Thai citizens along the Mekong whose livelihoods will be damaged if the Xayaburi dam is not stopped.

Can the absolute authority of our government deliver on its promises and allow Thailand to claim the moral and environmental high ground for once? Surely we should expect no less in return for the current suspension of our normal democratic rights.

If Deputy Prime Minister MR Pridiyathorn Devakula and Energy Minister Narongchai Akrasanee fail to bring this critical issue to the urgent attention of Prime Minister Prayut Chan-o-cha and the cabinet, there is one last avenue that could still turn the tide and halt construction of the Xayaburi dam before it’s too late.

Thailand’s Supreme Administrative Court (SAC) is currently assessing the legality of the various government agencies’ approval of the PPA for the Xayaburi project, based on a complaint lodged by villagers from the eight provinces that will be impacted if the dam is completed.

Among the reasons given by the SAC for hearing the case on June 24, 2014 were the following:

— Inadequate information disclosure and public consultation concerning the project as required by the constitution.

— Recognition that construction of the Xayaburi dam may bring about severe and extensive ecological and socio-economic damage to the citizens of the four riparian countries.

— A failure to comply with the MRC’s mandatory consultation process resulting in Thailand not honouring its 1995 Mekong Agreement obligations.

Additionally, the same affected Thai villagers petitioned the Administrative Court last month seeking an injunction against Egat’s Xayaburi PPA. If granted, the injunction would likely freeze construction of the dam, pending the SAC’s final ruling, and probably lead to the project’s collapse.

A negotiated end to the dam's construction — while maintaining the interests of private sector players and the Thai and Laos governments' — still offers the best outcome. The dam’s investors and lenders would still face losses, but of manageable proportions.

To compensate them, tradeoffs could be negotiated to fast-track other sustainable hydropower projects in Laos in the Mekong’s many tributaries. That way, the income-generating objectives of Laos and Thailand’s apparently insatiable power needs could be met while conserving the ecosystem integrity of the Mekong River basin, its food and livelihood benefits for 60 million people. Thailand’s long-term need for mutually beneficial relations with three fellow Asean members — Cambodia, Laos and Vietnam — could also be satisfied.


Kraisak Choonhavan is former senator and former senate chairman of the Committee on Foreign affairs.

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