MAHAXAY, Khammouane, Laos — When the first raindrops fell to signal the start of this year’s wet season, villagers here began feeling uneasy. Families living along the banks of the Xe Bang Fai, in particular, have been watching the river constantly since, afraid it would again overflow and inundate their community as it did a year ago.
“The water has started to rise now and it is very worrying,” says Phang Sivanapheung, pointing to the river as she stands in front of her house in a commune in Mahaxay in Laos’s central province of Khammouane.
Standing on tiptoes and hands raised in the air, the 52-year-old woman gestures to indicate how high last year’s floodwaters had reached. She says that water filled the entire first storey of their concrete-and-wood house and almost reached the upper floor.
“Our village had never been flooded like last year,” Phang recalls. “In the past, the water would rise to the edge of the river bank and recede again. But last year the water was very high and it rose quickly and in a few days our village was already flooded.”
She laments that there was no higher ground where she could have evacuated her cows, pigs, chickens, and ducks when the water started to rise. “My 20 chickens and two pigs died,” she recounts, adding that her family’s two hectares of rice that was nearly reading for harvesting ended up rotting. Repeats Phang: “I had never seen water as high as this.”
It’s an observation shared by others elsewhere in Southeast Asia last year, when where unusually heavy monsoon rains had led to widespread flooding in countries across the region. According to the Bangkok-based United Nations Office for the Coordination of Humanitarian Affairs, at least 1,000 people were killed in the record flooding while nearly nine million across Southeast Asia were affected by it.
Thailand saw its worst floods in 50 years; floodwaters also cut off roads and destroyed crops, as well as houses and other infrastructure, in Cambodia, Vietnam, and the Philippines. Here in Laos, two storms struck in June and July, causing combined damage or destruction to 60,000 hectares of farmland in 12 provinces, according to government reports. One of the provinces worst hit by floods spawned by storm Nock-Ten was Khammouane, where 70 percent of all villages suffered damage.
Khammouane residents, however, are not about to blame Nature for last year’s severe flooding – or for what they anticipate would be repeats of the disaster. Instead, they put the blame squarely on the Nam Theun 2 (NT2) hydro-electric project, which uses water from Nam Theun and then channels the runoff downstream to Xe Bang Fai River. Echoing other locals, Phang says, “Our villages have been flooded after the construction of the Nam Theun 2 Dam.”
The company that runs the dam begs to differ, of course, citing excessive rainfall spawned by the storms as the more likely factor for the floods. But the locals insist it is legitimate to add flooding to their growing list of complaints about NT2, which just happens to be the largest of Laos’s 17 hydro-electric dams currently in operation.
Dams for development
To the International Rivers Network, the NT2 is a bane to the approximately 110,000 Lao people who live downstream of the dam. The non-profit anti-dam organisation says that the hydro-electric plant threatens villagers’ food security and their physical safety, as in the case of last year’s floods, and causes pollution. It says families also face a shortage of clean water, citing the sometimes black, filthy river water that is believed to be responsible for the skin disease among people living by the riverbanks.
The fish population in the rivers has also been falling, it adds.
Then again, other observers had warned about all these – and more — happening even when the project was still in the planning stages. But the Lao government seemed to have its heart set on building NT2 as part of its development strategy. Although landlocked, Laos has been blessed with many rivers and a strategic location that make it an ideal hydropower producer. By 1994, it was inviting the World Bank to be part of its most ambitious dam project yet. Tellingly, though, it would take 11 more years before construction could begin on Nam Theun 2 Dam.
Now called the ‘battery of Southeast Asia’, Laos boasts of ever-increasing revenues from its power exports that have helped propel its economy and slowly expand the contribution of industry to gross national product. Laos is hoping to lift its rural population from poverty through revenues from the sale of electricity produced by various hydro-electric plants built on the Mekong River and its tributaries.
One of only a few remaining communist states in the world, Laos made a slow transition to a market economy more than two decades ago. In the last 10 years alone, annual national growth has averaged six to seven percent, something that this impoverished nation is obviously proud of. The country now relies heavily on foreign capital-driven industries such as power generation and mining to finance national development and spur economic growth. But it is power generation that is attracting much attention, with foreign direct investments in the sector amounting to $4.0 billion from 2001 to 2009, or one-third of total investments in Laos during the period, according to data from the Ministry of Planning and Investment. The state-run English language Vientiane Times also reports that the government has earned $340 million from electricity exports to Thailand, Vietnam, and China in the first six months of 2012 alone.
At present, Nam Theun 2 is the jewel in the country’s hydro-electric crown. With $1.3 billion in loans and guarantees from the World Bank, the Asian Development Bank, and other institutional lenders, construction of the 1,070-MW dam on the Nam Theun commenced in 2006. It began operations in April 2010, but for one reason or another it was not officially inaugurated until December that year. It exports 95 percent of the power it produces to neighbouring Thailand, while the remainder is allotted for local consumption.
The project site is located some 250 kms east of the national capital and straddles Khammouane and Bolikhamxay provinces. Operated by Nam Theun 2 Power Co (NTPC), NT2 is owned jointly by Electricité de France (40% share), Thailand’s Electricity Generating Public Company Limited (35%), and Lao Holding State Enterprise (25%). The company has a 25-year concession to operate the plant.
Oly Phommavong, NTPC’s public relations officer in Vientiane, says the Lao government will earn no less than $80 million a year or $2.0 billion from the project in the first 25 years. But he says the full benefits of the project would redound to the country once it starts to manage the plant after 25 years.
Two rivers and thousands of families
The 39-metre-high dam sits on Nam Theun that, like Xe Bang Fai, is among Laos’s major rivers. Both waterways are also tributaries of Mekong River. Before NT2, Nam Theun was already host to the Theun-Hiboun Dam — and may soon have another if the Lao government could have its way. But it is the first time that Xe Bang Fai, which squiggles southwest from the Nakai reservoir towards the Mekong, has become entangled in a hydropower enterprise. The river runs some 239 kms across Khammouane and Savannakhet provinces.
In a paper presented in a workshop at the National University of Singapore last April, Filipino academic Teresita Cruz-del Rosario says that among those expected to feel impacts from NT2 are some 60,000 people who rely on the part of Nam Theun below Nakai Dam, as well as 89 villages along Xe Bang Fai consisting of more than 6,500 households. The effects, she writes, will include from higher water levels upstream of Xe Bang Fai to “loss of riverbank gardens, erosion of riverbanks and loss of productive lands” in the river’s upper and middle zones. Communities in lower Xe Bang Fai, says Cruz-del Rosario, “will experience flooding of riverbank gardens and possible changes in fisheries”.
A July 2012 update report on NT2 by the World Bank also acknowledges that the “release of reservoir waters into the Xe Bang Fai modifies its ecosystem” and that some possible effects of an increased water volume in the river because of the release could include riverbank erosion, a decline in fish catch, and “altered water quality in the river”. But while it says that the “full nature and extent of these impacts will only be clear after several seasons”, the report notes that measures to mitigate such negative effects have already been implemented, ranging from alternative-livelihood programmes to boreholes and pumps, to the rehabilitation of floodgates (at the government’s request, it says).
The report says as well: “The World Bank’s decision to approve the project was preceded by careful consideration of the substantial preparation, which included almost a decade of studying the project and risk evaluation, taking into account valuable lessons learned from past projects, an intense consultation process, and due diligence on environmental and social impacts, and the project’s economic costs. Public and private entities are closely monitoring project implementation through a coordinated programme.”
Missing the fish
Unfortunately, the picture is not as neat on the ground. Pheng Reng, a villager in the Yommalath district here in Khammouane, shows this writer the contents of a basket he is holding: freshwater shrimps and some fish no bigger than the shrimps, plus a few snails. Apparently, these make up his catch for the day.
“Every day, we catch only small fish like this and there is no big fish,” says the 58-year-old, who with his wife uses a net to fish in the river. “Before, we used to catch Real and Keh fish, but we don’t know where they have gone.”
With his shorts still wet from fishing and a traditional Khmer scarf hanging from his waist, Pheng Reng says that the river used to have abundant fish to catch and sell. But the father of six that includes three young children laments, “The fish have gone scarce since they started building the hydro-electric dam. Now I cannot even catch enough to put on our own table.”
When asked how they manage if there is no catch, Pheng Reng looks at a loss for words. It is his wife who replies, “It’s really very hard. We depend on fish in the river, so what do we eat if there is none?”
But the couple indicates that like other Lao, they keep their discontent mostly to themselves and will not take their problems to the government. They rely on their own resourcefulness, they say. “We will climb the mountain to collect mushrooms and bamboo shoots instead,” says Pheng Reng.
It could well be that they may just be having a rather long streak of bad luck. After all, 18-year-old Anong, who lives in the same village as the couple, has had a different experience. He says that he now catches nearly half a kilo of fish every day compared to a just a few fish in 2007.
“Of course, the fish population had drastically declined between 2007 and 2011 when they were building the hydroelectric dam,” he says while preparing to spread a fishing net across Xe Bang Fai one late afternoon in July. “But there has been more fish since 2011.”
Still, the young man says that he has noticed a change in the Xe Bang Fai’s behaviour since the dam’s construction. “Now the currents of the river are very strong whether it is during the dry or rainy season,” he says while untangling his net. “When the water flows like this, it causes difficulties for fisherfolk like us. Our boat can capsize; our fishing net can remain afloat and twisted. Sometimes, we cannot spread out the fishing net altogether.”
Pivong Soma, who lives along the banks of Xe Bang Fai in Mahaxay, meanwhile says she and her family would move if they had money. Says the 32-year-old mother of two: “My husband has complained that it is hard to make a living here because the fish in the river are getting scarcer. It is very difficult for us to live along this river. How can we live if we cannot catch fish?”
Farmers’ turn to complain
Fishers, however, are not the only ones saying that the dam has wreaked havoc on their means of livelihood. Rice farmers are upset with NT2 as well, since many remain convinced that it caused the 2011 floods that destroyed their fields.
A typical family in central Laos owns from one to four hectares of land planted to rice. According to an August 2011 government report, some 37,000 hectares of rice field in Khammouane province, or 63 percent of that year’s wet-season rice crop, were inundated by floodwaters from the Mekong and Xe Bang Fai rivers. About 17,000 hectares of this were reportedly destroyed.
After last year’s floods, local officials asked affected villagers to give dry-season rice farming a try as a means to cope with the food shortage and to recover from losses in the previous rice-planting season.
Dry-season rice farming is alien to many families living along the Xe Bang Fai, but this may soon become part of the people’s new way of life here. Which isn’t making any local very happy.
Phang Sivanapheung, one of the villagers in Mahaxay who now start worrying about floods at the slightest hint of rain, says she harvested three tonnes of rice from her two-hectare farm in the last dry season. By comparison, she used to get nearly five tonnes from the wet-season rice farming. She says farmers in her commune shun dry-season farming because it is expensive yet produces a small yield. In fact, it costs twice as much as rainy-season rice farming.
“On average, I spend only a small amount of money on rice seeds, plowing, and fertilisers,” says Phang. “I would spend nearly $200 for a hectare during the rainy season but I have to spend around $400 per hectare for dry-season rice farming.”
“Most importantly,” she continues, “we have to spend a lot on fertilisers for dry- season rice farming. We use five or six sacks of fertilisers for one hectare and it costs $35 per sack of fertilisers. We don’t want to do dry-season rice farming, but we have no choice. If we don’t do it, we will not have rice to eat.”
Life at the new villages
By many indications, most of the families displaced by the project at Nakai Plateau had at first thought they would not have similar concerns. Widely regarded as the more fortunate among those affected by the dam, the 6,200 or so families then living at the plateau were forced to leave their homes there in 2008 to make way for a 450-square-kilometre reservoir. In exchange, though, they not only received compensation from NTPC, but were also relocated to a community carved on the slope of a mountain not too far away, and where the power company had built roads, new houses, a school, and a health centre, as well as provided clean water. Moreover, each family received 0.60 hectare of land for agricultural use.
The amenities made the families happy at first. These days, however, some people have begun to worry about where to source their food in the long-term. One of them is Ketsana, who was repairing his boat parked under the big house he had received from the power company when this writer chanced upon him.
The village where he lives at present actually boasts of orderly rows of identical wooden houses. And Ketsana acknowledges the comforts of life he now enjoys as far as social services and facilities are concerned. Apart from being provided electricity from the dam project, he says he now owns an electric fan and a refrigerator.
What he does not have, however, is land suitable for farming, which means he now has to rely only on meager earnings from fishing. Yet while he could probably make do with only that much money in the past, his problem is that he now has to earn four or five times more than he made in the old village in order to be able to use his electrical appliances.
Ketsana says some of the plots of land that NTPC had allocated to each family are not arable. The plot he himself received is unfertile mountainous land not suitable for growing rice or vegetables. Some farmers who have planted rice on the land are unable to harvest rice enough to feed their families, he says. A plot of land smaller than one hectare cannot sustain a family of eight or 10, he explains.
“At the old village, we had large, fertile ricefields and we never worried about going hungry as long as we were hardworking,” Ketsana says while wiping off engine oil from his hand with a piece of old cloth. But he says that is no longer the case. “We cannot depend on fishing or farming like before. At this place, 95 percent of the villagers go to the mountains to cut luxury wood for sale. It is illegal, but we have to do it. Otherwise, we will not have money to buy rice to eat.”
He glances furtively at the neighbouring houses and then says in a low voice: “These people have all left to cut the trees. Some people return in the afternoon, while others have to sleep in the forests a night or two.”
Paying for power
The villagers also rue paying for the electricity produced from the dam, which had caused their dislocation in the first place.
According to the agreement, the power company is supposed to provide electricity to the villagers for free for four years. But residents here say that the company started charging them electricity in 2011, or just two years after they moved to their new community.
Ketsana shows an invoice for his electricity consumption in May 2012 totaling 49,234 kips or about $6. He says, “In my house, we use only two lamps, a refrigerator, and a television. I think this is very expensive.”
The invoice does not show the cost per kilowatt of electricity used but states only the total amount of money the consumer has to pay. Villagers here say a family pays between $5 and $8 per month for electricity – quite a burden in a place where the average annual income is probably far less than the national figure that just barely clears $1,000.
Kong Saboun, coordinator of the dam monitor International Rivers in Khammouane, is concerned that the issue of food security here may have wider repercussions. He says food scarcity due to the loss of people’s main sources of livelihood – agriculture and fisheries — may result in deforestation. “If the Lao government does not review this issue,” he warns, “the forests in Nakai Plateau will be destroyed in the near future because of people trying to find the means to support their expensive (manner of) living.”
NTPC, however, maintains that Nam Theun 2 has improved the living conditions of the thousands of families who were resettled because of the project. Says a company public relations representative at the NT2 Visitor’s Centre in Yommalath, where illustrations showing the advanced technology used in building the dam and protecting the environment grace the walls: “In 2007 the value of the total assets of each family was estimated at only $120. But in 2009 their assets were estimated at $480 per family after they had moved to the new village. This was what our company had provided.”
The PR person who identifies herself only as ‘Ms. Chinda’ also reiterates that NT2 had nothing to do with the 2011 floods here. She explains that technicians had in fact built two dams to accommodate the natural flow of the river: The larger dam was to generate electricity; the second dam at Nakai was used as a reservoir to help regulate the river flows, making sure that the currents are not too strong or too slow.
Company officials have said as well that twice last year they had slowed and eventually stopped the release of water from the dam into its downstream channel when Xe Bang Fai was spilling over. In compliance with an agreement with the government, the officials say they will implement this measure again this year to avoid flooding downstream.
Meantime, Vientiane Times has reported that four more hydroelectric dams are scheduled for commissioning before the year ends. In an October 2012 article, it also says the Nam Theun 2 dam has “become one of the world’s best models of sustainable hydropower development” and “has been held up as a model of environmental and social responsibility, enabling local people to lead better lives”.
States the newspaper report: “The Lao government says it always gives priority to social and environmental issues to ensure that hydropower projects are beneficial for local communities.”
[Ghep Navin is a correspondent for the Khmer service of Radio France International (RFI). He is based in Phnom Penh.]