The latest move indicates growing, if belated, concern around the environmental and economic viability of damming the Mekong River.
On 15 January, a Chinese contractor for the planned Sanakham Dam in Laos submitted a revised technical report to the Thai National Mekong River Committee, in the hopes of reducing concerns surrounding the controversial project. According to reports, Thailand did not accept the revisions, claiming that the new report was still not sufficient and that more study is required.
Thailand has consistently raised concerns over the environmental effects of the dam, which it worries will change the flow of the Mekong. Thailand has already threatened to refuse to purchase power generated by the dam, claiming it may not sign a power purchasing agreement. Thailand has historically been Laos’s biggest purchaser of hydroelectricity exports, though its electricity needs have dropped due to an ongoing economic slump.
Thailand’s wariness over new upstream dams suggests that the country is increasingly uneasy about the issues that have stemmed from large hydropower projects along the Mekong. Water levels in the river hit record lows last year (for the second consecutive year), mostly due to upstream hydropower dams (largely in China, but also in Laos).
Extensive damming has become a significant source of anxiety for downstream communities; in November 2019, water levels fell so low that irrigation pumps were unable to draw water, forcing the Thai Government to send the army to conduct relief efforts. Fishers living along the Mekong in northern Thailand have also seen an unprecedented drop in catches, leaving many without a viable livelihood. Dam-related activity has caused water levels to fall in the monsoon, when they should be at their highest, but has also caused an increase in flash floods along the Lao-Thai border during the dry season.
As the economic cost of dam-related activity continues to rise for downstream countries, Thailand, with its long history of lax environmental regulation and enforcement, appears to have finally taken notice. In January 2020, Thailand filed a complaint with the Mekong River Commission, about China’s Mekong dams, after documenting community complaints about economic hardships suffered as a result of changes to river flows. A month later, the Thai Government announced it was abandoning a China-led initiative to dredge the Mekong.
Laos, meanwhile, has engaged in a dam-building spree in recent years, as it attempts to become the “battery” of South-East Asia. The country has built more than 50 dams in 15 years and another 50 are currently under construction. While the country hopes to boost its economy by exporting power, the viability of the plan is questionable. Thailand is unable to buy as much power as it had in the past due to its economic misfortune and other countries, such as Australia, could become increasingly competitive energy suppliers as cleaner sources of energy become cheaper. Nor has hydropower been especially lucrative for the Laotian Government. While exact figures are not public, the World Bank has revealed that the earnings and royalties received by the Laotian authorities as returns from the hydropower projects are considerably less than expected. It will be 20 to 30 years before Laos is given control of its dams, under existing contracts (the dams are owned by foreign firms until then). Laos has continued to finance hydropower projects even as its own national debt continues to balloon – in late 2020, the country was forced to cede control of its national electricity grid to China as a result of unmanageable debt.
With its biggest customer increasingly alarmed by the impacts of large-scale hydropower and the viability of building dams becoming poorer and poorer, it is uncertain why Laos has clung to its hydropower ambitions quite so stubbornly. Despite that, there seems to be no end in sight to the country’s dam building activities, despite the detriment to itself, its neighbours and the Mekong River.