Dams in Distress

By halting construction of the Bakun Dam, one of the world's most potentially wasteful undertakings, the government of Malaysia has handed a victory to the worldwide movement against big hydroelectric projects.Caving into growing criticism that the dam was uneconomical, Malaysia indefinitely delayed the $5.5 billion project in early September. The government had planned to build the Bakun Dam over the next few years in the heart of a rainforest on Malaysia's part of the island of Borneo. It would have been the largest dam in Southeast Asia, flooding an area larger than Singapore. The electricity was to be sent to more populous western Malaysia via an underwater power cable hundreds of miles longer than has ever been built before. Given the length of the cable, as much as 40 percent of the electricity could be lost in the journey. Meanwhile, nearly 10,000 indigenous people are being forced to move because of the project.The government tried to save face by blaming an expected rise in the dam's cost because of the Southeast Asian currency crisis that has led to a 20 percent decline in the value of the Malaysian ringgit since early July. The government has vowed to resume the project, perhaps two years hence, but foreign observers say this isn't likely. "Given all the problems Bakun has run into, it will become more and more difficult for the Malaysians to build it," says Peter Bosshard, secretary of the Berne Declaration, a Swiss advocacy group that has monitored the project.Even before the fall in Malaysia's currency, Bakun's backers-a local corporation with close ties to the Malaysian government-had repeatedly failed to attract foreign investment and even fired the Swiss contractor, Asea Brown Boveri (ABB), that it had hired to oversee construction. ABB, one of a handful of multinational corporations capable of pulling together a mammoth hydroelectric project, had come under intense pressure from European environmentalists to withdraw from Bakun. The company lost the prime contract when it refused to take financial responsibility for subcontracts beyond its control. ABB considered these subcontracts, which were managed by cronies of the Malaysian government, to be potential conduits for bribes to Malaysia's leading political party, UMNO.The Bakun delay is a setback for proponents of big dams worldwide. Once icons of progress, big dams now symbolize waste, inefficiency and corruption. This is quite a turnabout. In the United States during the '30s and '40s, big dams were embraced by progressives for bringing cheap power to the masses. Woody Guthrie, the legendary folksinger, sang paeans to the Grand Coulee, the nation's biggest power-producing dam, built on the mighty Columbia River from 1933 to 1942. The Tennessee Valley Authority (TVA), which oversaw a vast network of hydroelectric power and flood-prevention measures in the impoverished South, became a model New Deal program. One 1934 study called the TVA the greatest experiment in regional planning outside Soviet Russia.Attitudes toward dams changed dramatically in the '60s and '70s. Rather than cheer sources of electricity that reduced dependence on fossil fuels or nuclear power, environmentalists emphasized the vast physical destruction from dams and the recreational and spiritual benefits of unbroken rivers. Novelist Edward Abbey galvanized anti-dam sentiment with his 1975 novel The Monkey-Wrench Gang, in which members of a radical environmental group conspire to blow up a big dam.By the '90s, anti-dam feelings in the United States were pervasive. Even Daniel P. Beard, the commissioner of the Bureau of Reclamation, a longtime champion of dams, declared in 1994 that "the dam-building era in the United States is now over."Not only are no new big dams planned for the United States (which has 75,000 dams of all sizes), but opponents are pressing the government to do away with existing dams. In what would be a major precedent, environmentalists seek to decommission the Glen Canyon Dam in northern Arizona and drain its 250-square-mile lake in an attempt to restore the canyon to a more natural state. The project would cost hundreds of millions of dollars and destroy a popular recreation spot. While opposition to the Sierra Club-backed plan is widespread, lawmakers held a hearing on September 23 to consider the possibility.Despite the swing against dams in the industrialized North, the Southern Hemisphere is on the verge of going dam crazy. Developing countries, especially those without their own oil resources, desperately want cheap power, and they look at hydroelectricity as a gift horse. Dozens of mega-dams are planned for the most rapidly growing parts of Asia and Latin America. The biggest of these dams are traditionally funded by a combination of government and international donors.China has embarked on the largest dam in history, Three Gorges Dam, which calls for damming the Yangtze river with a structure 607 feet high and more than a mile wide that will create a reservoir 370 miles long. The mammoth dam, which is scheduled for completion 12 years from now, promises to halt devastating floods that have claimed upwards of 300,000 lives this century and to generate the equivalent output of 18 nuclear power plants.While the leaders of developing countries extol the virtues of big dams, critics in the industrialized world say that the long-term costs associated with these projects are being ignored. Deborah Moore, a senior scientist at the Environmental Defense Fund, says that an examination of dams built since the '50s shows "a pattern overestimating economic returns and underestimating environmental and social costs." She adds that dams uproot native people, widen the gap between rich and poor in developing countries by steering power to cities at the expense of rural land, and provide opportunities for massive corruption.The Three Gorges Dam, for instance, will displace nearly two million people, and costs could run as high as $75 billion, according to Western analysts. The dam may well be an environmental time-bomb as well. Environmentalists say it will ruin scenic areas, threaten wildlife and trigger landslides and tidal waves because of fluctuating water levels.In the '90s, activists in the United States and Europe have forced international aid agencies to reconsider their support for many dam projects, citing the adverse effects on local people and land. While these agencies still supply or guarantee billions of dollars for dam projects, they have made some notable concessions to critics. The U.S. Export-Import Bank last year snubbed China by refusing to guarantee contracts awarded to American companies that seek to supply the Three Gorges project. Germany effectively killed Nepal's plans for another dam when it withdrew promised financing in 1995.Trying to prove that these projects are viable without funds guaranteed by individual governments or international lenders, dam builders have turned to private investors for capital. It is unclear, however, whether the market will grow more comfortable with the risks inherent in big dam projects. If Bakun's collapse is an indication, the answer is no. "This was the most audacious effort ever to privately finance a dam," says Patrick McCully, campaigns director of the International Rivers Network, a dam-industry critic in Berkeley, Calif. "This failure is a massive blow to the dam industry."There is ample evidence that the project was a boondoggle in the making. Some local critics challenged government cost estimates, arguing that the price could double to more than $10 billion. Activists in the Malaysian state of Sarawak, where the dam site is located, were angry that power from the dam would largely be diverted off their island and that the native peoples, who make up more than one-third of the state's population, would receive scant benefits from the development.The government's resettlement scheme also drew criticism. "They are putting people into an area where other farmers and hunters already live," says Harrison Gnau, a member of the Kayan tribe and an activist in Miri, Malaysia.The government has yet to give even the modest cash payments that it promised to the 10,000 residents displaced by preparations for the dam's constructions. Some indigenous people now wonder whether they will ever receive their money. According to recent reports in the Sarawak Tribune, a daily newspaper, some of those displaced by the project are considering legal action. A lawsuit would be an unusual sign of defiance in Malaysia, where dissent is muted by custom and law.Many Malaysians, however, still support the dam, despite the risks and the inevitable damage to the environment. Malaysia's cities, especially the high- tech center of Penang and the capital of Kuala Lumpur, need more electricity to keep pace with rising living standards.The idea of the dam also holds an almost romantic appeal to many Malaysians, who are angry over what they see as unfair attacks on their country by Westerners. "You have dammed your rivers, so many that there aren't any left to dam, and now you tell us we can't dam ours," says James Ritchie, a Sarawak journalist who has written a book about Bakun and its effects. "That's hypocritical."By building Bakun, Ritchie says, Malaysia has a better chance to strike a balance between "the forces of development and conservation." He envisions the dam as the linchpin in "a grand bargain" that would leave vast areas of Malaysia's rainforest off limits to all but what he calls "eco-tourists" and the native peoples sustained by traditional ways of life. "But to carry this off," he says, "we need power, we need development."While this argument serves the interests of Malaysia's elite, the real challenge for the developing world isn't whether to shun dams or accept mammoth ones, but to select dams that support rural lifestyles while helping to ease power shortages in burgeoning cities. "There are many viable alternatives to get electricity, such as a series of smaller dams," says Gnau, who believes more modest projects could provide power without threatening the very existence of native villages.Given the extraordinary shift in attitudes toward dams, activists think the time is ripe for an international commission to monitor them. In late September, a consortium of activists and aid agencies met in Washington to organize a World Commission on Dams, naming the water resource minister of South Africa, Kader Asmal, as chairman.The goal of the commission is to issue a set of environmental, economic and social standards for big dams that would have some binding authority over international donors such as the World Bank. It will also look at the issue of reparations for people harmed by already completed dams."We're cautiously optimistic," says the International Rivers Network's McCully, an organizer of the commission. But he and others worry that the commission, like much else in the politics of dams, will come under the sway of big money. nG. Pascal Zachary writes frequently about labor, economics and technology. He is the author of a new book, Endless Frontier: Vannevar Bush, Engineer of The American Century (The Free Press).


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