Photo: Gerard Cheong
The downstream side of the Theun Hinboun dam wall soon after completion of
construction
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| The Contested Landscapes of the Nam Theun, Lao PDR |
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Australian Mekong Resource Centre |
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The 210MW Theun Hinboun project (originally known as Nam
Theun 1-2 under the first Mekong Secretariat
study of the Nam Theun) is significant for a number of reasons. It
was officially opened on 4 April 1998 and is the first Build-Own-Operate-Transfer
hydropower project to be built in Laos. It is also the first to sell power
under the 1993 Memorandum of Understanding between Thailand and Laos that
would deliver 1,500MW of electricity to Thailand by year 2000. |
| Photo: Gerard Cheong The downstream side of the Theun Hinboun dam wall soon after completion of construction |
Theun Hinboun, like Nam Theun 2 is an inter-basin transfer scheme designed to export power to neighbouring Thailand. It diverts 110m3/sec of river flow from the Nam Theun basin into the Nam Hinboun basin (this combination gives the project its name) through a 5.2km headrace tunnel into a power station lying some 240m below the level of the reservoir created by the dam on the Nam Theun. Costing US$280 million, the Lao government was provided with a loan of US$60 |
| million from the Asian Development Bank (ADB) to
partially finance its 60% equity in the project through its state owned power utility
Electricity du Laos (EdL). The other investors that make up the consortium are MDX Lao
Company Ltd. of Thailand (20%); and Nordic Hydropower AB of Sweden (20%), itself a
consortium of the two largest Nordic hydro utilities, Norway's Statkraft and Sweden's
Vattenfall each with equal shares in Nordic Hydropower. The developers claim that the
economic benefits to Laos are substantial. The BOOT concession is for 30 years and its
projected average rate of return is claimed to be approximately 26% over the concession
period after which the project is contracted to be transferred over to the Lao government. |
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| Although the Memorandum of Understanding for the development
of Theun Hinboun was signed in June 1993, soon after that of Nam Theun 2,
Theun Hinboun proceeded at a much faster pace than Nam
Theun 2 because it is a much smaller project whose original feasibility
studies (now discredited) predicted minimal impacts due to the narrow confines
of the reservoir within the steep banks of the Nam Theun (as opposed to
the flooding of a plateau located partly in a National
Biodiversity Conservation Area at Nam Theun 2). Despite this, the implementation of Theun Hinboun has not escaped the attention and opposition of international development and environmental Non Government Organisations (NGOs), though that opposition has been somewhat overshadowed by the intensity of that experienced over Nam Theun 2. Theun Hinboun has been contested at various stages for various reasons and remains so today. Initially, Theun Hinboun created much controversy for its links to Nordic development aid and its hydropower industry which was languishing domestically. Nordic hydropower had run out of work because of public opposition to domestic dam building, and Nordic governments were keen to promote and export their home grown expertise and services in the industry. It is a situation that is mirrored in many of the other major dam building countries such as Canada (presently involved in the Three Gorges Dam in China), the United States and Australia. Nordic development aid served to subsidise the project by funding project surveys including the Environmental Impact Assessment (EIA) in 1993; the technical design in 1994; and supplementary |
 Photo: Gerard Cheong View of the Theun Hinboun power station lying 240m below the level of the reservoir  Photo: Gerard Cheong Theun Hinboun power station and discharge channel leading to the Nam Hai/Nam Hinboun  Photo: Gerard Cheong Reservoir side of the Theun Hinboun dam |
| environmental studies and a water management plan in 1995.
Much of this aid ended up in the pockets of Nordic consulting firms such as Norconsult
which was responsible for the EIA and technical design work. Parts of the EIA were
contested by NGOs in Norway and Thailand. This opposition forced a review and the
Norwegian aid agency NORAD eventually conceded that the studies were of poor quality. As a
result NORAD was forced to fund the supplementary studies. Despite the supplementary studies, which in most critics opinions came too late (after the technical designs were completed and construction had started), critics claim that the environmental and social costs were never seriously studied and have been downplayed by the promoters including the ADB which has consistently engaged in a public relations campaign to promote the project as environmentally sound and of great benefit to Laos. Yet problems are already beginning to emerge. Of greatest concern are the impacts on the river's ecology, fisheries, and local communities' subsistence and livelihoods through their reliance on fisheries. Fisheries are an extremely important source of protein and cash for local communities. A study commissioned by an international NGO, the International Rivers Network, carried out only 2 months after the dam had begun to impound water revealed that communities living in the downstream areas have experienced marked reductions in fish catches ranging from 30% to 90%. |
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 Photo: Gerard Cheong Theun Hinboun releasing environmental flows into the downstream Nam Theun. Low water levels in the Nam Theun are evident in this image. |
In the downstream Nam Theun, river levels are reported to be lower than
normal and in the Nam Hinboun, downstream of the discharge channels from the power
station, river flow and turbidity has increased dramatically. Both of these effects from
the project are claimed by local communities to be the cause of reduced fish catches. The
increased turbidity has affected drinking water supplies and in the reservoir itself, the
deep water has forced local fishermen to purchase expensive new nets so they can reach the
fish. Currently, a major issue of contention is whether the contracted compensatory package of US$50,000 will adequately compensate local communities for their losses, particularly those in downstream areas but out of the officially demarcated project area. Should it not, Theun Hinboun is set to demonstrate that private sector developments (of the BOOT model), despite proponents claims that they are more efficient with better financing, technology and management, are not immune from externalising social and environmental costs which governments and local communities will in the end have to |
| bear. In fact there may be greater incentives
and pressures to do so than do traditionally funded government projects particularly in
poorly developed policy and regulatory environments and where a lack of commercial
knowledge and experience leaves governments in weak negotiating positions in their
so-called 'partnership' with the private sector. |
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Bibliography Adams, T., 1996, Economic Critique of Nam Theun-Hinboun Hydropower Project and Electricity Development in Laos: Proposal for an Alternative Path to Development, Borealis Energy Research Association Asian Development Bank, 1998, Special Loan Review Mission 10-21 November 1997 - Report on Site Visit 6-9 May 1998, Asian Development Bank Norconsult, 1994, Theun Hinboun Power Project, Summary Environmental Impact Assessment Report, Lao People's Democratic Republic, Ministry of Industry and Handicraft Norplan, 1995, Impact Studies for the Theun-Hinboun Hydropower project, Laos, Ministry of Industry and Handicrafts, Hydropower Office Shoemaker, B., 1998, Trouble on the Theun-Hinboun, A Field Report on the Socio-Economic and Environmental Effects of the Nam Theun-Hinboun Hydropower Project in Laos TERRA, 1998, Theun-Hinboun dam begins operation, Watershed Vol.3 No.3 March - June 1998 Usher, A. D., 1997, Dams as Aid: A Political Anatomy of Nordic Development Thinking, Routledge, London |
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