Nam Theun 2 Trip Report and Project Update - BankTrack

International Rivers NetworkNTPC says that there are opportunities for a donorfundeddevelopment scheme to consider flood protectionand irrigation systems for Xe Bang Fai villages.The GoL has reportedly expressed an interest in abroader Xe Bang Fai program and donors such as theWorld Bank and the ADB are evaluating variousoptions. The question remains, however, how muchflood protection and livelihood restoration should beNTPC’s direct responsibility to compensate for andmitigate NT2’s impacts.Time running short for downstream programThe Downstream Livelihood and Asset RestorationProgram for the Xe Bang Fai is still being piloted inless than 10% of the affected villages with two yearsleft until commercial operations begin, with all thefisheries losses, flooding, erosion, and water qualityproblems that will accompany power production.NTPC’s aim is to scale up the programs to all 221affected villages before impacts from Nam Theun 2 arefelt in 2008 or 2009. 11The Xe Bang Fai near Mahaxai Tai.Photo by Henrik Lindholm, SwedWatch.Instead, NTPC is proposing small-scale irrigation tubewells shared by groups of families, presumably for dryseasonvegetable production. The company plans toinstall approximately 175 to 200 tube wells by the endof 2009 in all riparian villages and some hinterlandsvillages. As the Downstream Program plan has notbeen disclosed, it is unclear how many families willshare these systems, how they will be managed, and ifthe number of tube wells is sufficient. NTPC has notprovided any information regarding how the waterwould be pumped from the wells to the farmers’ fields,and whether or not this would entail additional electricitycosts.Although NTPC has not disclosed an implementationplan for the Downstream Program, the time remainingbefore NT2 operation seems to be extremely short tolearn from the pilot projects, fix problems or introducenew approaches, and replicate initiatives in more than200 villages. As the Panel of Experts notes in itsFebruary 2007 report, “Where there are delays [indownstream program implementation], an undesirablegap will emerge between impacts and mitigation/compensation.Such delays seem likely at this point” (PoE,11th Report, p. 21).The uptake of new and untested livelihood systems toreplace traditional fishing and farming activities is along-term venture. As noted above, there are a numberof shortcomings with the livelihood projects and moretime should have been allocated to learn from thesepilots before scaling them up across hundreds of villages.NTPC should provide interim compensation todownstream villagers until livelihood projects restoretheir incomes to pre-NT2 levels.Inadequate budget to mitigate and compensatefor downstream impactsNTPC has committed to providing $16 million toimplement the downstream program over eight years15