World Bank set to approve financing for Congo's Inga dam
By Peter Jones
Reuters, March 14, 2014
http://in.reuters.com/article/2014/03/14/congo-democratic-inga-idINL6N0MB1W020140314
KINSHASA, March 14 (Reuters) - The World Bank is likely to approve $73
million next week to fund an expansion of the Inga hydroelectric dam in
Democratic Republic of Congo, a bank official said on Friday.
The decision will be a relief to investors, particularly mining
companies which have been threatened with electricity rationing due to a
lack of power generation, but environmentalists say the impact of the
project has not been properly evaluated.
The World Bank's administrative council had been due to meet on the
matter in Washington on Feb. 10, but that was postponed to March 20,
raising the prospect that the third phase of expansion of the Inga dam
on the Congo, 250 km (156 miles) southwest of Kinshasa, would not be
approved.
But World Bank country director in Congo, Eustache Ouayoro, told a news
conference in Kinshasa: "We have had discussions with the (Bank)
administrators which indicated to us that the project will be supported."
Only 9 percent of Congo's 65 million people have access to electricity
and the mining sector on which its economy relies has been hamstrung by
a lack of power.
In January, Prime Minister Augustin Matata Ponyo wrote a letter to
President Joseph Kabila setting out plans to ration power to major
international mining companies in the copper-rich Katanga province and
demanding that miners halt any plans for expansion.
The suspension of new mining projects comes as Congo is achieving record
high copper production: 942,000 tonnes in 2013, according to the
International Monetary Fund.
Two existing hydropower stations on the Congo river - Inga I and II -
are decades old and in disrepair, struggling to provide enough
electricity to meet demand.
Inga III, once built, would provide 4,800 MW of energy - this would
comfortably cover the 450 MW deficit mining companies in Katanga
complain of.
Campaign group International Rivers has called on the World Bank to fund
smaller, more local energy projects that it says would be less
environmentally damaging and more effective.
"The proposed Inga 3 Dam fails to reduce energy poverty and protect the
environment in the DRC," the group's policy director, Peter Bosshard, said.
The U.S. representative at the World Bank is likely to vote against the
Inga project following recent legislation in Congress directing U.S.
officials at international organizations to vote against big dams, but
Ouayoro believes the financing will be approved anyway.
President Joseph Kabila's government has said it hopes to begin
construction of Inga III by the end of 2015 but Ouayoro said this was
ambitious and he expected work to begin by the end of 2016.
"This is a gigantic project with enormous risks," he said. "The earlier
it starts the better, but 2015 will be difficult. We think the first
turbine will be operational five years after the start of construction,
but again it is a huge job." (Editing by Daniel Flynn and Robin Pomeroy)
________________________________________________
This is International Rivers' mailing list on the role of international financial institutions in promoting large dams.
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Friday, March 14, 2014
World Bank set to approve financing for Congo's Inga dam
World Bank set to approve financing for Congo's Inga dam
By Peter Jones
Reuters, March 14, 2014
http://in.reuters.com/article/2014/03/14/congo-democratic-inga-idINL6N0MB1W020140314
KINSHASA, March 14 (Reuters) - The World Bank is likely to approve $73
million next week to fund an expansion of the Inga hydroelectric dam in
Democratic Republic of Congo, a bank official said on Friday.
The decision will be a relief to investors, particularly mining
companies which have been threatened with electricity rationing due to a
lack of power generation, but environmentalists say the impact of the
project has not been properly evaluated.
The World Bank's administrative council had been due to meet on the
matter in Washington on Feb. 10, but that was postponed to March 20,
raising the prospect that the third phase of expansion of the Inga dam
on the Congo, 250 km (156 miles) southwest of Kinshasa, would not be
approved.
But World Bank country director in Congo, Eustache Ouayoro, told a news
conference in Kinshasa: "We have had discussions with the (Bank)
administrators which indicated to us that the project will be supported."
Only 9 percent of Congo's 65 million people have access to electricity
and the mining sector on which its economy relies has been hamstrung by
a lack of power.
In January, Prime Minister Augustin Matata Ponyo wrote a letter to
President Joseph Kabila setting out plans to ration power to major
international mining companies in the copper-rich Katanga province and
demanding that miners halt any plans for expansion.
The suspension of new mining projects comes as Congo is achieving record
high copper production: 942,000 tonnes in 2013, according to the
International Monetary Fund.
Two existing hydropower stations on the Congo river - Inga I and II -
are decades old and in disrepair, struggling to provide enough
electricity to meet demand.
Inga III, once built, would provide 4,800 MW of energy - this would
comfortably cover the 450 MW deficit mining companies in Katanga
complain of.
Campaign group International Rivers has called on the World Bank to fund
smaller, more local energy projects that it says would be less
environmentally damaging and more effective.
"The proposed Inga 3 Dam fails to reduce energy poverty and protect the
environment in the DRC," the group's policy director, Peter Bosshard, said.
The U.S. representative at the World Bank is likely to vote against the
Inga project following recent legislation in Congress directing U.S.
officials at international organizations to vote against big dams, but
Ouayoro believes the financing will be approved anyway.
President Joseph Kabila's government has said it hopes to begin
construction of Inga III by the end of 2015 but Ouayoro said this was
ambitious and he expected work to begin by the end of 2016.
"This is a gigantic project with enormous risks," he said. "The earlier
it starts the better, but 2015 will be difficult. We think the first
turbine will be operational five years after the start of construction,
but again it is a huge job." (Editing by Daniel Flynn and Robin Pomeroy)
________________________________________________
You received this message as a subscriber on the list: africa@list.internationalrivers.org
To be removed from the list, please visit:
http://org.salsalabs.com/o/2486/unsubscribe.jsp
By Peter Jones
Reuters, March 14, 2014
http://in.reuters.com/article/2014/03/14/congo-democratic-inga-idINL6N0MB1W020140314
KINSHASA, March 14 (Reuters) - The World Bank is likely to approve $73
million next week to fund an expansion of the Inga hydroelectric dam in
Democratic Republic of Congo, a bank official said on Friday.
The decision will be a relief to investors, particularly mining
companies which have been threatened with electricity rationing due to a
lack of power generation, but environmentalists say the impact of the
project has not been properly evaluated.
The World Bank's administrative council had been due to meet on the
matter in Washington on Feb. 10, but that was postponed to March 20,
raising the prospect that the third phase of expansion of the Inga dam
on the Congo, 250 km (156 miles) southwest of Kinshasa, would not be
approved.
But World Bank country director in Congo, Eustache Ouayoro, told a news
conference in Kinshasa: "We have had discussions with the (Bank)
administrators which indicated to us that the project will be supported."
Only 9 percent of Congo's 65 million people have access to electricity
and the mining sector on which its economy relies has been hamstrung by
a lack of power.
In January, Prime Minister Augustin Matata Ponyo wrote a letter to
President Joseph Kabila setting out plans to ration power to major
international mining companies in the copper-rich Katanga province and
demanding that miners halt any plans for expansion.
The suspension of new mining projects comes as Congo is achieving record
high copper production: 942,000 tonnes in 2013, according to the
International Monetary Fund.
Two existing hydropower stations on the Congo river - Inga I and II -
are decades old and in disrepair, struggling to provide enough
electricity to meet demand.
Inga III, once built, would provide 4,800 MW of energy - this would
comfortably cover the 450 MW deficit mining companies in Katanga
complain of.
Campaign group International Rivers has called on the World Bank to fund
smaller, more local energy projects that it says would be less
environmentally damaging and more effective.
"The proposed Inga 3 Dam fails to reduce energy poverty and protect the
environment in the DRC," the group's policy director, Peter Bosshard, said.
The U.S. representative at the World Bank is likely to vote against the
Inga project following recent legislation in Congress directing U.S.
officials at international organizations to vote against big dams, but
Ouayoro believes the financing will be approved anyway.
President Joseph Kabila's government has said it hopes to begin
construction of Inga III by the end of 2015 but Ouayoro said this was
ambitious and he expected work to begin by the end of 2016.
"This is a gigantic project with enormous risks," he said. "The earlier
it starts the better, but 2015 will be difficult. We think the first
turbine will be operational five years after the start of construction,
but again it is a huge job." (Editing by Daniel Flynn and Robin Pomeroy)
________________________________________________
You received this message as a subscriber on the list: africa@list.internationalrivers.org
To be removed from the list, please visit:
http://org.salsalabs.com/o/2486/unsubscribe.jsp
Thursday, March 13, 2014
Study Finds Big Cost Overruns on Global Dam Megaprojects
Study Finds Big Cost Overruns on Global Dam Megaprojects
Engineering News Record, 03/11/2014
By Scott Lewis
https://enr.construction.com/business_management/project_delivery/2014/0317-study-finds-big-cost-overruns-on-global-dam-megaprojects.asp
Large dam projects make bad investments, according to a new global study
by a team from Oxford University, England. Three-quarters of the
projects analyzed by researchers experienced cost overruns, with the
average increase reported as 96% higher in real terms than the figure
cited by the project owner when the construction decision was made, says
Bent Flyvbjerg, professor of major program management at the
university's Saïd Business School.
"We find that even before accounting for negative impacts on human
society and environment, the actual construction costs of large dams are
too high to yield a positive return," the study concludes. The report
analyzed all large dams built between 1934 and 2007, for which
comprehensive documentation was available. It covers 245 projects in 65
countries.
The documents include both business case documents, project appraisals
and implementation completion reports drawn from six sources: World
Bank, Asian Development Bank, World Commission on Dams, U.S. Army Corps
of Engineers, Tennessee Valley Authority and the U.S. Bureau of Reclamation.
"Sources of cost overruns can be divided into apparent causes and root
causes," says Atif Ansar, an associate fellow at the Saïd school and the
study's co-author. Apparent causes include site-specific characteristics
such as unfavorable geology, imported dam inputs with exposure to
commodity prices and exchange rate depreciation in developing countries.
"Underlying these apparent causes are root causes," adds Ansar. One root
cause is "optimism bias," which occurs when political officials make
too-bold claims of speed-of-project completion; these claims happen more
often in democracies than in authoritarian countries, the report
contends. Another root cause is "strategic misrepresentation," which is
when project promoters (deliberately) underestimate costs to push
approval, the study says.
The authors acknowledge that large dams in North America do not
experience certain problems facing dam owners and builders in developing
nations. Because North American dams are built with domestic inputs,
they are not exposed to exchange rates or global supply-chain problems,
researchers say. Nonetheless, the projects still experience cost
overruns, often tied to schedule delays due to optimism bias.
The study found that cost overruns on large dams are higher than for
most other large projects. The authors cite typical cost overruns of 6%
for thermal power plants, 20% for roads, 34% for fixed links (bridges
and tunnels) and 45% for railways. However, on nuclear powerplants, the
figure is 207%.
The study's "methods of evaluation appear to be credible but very
narrowly focused," says Keith Ferguson, national program leader for dams
and hydraulic structures at HDR and current president of the U.S.
Society on Dams, whose members are dam designers, builders, owners and
government officials. "They have highlighted our industry's past
challenges in estimating costs for construction," he adds. "The current
state of practice in the U.S. and beyond has a keen focus on estimating
costs more reliably, including introducing risk and uncertainty into the
cost modeling, to better understand and characterize the true long-term
impacts."
Peter Bosshard, policy director of International Rivers, an
environmental group, says the recent resurgence in megaprojects is
because China, Brazil and Korea "have pretty much rolled up the world
market." The Oxford study "poses serious questions" about whether large
dams should continue to be built, he says.
The International Energy Agency, part of the United Nations, recommends
building renewable projects and mini-grids to feed a small area. "It is
not cost-effective to extend national grids to reach the rural poor in
Africa and South Asia," says Bosshard. "The future of wind, solar and
small hydropower is probably more promising from a disinterested
investor perspective."
Flyvbjerg notes that the study "should not be seen as anti-hydropower
but against the flaws in the building of very large dams."
________________________________________________
You received this message as a subscriber on the list: dams@list.internationalrivers.org
To be removed from the list, please visit:
http://org.salsalabs.com/o/2486/unsubscribe.jsp
Engineering News Record, 03/11/2014
By Scott Lewis
https://enr.construction.com/business_management/project_delivery/2014/0317-study-finds-big-cost-overruns-on-global-dam-megaprojects.asp
Large dam projects make bad investments, according to a new global study
by a team from Oxford University, England. Three-quarters of the
projects analyzed by researchers experienced cost overruns, with the
average increase reported as 96% higher in real terms than the figure
cited by the project owner when the construction decision was made, says
Bent Flyvbjerg, professor of major program management at the
university's Saïd Business School.
"We find that even before accounting for negative impacts on human
society and environment, the actual construction costs of large dams are
too high to yield a positive return," the study concludes. The report
analyzed all large dams built between 1934 and 2007, for which
comprehensive documentation was available. It covers 245 projects in 65
countries.
The documents include both business case documents, project appraisals
and implementation completion reports drawn from six sources: World
Bank, Asian Development Bank, World Commission on Dams, U.S. Army Corps
of Engineers, Tennessee Valley Authority and the U.S. Bureau of Reclamation.
"Sources of cost overruns can be divided into apparent causes and root
causes," says Atif Ansar, an associate fellow at the Saïd school and the
study's co-author. Apparent causes include site-specific characteristics
such as unfavorable geology, imported dam inputs with exposure to
commodity prices and exchange rate depreciation in developing countries.
"Underlying these apparent causes are root causes," adds Ansar. One root
cause is "optimism bias," which occurs when political officials make
too-bold claims of speed-of-project completion; these claims happen more
often in democracies than in authoritarian countries, the report
contends. Another root cause is "strategic misrepresentation," which is
when project promoters (deliberately) underestimate costs to push
approval, the study says.
The authors acknowledge that large dams in North America do not
experience certain problems facing dam owners and builders in developing
nations. Because North American dams are built with domestic inputs,
they are not exposed to exchange rates or global supply-chain problems,
researchers say. Nonetheless, the projects still experience cost
overruns, often tied to schedule delays due to optimism bias.
The study found that cost overruns on large dams are higher than for
most other large projects. The authors cite typical cost overruns of 6%
for thermal power plants, 20% for roads, 34% for fixed links (bridges
and tunnels) and 45% for railways. However, on nuclear powerplants, the
figure is 207%.
The study's "methods of evaluation appear to be credible but very
narrowly focused," says Keith Ferguson, national program leader for dams
and hydraulic structures at HDR and current president of the U.S.
Society on Dams, whose members are dam designers, builders, owners and
government officials. "They have highlighted our industry's past
challenges in estimating costs for construction," he adds. "The current
state of practice in the U.S. and beyond has a keen focus on estimating
costs more reliably, including introducing risk and uncertainty into the
cost modeling, to better understand and characterize the true long-term
impacts."
Peter Bosshard, policy director of International Rivers, an
environmental group, says the recent resurgence in megaprojects is
because China, Brazil and Korea "have pretty much rolled up the world
market." The Oxford study "poses serious questions" about whether large
dams should continue to be built, he says.
The International Energy Agency, part of the United Nations, recommends
building renewable projects and mini-grids to feed a small area. "It is
not cost-effective to extend national grids to reach the rural poor in
Africa and South Asia," says Bosshard. "The future of wind, solar and
small hydropower is probably more promising from a disinterested
investor perspective."
Flyvbjerg notes that the study "should not be seen as anti-hydropower
but against the flaws in the building of very large dams."
________________________________________________
You received this message as a subscriber on the list: dams@list.internationalrivers.org
To be removed from the list, please visit:
http://org.salsalabs.com/o/2486/unsubscribe.jsp
Tuesday, March 11, 2014
Beware large dams and their handlers — study
http://www.bdlive.co.za/africa/africanbusiness/2014/03/11/beware-large-dams-and-their-handlers--study
Africa / African Business
Beware large dams and their handlers — study
BY RAZINA MUNSHI, MARCH 11 2014
MEGAPROJECTS should be approached with caution, as few managers anywhere in the world are able to forecast their costs and deadlines correctly, new research on megadams between 1934 and 2007 shows.
This applies particularly in the energy field and in Africa, making South Africa's support for the largest hydropower scheme in the world, the $100bn Grand Inga project in the Democratic Republic of Congo, quite risky.
Large dams usually overshoot their budgets by an average of 96%, which is more than any other asset class, including rail, roads and tunnels, Atif Ansar, Oxford University lecturer and associate fellow at its Saïd Business School tells Business Day.
Dr Ansar has co-authored a report published this month in Energy Policy journal, titled Should We Build More Large Dams? The Actual Cost of Hydropower Megaproject Development. "One ill-conceived dam in a developing country has the potential to cause a sovereign debt crisis," he says.
Pakistan's Tarbela dam, built in the 1970s, resulted in a 23% increase in Pakistan's external public debt stock between 1968 and 1984. Pakistan is still paying, decades later, says Dr Ansar.
Costs of dams are often too high to deliver risk-adjusted returns even in developed countries, his research has found.
Three out of every four large dams surveyed suffered cost overruns. They also took an average of 8.6 years to build, often making them ill-advised, and even dangerous.
African nations are particularly vulnerable. Costs are likely to spiral in countries with low per-capita incomes, unstable currencies and high inflation rates. Without strong economic fundamentals, as well as high-level expertise to manage complex projects, developing countries are at risk of damaging their economies by constructing large dams, Dr Ansar says.
Brazil's $14.4bn megadam, the Belo Monte hydroelectric project, is a classic example.
Tensions with local communities have overshadowed its economic sacrifice. By the time the dam is completed, its costs will have ballooned to $27.4bn. Public money, some from pension funds, has been used to build the dam, because of a lack of interest from private investors.
The research surveyed 245 large dams, with a total value of $353bn, built between 1934 and 2007 in 65 countries, including South Africa. All large dams for which valid and reliable data could be found were included.
There are other concerns. The ability of African countries to develop and manage mega-projects is limited, which increases the high risk of failure, head of capital projects advisory at Deloitte, Sheldon Morris, says.
Even in South Africa, where state enterprises such as Eskom and Transnet have commissioned large projects, in-house expertise is limited. Reliance on contractors is dangerously high.
Repeated delays to the construction of Eskom's 4,800MW Medupi power station have seen costs spiralling, the project is far from complete and problems have compounded.
Mr Morris says megaprojects around the world seem to attract the same people, who move from project to project, developing specialised and highly technical skills. African nations are rarely exposed to this expertise.
And Dr Ansar's research shows that managers do not learn from past mistakes. Forecasts about costs and deadlines are likely to be as misguided today as they were in 1934.
But Africa's demand for energy could result in a push for projects such as Grand Inga. It has the potential to produce up to 44,000MW from eight separate dams, more than a third of the electricity produced in Africa.
The Democratic Republic of Congo has dreamt of developing the project for decades, but internal conflict has prevented it from being realised.
In October last year, President Jacob Zuma signed a treaty with Congo's President Joseph Kabila to co-operate on Inga 3 Basse Chute, the next step in the development of the Grand Inga site. South Africa has committed itself before to buying 2,500MW from Inga 3, which will have a capacity of 4,800MW. The project could cost about $12bn.
This treaty, Mr Zuma said at the time, "represents a practical commitment of the two countries to jointly partner to develop this gigantic project". But it has not been released to the public, fuelling speculation that it adds little more to previous treaties.
Despite reports of plans to begin construction of Inga 3 in October, it is hard to tell whether there has been real progress.
Three bidders are standing in line to benefit: China Three Gorges and Sinohydro; Posco and Daewoo of South Korea in partnership with Canada's SNC-Lavalin Group; and Spain's Actividades de Construccion y Servicios and Eurofinsa Group.
The condition of Inga 1 and 2 underlines that investors should approach new projects with caution. Inga 1, built in 1972, and Inga 2, completed in 1982, have a capacity of only 1,775MW, but a lack of refurbishments have resulted in their operating even further below capacity.
Both have suffered from a chronic lack of maintenance. Power lines to Congo's capital Kinshasa, which is 450km away, have not been upgraded at all, according to news reports.
South Africa's reasons for supporting the project are said to be political. Cost savings do not appear to be the issue — South Africa is able to develop energy projects more cheaply. Energy from other renewable sources will cost significantly less than what South Africa will eventually pay for hydro-generated power from Congo.
The investor community's scepticism may also affect the project. Opinions at the recent Africa Energy Indaba in Johannesburg suggested investors are wary about megaproject development, in spite of high demand, and regardless of which asset class they fit into.
Smaller projects in South Africa have been very successful. Investment into South Africa's power sector has increased dramatically, but the record of investment in the rest of Africa is extremely low. Last year in sub-Saharan Africa excluding South Africa, just 12 renewable energy projects were closed.
The reality for Grand Inga is that only a successful Inga 3 would help raise investors' confidence in the remaining five stages of the project.
Dr Ansar's research has found fault with the behaviour of politicians and policy makers: they bring an "optimistic bias" to new projects, because they seek the support of a constituency wanting to see development.
Others deliberately mislead the public about the time and cost of getting projects approved, sometimes for personal benefit.
And some policy makers, he says, ignore rare events and problems that are likely to affect the project. They have difficulty processing the probability of events that may happen far into the future.
Policy makers should keep projects as short as possible, he believes. In Africa, limited funds, coupled with the urgency to grow the continent's energy capacity, lend themselves to the construction of smaller projects that can deliver energy projects quicker, using fewer resources.
sign-on to demand EDF drops Mphanda Nkuwa dam
Please sign on
-------- Original Message --------
Subject: [foei-EJRN] please sign-on to demand EDF drops Mphanda Nkuwa dam
Date: Tue, 11 Mar 2014 10:13:00 +0200
From: Anabela Lemos <anabela.ja.mz@gmail.com>
To: Anabela Lemos <anabela.ja.mz@gmail.com>
Dear comrades,
As some of you know, JA has been fighting against the proposal Mphanda Nkuwa dam in the Zambezi river for well over 12 years. since the EIA was approved (2011) without even answering our questions and concerns, we have been following the energy-purchase agreements funding.
The reason this horrid project was not rejected, is Guebuza, the president of Mozambique´s own interest and involvement, using his power to push the project for his own benefit. The latest news was that the South African president Zuma and his son are also involved. see our blog on this topic here <http://ja4change.wordpress.com/2013/12/02/water-financialization-exposed-in-new-report-on-eve-of-wto-meeting-includes-critique-of-proposed-mphanda-nkuwa-dam-in-mozambique/>.
As such we discovered that EDF (Electricity of France), is interested in partly funding the project, so we hope to raise their awareness to such a risky project, and in doing so hopefully they will walk out of it.
Attached a letter that is already translated in French by Malika (FOE France), and will be delivered by them to EDF, and what i would love to have as many signatures as possible. FOE France is trying to get the local NGO signatures,and I'm sending to all of you for also have your support.
If you agree in endorsing your organisation to this letter, please do send an email to me: anabela.ja.mz@gmail.com <mailto:anabela.ja.mz@gmail.com>, as soon as possible, deadline
Another great news: a banner challenging Mphanda Nkuwa produced by FoE EWNI in conjunction with JA and UK artists will be displayed at the V&A Museum in London from July 2014 until early-2015. See a photo of the banner here <http://ja4change.wordpress.com/2012/09/25/stop-damming-the-zambezi/>.
Thanks,
Anabela
Director of JA!
________________________________________________
You received this message as a subscriber on the list: africa@list.internationalrivers.org
To be removed from the list, please visit:
http://org.salsalabs.com/o/2486/unsubscribe.jsp
-------- Original Message --------
Subject: [foei-EJRN] please sign-on to demand EDF drops Mphanda Nkuwa dam
Date: Tue, 11 Mar 2014 10:13:00 +0200
From: Anabela Lemos <anabela.ja.mz@gmail.com>
To: Anabela Lemos <anabela.ja.mz@gmail.com>
Dear comrades,
As some of you know, JA has been fighting against the proposal Mphanda Nkuwa dam in the Zambezi river for well over 12 years. since the EIA was approved (2011) without even answering our questions and concerns, we have been following the energy-purchase agreements funding.
The reason this horrid project was not rejected, is Guebuza, the president of Mozambique´s own interest and involvement, using his power to push the project for his own benefit. The latest news was that the South African president Zuma and his son are also involved. see our blog on this topic here <http://ja4change.wordpress.com/2013/12/02/water-financialization-exposed-in-new-report-on-eve-of-wto-meeting-includes-critique-of-proposed-mphanda-nkuwa-dam-in-mozambique/>.
As such we discovered that EDF (Electricity of France), is interested in partly funding the project, so we hope to raise their awareness to such a risky project, and in doing so hopefully they will walk out of it.
Attached a letter that is already translated in French by Malika (FOE France), and will be delivered by them to EDF, and what i would love to have as many signatures as possible. FOE France is trying to get the local NGO signatures,and I'm sending to all of you for also have your support.
If you agree in endorsing your organisation to this letter, please do send an email to me: anabela.ja.mz@gmail.com <mailto:anabela.ja.mz@gmail.com>, as soon as possible, deadline
Another great news: a banner challenging Mphanda Nkuwa produced by FoE EWNI in conjunction with JA and UK artists will be displayed at the V&A Museum in London from July 2014 until early-2015. See a photo of the banner here <http://ja4change.wordpress.com/2012/09/25/stop-damming-the-zambezi/>.
Thanks,
Anabela
Director of JA!
________________________________________________
You received this message as a subscriber on the list: africa@list.internationalrivers.org
To be removed from the list, please visit:
http://org.salsalabs.com/o/2486/unsubscribe.jsp
Monday, March 10, 2014
Oxford study warns developing countries against dam projects
Oxford study warns developing countries against dam projects
Financial Times, March 10, 2014
By Pilita Clark in London
www.ft.com/intl/cms/s/0/effcd742-a82f-11e3-8ce1-00144feab7de.html#axzz2vZmiAYwZ
An ill-advised splurge on large dams across the developing world is
likely to saddle countries with big debts, according to Oxford
university researchers who have found such projects typically cost
nearly twice as much as first estimated and rarely finish on time.
The findings are based on a study of 245 dams built in 65 countries
since 1934, making it one of the most comprehensive analyses since a
wave of mega-dams began around seven years ago, ending a 20-year lull in
such works.
Such projects, including Brazil's Belo Monte dam in the Amazon and the
Gilgel Gibe III dam in Ethiopia, promise to boost renewable energy in
countries eager to increase their electricity supplies without burning
more fossil fuels.
However, they often arouse opposition because they can require thousands
to be uprooted from their homes and flood fragile ecosystems.
Anti-dam campaigners will be bolstered by the Oxford study, which found
large dam construction costs were on average more than 90 per cent
higher than initial budgets, while eight out of 10 suffered a schedule
over-run.
It concludes the Brazilian and Ethiopian dams, and similar ones in
Pakistan, Myanmar and elsewhere, are likely to face "large cost and
schedule overruns seriously undermining their economic viability".
The research authors include Professor Bent Flyvbjerg, a prominent
critic of the optimistic assumptions behind mega-projects such as the
Olympic Games and new railway infrastructure.
"Our paper should not be seen as being against hydropower," he said,
adding there were many good examples of smaller hydroelectric projects
in countries such as Norway and Portugal that made sound economic sense.
However, the financial and economic impact of huge dams in developing
countries can be dire, Prof Flyvbjerg said, and their social and
environmental effects are "often horrendous".
"Taken together, that means it does not make much sense to build them,"
he said.
The reason so many projects do proceed is that the experts who make
forecasts about them "can be usefully grouped into 'fools' or 'liars'",
he said, explaining fools were recklessly optimistic while liars
deliberately mislead to get projects going.
Part of the problem for developing countries is they often have to
borrow a lot for imported goods or services to build big dams, putting
pressure on public finances that can be exacerbated by sudden exchange
rate swings.
The Itaipu dam Brazil built in the 1970s suffered a 240 per cent cost
over-run that impaired the country's finances for three decades, said
Prof Flyvbjerg. Colombia's Chivor hydropower project endured a 32 per
cent cost over-run after the peso depreciated nearly 90 per cent against
the dollar.
Such risks are less of a problem in wealthier countries such as the US,
home of the Hoover dam that is often cited as a success story.
Dam proponents frequently argue they have learnt from past mistakes and
can avoid the financial problems that plagued older dams.
However, the Oxford study, published in the Energy Policy journal,
suggests the magnitude of cost overruns has not declined over time and
dam budgets today are as wrong as at any time during the 70 years for
which there is data.
"If leaders of emerging economies are truly interested in the welfare of
their citizens, they are better off laying grand visions of mega-dams
aside," said Atif Ansar, co-author of the study.
(The new study is available at
www.sciencedirect.com/science/article/pii/S0301421513010926. You will
find a review by International Rivers at http://bit.l/DamStudy.)
________________________________________________
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Financial Times, March 10, 2014
By Pilita Clark in London
www.ft.com/intl/cms/s/0/effcd742-a82f-11e3-8ce1-00144feab7de.html#axzz2vZmiAYwZ
An ill-advised splurge on large dams across the developing world is
likely to saddle countries with big debts, according to Oxford
university researchers who have found such projects typically cost
nearly twice as much as first estimated and rarely finish on time.
The findings are based on a study of 245 dams built in 65 countries
since 1934, making it one of the most comprehensive analyses since a
wave of mega-dams began around seven years ago, ending a 20-year lull in
such works.
Such projects, including Brazil's Belo Monte dam in the Amazon and the
Gilgel Gibe III dam in Ethiopia, promise to boost renewable energy in
countries eager to increase their electricity supplies without burning
more fossil fuels.
However, they often arouse opposition because they can require thousands
to be uprooted from their homes and flood fragile ecosystems.
Anti-dam campaigners will be bolstered by the Oxford study, which found
large dam construction costs were on average more than 90 per cent
higher than initial budgets, while eight out of 10 suffered a schedule
over-run.
It concludes the Brazilian and Ethiopian dams, and similar ones in
Pakistan, Myanmar and elsewhere, are likely to face "large cost and
schedule overruns seriously undermining their economic viability".
The research authors include Professor Bent Flyvbjerg, a prominent
critic of the optimistic assumptions behind mega-projects such as the
Olympic Games and new railway infrastructure.
"Our paper should not be seen as being against hydropower," he said,
adding there were many good examples of smaller hydroelectric projects
in countries such as Norway and Portugal that made sound economic sense.
However, the financial and economic impact of huge dams in developing
countries can be dire, Prof Flyvbjerg said, and their social and
environmental effects are "often horrendous".
"Taken together, that means it does not make much sense to build them,"
he said.
The reason so many projects do proceed is that the experts who make
forecasts about them "can be usefully grouped into 'fools' or 'liars'",
he said, explaining fools were recklessly optimistic while liars
deliberately mislead to get projects going.
Part of the problem for developing countries is they often have to
borrow a lot for imported goods or services to build big dams, putting
pressure on public finances that can be exacerbated by sudden exchange
rate swings.
The Itaipu dam Brazil built in the 1970s suffered a 240 per cent cost
over-run that impaired the country's finances for three decades, said
Prof Flyvbjerg. Colombia's Chivor hydropower project endured a 32 per
cent cost over-run after the peso depreciated nearly 90 per cent against
the dollar.
Such risks are less of a problem in wealthier countries such as the US,
home of the Hoover dam that is often cited as a success story.
Dam proponents frequently argue they have learnt from past mistakes and
can avoid the financial problems that plagued older dams.
However, the Oxford study, published in the Energy Policy journal,
suggests the magnitude of cost overruns has not declined over time and
dam budgets today are as wrong as at any time during the 70 years for
which there is data.
"If leaders of emerging economies are truly interested in the welfare of
their citizens, they are better off laying grand visions of mega-dams
aside," said Atif Ansar, co-author of the study.
(The new study is available at
www.sciencedirect.com/science/article/pii/S0301421513010926. You will
find a review by International Rivers at http://bit.l/DamStudy.)
________________________________________________
You received this message as a subscriber on the list: dams@list.internationalrivers.org
To be removed from the list, please visit:
http://org.salsalabs.com/o/2486/unsubscribe.jsp
Large Dams Are Uneconomic, Scientific Study Finds
(Sorry for cross-posting)
Large Dams Are Uneconomic, Scientific Study Finds
By Peter Bosshard
International Rivers, March 10, 2014
http://bit.ly/damstudy
"We find that even before accounting for negative impacts on human
society and environment, the actual construction costs of large dams are
too high to yield a positive return", a new report states. "Large dams
also take inordinately long periods of time to get built, making them
ineffective in resolving urgent energy crises." Simply put, dams don't
just destroy the environment and impoverish local communities. They also
don't make economic sense.
The new report was prepared by researchers from Oxford University and is
based on the most comprehensive economic analysis of large dams ever
undertaken. The peer-reviewed scientific study offers a devastating
verdict on the economics of large dams, and has important implications
for future energy sector planning.
Over four years, the authors of the new study - Atif Ansar, Bent
Flyvbjerg, Alexander Budzier and Daniel Lunn - analyzed all large dams
which were built between 1934 and 2007 and for which reliable costs and
schedule figures are available. Their database includes 245 projects in
65 countries with a total cost of $353 billion (in 2010 prices). The
findings of their analysis, which were published today, are stunning:
. Large dams suffered average cost overruns of 96%. The degree of cost
overruns tended to increase with the size of projects. Even without
considering social and environmental costs, large dams on average don't
make economic sense.
. Project implementation suffered an average delay of 44%. The
implementation schedule does not include the lengthy lead time required
to prepare projects.
Dam builders and financiers frequently acknowledge the problems of the
past, but claim that they have learned from their mistakes. The study by
the Oxford research team shows that this is not the case. Neither cost
nor schedule overruns have improved over time. "There is little learning
from past mistakes", the authors say. "By the same token, forecasts of
costs of dams being made today are likely to be as wrong as they were
between 1934 and 2007."
The World Bank and other development banks often argue that their
involvement improves the quality of risky projects. Again, the empirical
evidence does not confirm this. Atif Ansar told me in a personal
conversation that projects supported by multilateral development banks
"do not perform better in terms of cost overruns".
Both cost and schedule overruns affect projects in all world regions.
Poor countries tend to have higher delays, possibly because weak
government structures and economies don't support the construction of
complex large dams. Interestingly, projects in democratic countries also
tend to experience longer delays, possibly because elected politicians
use rosy forecasts to sell their projects.
The Oxford researchers conclude their evaluation with a series of
recommendations. They suggest that energy planners need to forecast
costs and schedules more realistically by integrating the empirical
evidence for similar projects. Based on their database, they suggest
that dam planners need to increase their cost estimates by 99% and their
construction schedules by 66% if they want to achieve an 80% certainty
that their projects are completed within budget and time.
The new paper illustrates what this means for the Diamer-Bhasha Dam in
Pakistan. With 80% certainty, the giant project on the Indus River can
be expected to cost $25.4 billion rather than $12.7 billion, and to be
completed in 2027 rather than 2021. Under these circumstances, the
project will not make economic sense. "Diamer-Bhasha Dam is a
non-starter in Pakistan", the authors comment. The same can be said for
the Inga dams on the Congo, the Belo Monte Dam in the Amazon, the
proposed dams on the Mekong mainstream and many other mega-projects.
The new research shows that energy projects that don't depend on complex
factors such as geology and streamflow and can be built quickly are
preferable to complex large dams. "Many smaller, more flexible projects
that can be built and go online quicker, and are more easily adapted to
social and environmental concerns, are preferable to high-risk dinosaur
projects like conventional mega-dams", concluded Bent Flyvbjerg, the
principal investigator, as the new paper was published. "If leaders of
emerging economies are truly interested in the welfare of their
citizens, they are better off laying grand visions of mega-dams aside",
his co-author Atif Ansar concurred.
Many actors have vested interests in building dams and may try to
disregard the findings of the new study. Disinterested government
officials and investors should take the facts and figures of the Oxford
study seriously. The empirical evidence demonstrates that even on
economic terms, large dams are usually not the best energy solution.
Peter Bosshard is the Policy Director of International Rivers. The new
study is available at
www.sciencedirect.com/science/article/pii/S0301421513010926.
________________________________________________
This is International Rivers' mailing list on the role of international financial institutions in promoting large dams.
You received this message as a subscriber on the list: ifi@list.internationalrivers.org
To be removed from the list, please visit:
http://org.salsalabs.com/o/2486/unsubscribe.jsp
Large Dams Are Uneconomic, Scientific Study Finds
By Peter Bosshard
International Rivers, March 10, 2014
http://bit.ly/damstudy
"We find that even before accounting for negative impacts on human
society and environment, the actual construction costs of large dams are
too high to yield a positive return", a new report states. "Large dams
also take inordinately long periods of time to get built, making them
ineffective in resolving urgent energy crises." Simply put, dams don't
just destroy the environment and impoverish local communities. They also
don't make economic sense.
The new report was prepared by researchers from Oxford University and is
based on the most comprehensive economic analysis of large dams ever
undertaken. The peer-reviewed scientific study offers a devastating
verdict on the economics of large dams, and has important implications
for future energy sector planning.
Over four years, the authors of the new study - Atif Ansar, Bent
Flyvbjerg, Alexander Budzier and Daniel Lunn - analyzed all large dams
which were built between 1934 and 2007 and for which reliable costs and
schedule figures are available. Their database includes 245 projects in
65 countries with a total cost of $353 billion (in 2010 prices). The
findings of their analysis, which were published today, are stunning:
. Large dams suffered average cost overruns of 96%. The degree of cost
overruns tended to increase with the size of projects. Even without
considering social and environmental costs, large dams on average don't
make economic sense.
. Project implementation suffered an average delay of 44%. The
implementation schedule does not include the lengthy lead time required
to prepare projects.
Dam builders and financiers frequently acknowledge the problems of the
past, but claim that they have learned from their mistakes. The study by
the Oxford research team shows that this is not the case. Neither cost
nor schedule overruns have improved over time. "There is little learning
from past mistakes", the authors say. "By the same token, forecasts of
costs of dams being made today are likely to be as wrong as they were
between 1934 and 2007."
The World Bank and other development banks often argue that their
involvement improves the quality of risky projects. Again, the empirical
evidence does not confirm this. Atif Ansar told me in a personal
conversation that projects supported by multilateral development banks
"do not perform better in terms of cost overruns".
Both cost and schedule overruns affect projects in all world regions.
Poor countries tend to have higher delays, possibly because weak
government structures and economies don't support the construction of
complex large dams. Interestingly, projects in democratic countries also
tend to experience longer delays, possibly because elected politicians
use rosy forecasts to sell their projects.
The Oxford researchers conclude their evaluation with a series of
recommendations. They suggest that energy planners need to forecast
costs and schedules more realistically by integrating the empirical
evidence for similar projects. Based on their database, they suggest
that dam planners need to increase their cost estimates by 99% and their
construction schedules by 66% if they want to achieve an 80% certainty
that their projects are completed within budget and time.
The new paper illustrates what this means for the Diamer-Bhasha Dam in
Pakistan. With 80% certainty, the giant project on the Indus River can
be expected to cost $25.4 billion rather than $12.7 billion, and to be
completed in 2027 rather than 2021. Under these circumstances, the
project will not make economic sense. "Diamer-Bhasha Dam is a
non-starter in Pakistan", the authors comment. The same can be said for
the Inga dams on the Congo, the Belo Monte Dam in the Amazon, the
proposed dams on the Mekong mainstream and many other mega-projects.
The new research shows that energy projects that don't depend on complex
factors such as geology and streamflow and can be built quickly are
preferable to complex large dams. "Many smaller, more flexible projects
that can be built and go online quicker, and are more easily adapted to
social and environmental concerns, are preferable to high-risk dinosaur
projects like conventional mega-dams", concluded Bent Flyvbjerg, the
principal investigator, as the new paper was published. "If leaders of
emerging economies are truly interested in the welfare of their
citizens, they are better off laying grand visions of mega-dams aside",
his co-author Atif Ansar concurred.
Many actors have vested interests in building dams and may try to
disregard the findings of the new study. Disinterested government
officials and investors should take the facts and figures of the Oxford
study seriously. The empirical evidence demonstrates that even on
economic terms, large dams are usually not the best energy solution.
Peter Bosshard is the Policy Director of International Rivers. The new
study is available at
www.sciencedirect.com/science/article/pii/S0301421513010926.
________________________________________________
This is International Rivers' mailing list on the role of international financial institutions in promoting large dams.
You received this message as a subscriber on the list: ifi@list.internationalrivers.org
To be removed from the list, please visit:
http://org.salsalabs.com/o/2486/unsubscribe.jsp
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