The saddle dam on Xe Namnoy river in Attapeu province in southern Laos collapsed, releasing an immense volume of water of over 500 million cubic meters or nearly half of the dam capacity into the Xe Pian river basin and downstream to the Sekong river basin. Several thousands of Laotian residents are left to struggle after the incident. Many eyes are now laid on the companies involved in the hydropower dam investment, including Thai commercial banks providing loans to the project, consultancy firms, and EGAT as the electricity buyer and an indirect shareholder of the dam (via Ratchaburi Holding PCL). Below I will explain how they are involved in this chain of accountability.
Starting with the consultancy firm who conducted the assessment study and dam design. The dam collapse reflects the error of the consultant’s forecast on precipitation. Whether the calculation was based on 100-year storm 1,000-year storm or 10,000-year storm, the company could not even tell if this year’s precipitation (the first year before the dam goes on full operation) is a 100-year storm 1,000-year storm or 10,000-year storm. It can only say the situation is “beyond our forecast.”
The next chain lies on the 4 Thai commercial banks that provide loans of approximately 700 million USD to the project. Normally, banks ought to evaluate a project in all aspects. In reality, the most important issues for the bank to consider are the capacity of the borrower to repay the money and interests and the risks of not being able to finish the project. The bank may choose to excuse itself from this chain of accountability by stating that it is not an expert in engineering or environmental impacts while passing on future risks and accountability for the project to others.
The next chain is related to the company responsible for the construction and engineering works. Based on the business structure of Xe-Pian Xe-Namnoy Power Co., Ltd., it is Ratchaburi Holding PCL (RATCH). RATCH has also contracted a consultancy firm to co-manage the project. I don’t know how RATCH, as the main engineering company, will deny its accountability to the dam failure.
South Korea’s SKEC is the next chain, as the contractor who needs to ensure that the construction and equipment are arranged and completed according to plan.
Xe Pian-Xe Namnoy Power Company, a joint venture formed by 4 companies, holds accountable for the project as the main project owner. How will Xe Pian-Xe Namnoy Power Company show its accountability to the inspection of the dam project, starting from the design, construction, management and warning system? How will the company be accountable for the thousands of Laotian who are affected by this dam failure?
This chain of accountability holds together the accountability of many organizations, government agencies, and financial institutions. I want to see this chain broken.
I want to see the banks show they are accountable for the dam failure by, for example, extending the repayment duration or creating a fund from the loan interests to help the affected people.
I want to see the companies do their best to show they are accountable for the dam failure by providing their human resources and machinery to support the affected people in a timely manner. This should be prioritized over repairing and building a new dam solely to complete the project in time to generate electricity for EGAT.
I want to see EGAT extends the power purchase duration to give more time to help the affected people in Laos. This is definitely possible because there is already more than enough electricity in the system.
I want to see the Stock Exchange of Thailand (SET) maintains a mechanism that dictates investors to value morality and generosity to our brothers and sisters in Laos who are suffering, not just the values of the stocks in the market.
I want to see the Lao government allows independent mechanisms to inspect the issue thoroughly. Until any conclusion is formed and downstream community regains confidence in the dam project, the dam and all construction should be halted temporarily. There is no need to become the Battery of Asia if you are using the tears of the Lao people to fill up this battery.
I cannot imagine everything that I want to see after this tragedy. I think what I have written is already more than enough. The most I could do now is to send my best regards to our brothers and sisters in Laos to stay strong until this critical moment passes.
The Mekong Butterfly