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Sida puts up SEK 5.5m to handle negative impacts of Song Hinh Dam http://www.development-today.com/ - 12 February 2001 Sida puts up SEK 5.5m to handle negative impacts of Song Hinh DamThe Swedish International Development Cooperation Agency (Sida) has allocated SEK 5.5 million to finance an environment programme for the Swedish-financed Song Hinh Dam in Central Vietnam. The consultants that carry out this project are expected to use the recommendations of the World Commission on Dams (WCD) as a basis for their work. Anders Hagwall of Sida is “generally very impressed” with the WCD report and says it “can serve as a guideline” for future dam building. As for the WCD’s proposal for donors to share responsibility for paying reparations to people negatively affected by dams, however, Sida has no position. Sida will review the effects of two Swedish-financed dams this year. The draft terms of reference for a review of the social impacts of the Pangani Dam built in Tanzania in the early 1990s are currently with the national utility, Tanesco. (See DT 23-24/00) Consultants that worked on the design and construction of Pangani will not be eligible to bid for this review. It has not yet been decided whether the tender will be tied. The other project to be reviewed is the 70-megawatt Song Hinh Dam, built across the Hinh river in Vietnam’s Phu Yen province, which began operating at the end of 2000. It reportedly floods a 40 square kilometre area and irrigates another 61 square kilometres. An environmental impact assessment of the project identified a number of negative impacts, including resettlement of some 1,500 persons, loss of forest and farmland, environment and ecological effects due to the construction of the dam and changes in the hydrological regime such as degradation of water quality and erosion. “During nine months of the dry season, the quantity of water downstream of the main dam is strongly reduced because it is kept in the reservoir,” it notes. The Sida grant is designed in part to address these problems. While this contract is untied, firms that have been involved in previous phases of the project are eligible to bid, according to Anders Arvidson, Project Manager for Vietnam at Sida’s Infrastructure and Economic Cooperation Department (INEC). The total project cost was USD 144 million - USD 88 million covered by Vietnam, USD 15 million by the Nordic Investment Bank, USD 8.7 million by the Nordic Development Fund and USD 31 million (SEK 213 million or 21 per cent) by Sida. The latter was a concessionary credit, covering electro-mechanical equipment, contracted to a Nordic consortsium that included ABB, Kvaerner Turbin, Kvaerner Energy, SWECO and Norconsult. In addition, Sida provided a grant of SEK 38 million for the emergency spillway and technical assistance supplied by Norplan. The EIA was also reviewed twice, first by Jaakko Pöyry and then by Conec. The aim of the current project is to assist the national utility, Electricty of Vietnam (EVN), to conduct environmental monitoring and management activities at Song Hinh, to comply with Vietnamese environmental law and to operate the dam in a “sustainable manner, thereby, reducing negative environmental and socio-economic impacts”. Late last year, Sida also added compliance with WCD guidelines and recommendations to the bidding documents. Arvidson explains that the terms of reference for the project were originally drawn up prior to the completion of WCD’s report. (See DT 20/00) WCD guidelines are intended to eliminate damaging projects before they begin, and include measures such as environmental flow requirements to sustain aquatic ecosystems and procedures for assessing claims of aggrieved parties and providing compensation. Arvidson notes that Sida is shifting focus away from large dams, transmission lines and electricity generation to rural electrification. He is in fact on six-month leave from the Stockholm Environment Institute to develop Sida’s work in the areas of management and financing of smaller-scale rural energy alternatives. “The thinking has been that [large energy projects] lead to economic growth which, in turn, leads to poverty eleviation. Increasingly, Sida is moving toward targeting the poor directly through local companies providing energy services and away from the monopoly utilities,” Arvidson says. According to Anders Hagwall who is in charge of infrastructure projects at INEC, there are no new dam projects in Sida’s pipeline with the exception of the Bujagali hydro project in Uganda. Sida is considering it, but has expressed scepticism. (See DT 23-24/00) Hagwall says the WCD’s recommendations are very much in line with Sida’s energy and environment policies. Sida has not formally decided to adopt the guidelines for dam building proposed by WCD, but Hagwall is positive and finds them to be “reasonably well balanced”. The final WCD report specifies that the responsibility for compensation to people harmed by past and future dams rests with governments, donors, financiers and builders. But this issue has not been discussed by Sida. Hagwall says that if Sida were to fund a new dam, “we’d make sure that compensation is implemented”. But he insists that in general “reparations are mainly the responsibility of the countries themselves.”
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