Nam Theun 2 Trip Report and Project Update - BankTrack

Nam Theun 2 Trip Report and Project UpdateDetailed Concerns and RecommendationsXe Bang Fai Downstream Program■ Implementation of NTPC’s Downstream Livelihood and Asset Restoration Pilot Program has only recentlybeen initiated in 21 villages, which constitutes less than 10% of the downstream villages that will be affectedwhen NT2 operations begin in 2009.■ The Downstream Program plan has not been disclosed to the public, despite World Bank and ADB policyrequirements.■ NTPC says it is planning for the worst-case scenarioalong the Xe Bang Fai, which means 85% fish losses,increased high frequency floods, erosion, major waterquality problems, and transportation difficulties fordownstream villages. However, the DownstreamProgram budget is only $16 million, of which more than$1 million will be spent on consultants. 3 Using NTPC’sfigure of 75,000 affected people (versus the 120,000affected people identified by independent experts 4 ), only$200 per person is available to compensate and mitigatefor all these long-term livelihood impacts. Villagers toldIRN that their main priorities were flood protection andirrigation, but NTPC has reportedly told villagers thereis not enough money for these measures.■ The primary livelihood restoration pilot projects—livestockraising, fish ponds and cash crops using a microcreditvillage savings fund, as well as water and sanitationimprovements—are inadequate to deal with thescale of impacts that villagers will face. Some peoplewere having trouble selling their vegetables, the pigsthey purchased had died, and they couldn’t pay backtheir loans to the village savings fund. The reliance onthe micro-credit scheme to deliver compensation createsa cycle of debt if projects fail.Recommendations:■ NTPC should commit to develop andimplement an interim compensationscheme to address the impacts of NT2operations on downstream villagersuntil livelihood restoration programsyield sustainable results. Additionalfunding will be required, as the $16million budget is likely to be inadequateto deal with the scale of anticipateddownstream impacts.■ The GoL, World Bank and ADB shouldwork with villagers and donor partnersto develop an integrated rural developmentplan for the Xe Bang Fai region.■ NTPC, the GoL, the World Bank and theADB should ensure disclosure of: 1) theDownstream Livelihood and AssetRestoration Program Phase 1 in itsentirety; 2) marketing surveys for theXe Bang Fai; 3) biomass clearance plansand for the Nakai Plateau; and 4)hydraulics and water quality studies forthe downstream areas.4