Monday, February 6, 2012

China presses Myanmar on stalled dam

China presses Myanmar on stalled dam
By Melody Kemp
Asia Times, February 7, 2012

One of the first indications that change was afoot in Myanmar came when
President Thein Sein announced last year the suspension of the
China-backed, US$3.6 billion Myitsone dam slated for the country's
remote Kachin state. Now, signs are that the fight is not over as
Chinese hydro-power lobbyists go on the offensive to have the
mega-project restarted despite extreme environmental risks.

A PowerPoint presentation made by a delegate to the recent Mekong Energy
and Ecology meeting in Bangkok indicates that China's hydro-power
industry is working hard to resurrect the shelved project. The
presentation along with other Chinese-language documents indicate that
China wants to resurrect the project as a symbol of its still strong
clout in Myanmar at a time the United States and European Union bid to
make diplomatic and commercial inroads.

The Myitsone dam is also apparently viewed by Beijing as a bellwether on
Myanmar's stance on other major Chinese investments, including the $17.5
billion oil and gas pipelines designed to transport fuel from Myanmar's
southern coast to China's southwestern, land-locked Yunnan province.

The Chinese press have reported the pipelines create 50,000 new jobs and
yield Yunnan economic returns estimated at 33 billion yuan (US$5.2
billion) in refined products per year. The pipelines will also allow
China to avoid sending its energy imports through the congested and, in
case of a future conflict with the United States, easily blocked Malacca

The Chinese Hydropower Association, government officials and Chinese
media have all accused Myanmar's government of breach of contract and of
being in the thrall of foreign, read Western, non-governmental
organizations that have campaigned steadily against the mega-project's
potential negative environmental and social impacts.

Chinese officials have asserted that Myanmar needs China's foreign
investment, which currently amounts to over 44% of the country's foreign
direct investment, to fuel economic development. However, 90% of the
estimated 3,600-6,000 megawatts of electricity that would have been
generated by the dam was slated for export to China.

Chinese hydropower interests, meanwhile, continue to assert that the
environmental impacts of the dam would be minimal. That is the portrait
painted by the upstream Ayeyawady Confluence Basin Hydropower
Corporation, a local subsidiary of the China Power Investment
Corporation, one of China's top five electricity producers, in their
latest publication "A Better Tomorrow on the Ayeyawady River."

Zhang Boting, deputy secretary general of the Chinese Society for
Hydropower Engineering and who writes for the government's mouthpiece
People's Daily newspaper, has led the propaganda offensive against
Myitsone's suspension. In a recent newspaper column he referred to Thein
Sein's safety concerns over the project as ""illogical".

"Will the natural beauty of Kachin and Myanmar be destroyed by the
project? Absolutely NOT - dams and even earthquakes have been proven to
create new beautiful scenery. This is the case with [China's] Three
River Gorges Dam, which is now more beautiful than before. Don't listen
to the extreme statements of environmentalists," he urged Thein Sein in
a newspaper column.

Striking a more assertive pose, he also recently wrote: "It is
impossible that the investor move the hydropower projects out of Myanmar
... If the Myanmar people are at risk, the investment by the investor is
at risk as well. The investor and the Myanmar people are both
stakeholders in dam construction."

"Will the reservoir cause people upstream to lose livelihoods? ... As a
World Bank official once learned in China, many people hope that they
will be lucky enough to be resettled as a result of a dam project ... as
this is a way out of poverty," Zhang's China Society for Hydropower
recently said in a statement.

"The people who designed the Myitsone are the same that designed the
Three River Gorges Dam - for them resolving resettlement issues are very
simple. The people living in the [Myitsone] resettlement area now live
like people in upscale villas in China," the statement said.

World Bank officials could not confirm the anonymous quote attributed to
it in Zhang's statement. Nor have those resettled from the Myitsone dam
site been resettled into "upscale villas", as he claimed. Photographs
and reports received by this correspondent indicate that most of the
resettled villagers - estimated by the opposition National League for
Democracy to number 12,000 - have been forced off their fertile
ancestral lands and lucrative orchards into tiny houses on clay beds
incapable of producing basic crops.

Dam high risks
The environmental risks of Myitsone, meanwhile, are enormous by
threatening the flow of the Irrawaddy River, Myanmar's main and most
culturally significant waterway. The proposed 152-meter high dam, which
if built will create a reservoir the size of Singapore, would be
situated between the Yunnan and Sagaing Faults.

A recent geological study jointly conducted by Myanmar's Ministry of
Transport and Japan's International Institute of Seismology and
Earthquake Engineering indicates that a major shift in the Sagaing
fault, situated only 100 kilometers west of the dam site, could soon
occur and might affect the new capital Naypyidaw. Their analysis and
maps showing the fault extending south into the Andaman Sea and north
into Kachin State is thought to have influenced Thein Sein's decision on
the dam.

Independent geologist and blogger Ole Nielsen noted in a blog entry that
previous dams built in Myanmar have collapsed and suggested that the
Kachin state capital Myitkyina would be wiped out in the event of a
Myitsone dam collapse. He added that the Ching Hkrang dam 16 kilometers
north of Myitkyina and the agricultural Washawng dam in Wiangmaw
district collapsed in 2006 after incessant rains.

Experts say a dam as large as Myitsone, in combination with its seismic
location, could also trigger earthquakes though so-called reservoir
induced seismicity, a geological phenomenon where water in large
reservoirs shifts land masses and through infiltration weakens
underlying fault lines. There have been over 90 identified incidences of
earthquakes triggered by water reservoirs worldwide, including in
China's Sichuan province in 2008.

Meanwhile, a United States Geological Survey team indicated in a recent
report that the Himalayan glaciers, some of which feed the Irrawaddy
River, are retreating at an alarming rate. (If so, in a few years the
Myitsone dam could become a giant sandpit.) The survey warned that the
glacial retreat brings a greater risk of so-called Glacial Lake Outburst
Floods, which occur when melt water inside a glacier breaks out with
extreme force and sends a tsunami of silt carrying water down stream
slamming into dam walls. This has already had devastating effects in
nearby Nepal.

The controversy over Myitsone runs deeper, however. Myanmar's military
junta first proposed the dam's construction in 2006 and three years
later contracted the local Asia World Company and China Power Investment
Corp (CPI) to build it. Asia World was established by Lo Hsing Han, a
Kokang Chinese from the opium-producing region of Myanmar 's Golden
Triangle who has been identified by the United States Drug Enforcement
Agency for involvement in narcotics trafficking and money laundering.

Asia World is now controlled by his son Stephen Law (Tun Myint Naing)
and close to Myanmar Vice President Aung Myint Oo who in turn is a close
ally of former junta leader Senior General Than Shwe.

The now stalled joint venture agreement between the CPI and Asia World
involves many powerful interests. The deal enabled CPI to build and
operate Myitsone in partnership with Myanmar Electric Power Enterprises
and a consortium of Chinese companies, including the China Gezhouba
Group Corporation, whose contract is worth $153 million, China Power
Investment Corporation Materials and Equipment Company, whose concrete
work had been priced at $75 million and the politically connected
Sinohydro Corp, which was responsible for road building and civil

Despite those big commercial interests, Thein Sein said he was
responding to the "will of the people" in suspending the dam. The
decision has raised bilateral tensions, with China's Ministry of Foreign
Affairs spokesman Hong Lei saying in October soon after the announcement
that Myanmar must "protect the legal and legitimate rights of Chinese
companies". It's unclear if Myanmar has paid any compensation since the
mega-project was stalled.

CPI president and Communist Party secretary Lu Qizhou said in interviews
soon after the September 30 suspension was announced that he was
"shocked" by the decision and insisted that his company had followed all
legal procedures in winning the contract.

The various interested parties in the dam maintain that hundreds of
scientists had agreed that the environmental impacts would be minimal
despite the size of the reservoir and the biodiversity significance of
the dam site. (Some Yangon-based cynics say that this is because Chinese
poachers have already cut or mined everything of value around the dam site.)

Myanmar has yet to formulate comprehensive laws supporting regulations
or even research teams capable of completing the rigorous testing and
reporting necessary to properly assess such a massive project. However,
it is clear from Thein Sein's "will of the people" statement that his
government takes environmental concerns more seriously than the previous
ruling military junta.

While the dam has been deferred until 2015, coinciding with the end of
Thein Sein's term, wrangling over the multi-billion dollar mega-project
is expected to animate China-Myanmar relations in the years ahead.
Taking into account the cultural significance of the Irrawaddy River and
the ongoing conflict in Kachin state, it is possible that Thein Sein's
suspension will eventually lead to an outright cancellation. (Already
some of the resettled families have returned to their home villages,
according to on-the-ground sources.)

In a survey published in Myanmar Affairs, a website maintained by
Myanmar academics, 58% of respondents surveyed approved of Thein Sein's
environmental initiatives. The survey found that 90% of the 1,000 people
interviewed opposed the Myitsone dam for environmental, socioeconomic
and cultural reasons. While China continues to propagandize that the
Myitsone dam is Myanmar's national interest, Myanmar's people and
leadership view it differently.

Melody Kemp is an environmental journalist currently living in Indonesia.

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