Nam Theun 2 Trip Report and Project Update - BankTrack

International Rivers NetworkBiomass Clearance and Water Quality■ Failure to clear biomass from the reservoir area will resultin water quality problems and fish kills in the reservoirand downstream. The Concession Agreement requires thata biomass survey be conducted and used to propose meansfor “maximising removal of biomass in high biomass areasof the Nakai Reservoir. The priority shall be to clear thevegetation in areas which will be permanently flooded”(Schedule 4, Part 2, Section 3a). The ConcessionAgreement also requires that “... water in the DownstreamChannel must at least be suitable for irrigation purposes”(Schedule 4, Part 2, Section 9.1f ).Recommendations:■ NTPC and the GoL should commit toclear biomass from at least all permanentlyflooded areas of the NT2reservoir.■ NTPC and the GoL should implement anindependently reviewed clearance planand impoundment strategy to minimizedownstream water quality problems inthe first years of NT2 operations.■ Despite these commitments, approved by the World Bank,the ADB and NT2’s other funders, neither the GoL norNTPC have plans to remove or ensure the maximum removal of biomass from the reservoir. NTPC is onlynow conducting a study on water quality optimization during reservoir impoundment and says that “biomassclearance may be part of the answer.”Project (Construction) Lands Compensation■ Compensation payments to Project Lands villagers havebeen unequal and insufficient, failing to compensate forthe full production value of land, fisheries losses and waterquality problems caused by project construction. Many villagersdo not understand what they are entitled to, whythey have received what they have, and if they will bereceiving more in the future. Compensation paymentsstarted a year after villagers’ land was taken and impactswere first felt, in violation of the Concession Agreementand World Bank policy.■ Resettlement Action Plans for Project Lands have notbeen disclosed, nearly two years after villagers lost landand assets, in violation of World Bank and ADB policies.Recommendations:■ The Independent Monitoring Agencyfor the Resettlement ManagementUnit (RMU) should urgently undertakea comprehensive review of ProjectLands compensation and mitigationmeasures and publicly disclose itsfindings.■ NTPC and the GoL should: 1) urgentlyfind comparable replacement land forProject Lands villagers, and 2) detailthe livelihood restoration options thatwill replace irrigation for significantlyaffected Project Lands villagers.5