Laos Dam Project Expected To Stem Flow of Lost Revenue
6/16/97
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Headline: Laos Dam Project Expected To Stem Flow of Lost Revenue
Sources:
Australia Vietnam Science-Technology Link
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Claire Cummings
Attorney at Law
P.O. Box 5124
Mill Valley, California 94942
US Phone: 415-491-1948
US Fax: 415-491-1240
Patrick McCully
Campaigns Director
International Rivers Network
1847 Berkeley Way
Berkeley, CA 94703, USA
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Fax. 510 848 1008
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BK1005152197 Bangkok The Nation in English 10 May 97 pp 1a, 3a
[Description of Source: The Nation--daily newspaper widely read by the
Thai elite]
Date: 6/16/97
Authors: Kamol Sukin and Puangthong Rungsawasdisab
Report by Kamol Sukin and Puangthong Rungsawasdisab
Vientiane -
Laos yesterday said revenue from its controversial Nam Theun 2 (NT2) dam
project would make up for revenue losses caused by lowered tariffs
expected after it joins the Association of Southeast Asian
Nations (Asean), probably before the end of this year.
"If Laos is granted Asean membership this year, it has to reduce
tariffs on imported goods. That means Laos will lose a large amount of
foreign income, so we must look for a new source of revenue and in this
respect the Nam Theun 2 project is very important to Laos," said Minister
of Industry and Handicrafts Khammone Phonekeo, speaking during a national
workshop yesterday.
The proposed dam project, which has raised debate worldwide over its
environmental and social impacts, is expected to generate as much as
US$250 million (Bt6.5 billion) per year in foreign exchange for Laos,
higher than the country's total revenue of 1994 plus grants.
The NT2 dam will generate 3,000 megawatts of electricity per year,
with Thailand the major purchaser. Laos has so far spent about $5 million
to hire specialists to conduct environmental and socio-economic studies
and public consultations.
Khammone said the government is not certain where it will find the
money to pay for the studies and consultations if the project is not
approved, adding that part, but not enough, of the money would be made up
from a loan from the International Development Agency, a lending arm of
the World Bank.
If Laos is admitted to Asean this year, the government will be
required to bring tariffs down to between zero and five percent, which
would pose a problem for national revenues. Between 1994 and 1995 tariff
revenues accounted for more than 20 per cent of the total national income.
Laos, Burma and Cambodia are hoping to be granted Asean membership
simultaneously this year. Asean members are all required to reduce their
tariff and non-tariff barriers imposed on agricultural and manufactured
products under the ambitious Asean Free Trade Area (Afta) trade
liberalisation scheme.
"Nam Theun 2 is a high priority for the Laotian government. We have
put in a big effort, done everything to comply with World Bank guidelines
and they have followed our activities closely," Khammone said.
Meanwhile, the World Bank also agreed that natural resources are the
biggest revenue source for Laos, one of the poorest countries in the
world.
"From the World Bank's point of view, hydropower projects have the
most potential for generating foreign exchange for Laos," a World Bank
representative who declined to be named said.
NT2 is included in the Laos national development plan, which runs
through to 2000. Income from NT2 would be allocated to many sectors such
as education, health and transportation.
Meanwhile, the World Bank yesterday announced the establishment of a
five-member International Advisory Group (IAG) to help it assess
environmental and social impact studies related to the NT2 project, a
statement from the bank said.
The measures is aimed at helping the project meet environment
standards which are vital to whether the World Bank will approve a "risk
guarantee" to the project, as requested by the Laotian government.
The statement was released on the second day of the NT2 workshop,
which was also attended by three representatives from the Bank.
According to the statement, the bank also requires that the study on
environmental and social impacts, including dam safety, be reviewed by an
independent panel of experts after the workshop is completed. The IAG
work will start after the review by the expert panel, it said.
"The bank will not make a decision on whether to support this proposed
project until all these processes are completed," the bank said.
"We [the bank] will invite five internationally recognised experts to
form the IAG. All five experts are expected to be very senior and
individually recognised in the world," said one of the bank officials who
attended the consultation workshop.
On bank representative said there would be a special speech today to
announce the exact role the bank will take. The speech was not scheduled
in the workshop's programme. The World Bank was asked by the Laotian
government to provide support for NT2 and had requested the government to
conduct five related studies. Two studies were jointly conducted by the
project's developers and the government and included an Environmental
Assessment and Management Plan and a Resettlement Action Plan.
Another three studies are the responsibility of the government and
include a study of alternative power-sector development and an
environmental and social action plan for the Nakai-Nam Theun catchment
area (the area affected by the dam) and its corridor extensions. Another
study will look at the economic and financial impacts of the project.