Views divided on whether hydropower dams economically benefit local communities

Dams: An online petition to have at least one of Bhutan’s major river systems, the Chamkharchu, without a dam has sparked a public debate on the economic impact of dams.

The dam in question is to be located in upper Kheng in Zhemgang. Proponents say that the people of area, which is one of the most impoverished in Bhutan, will benefit economically. Those against it say that such projects do not benefit local communities and point to the Punatshangchu projects as an example.

Created by environmentalist, Yeshey Dorji, the petition calls for the Chamkharchu to remain dam free indefinitely so that at least one free-flowing river system can be handed down to future generations.

However, Bardo Trong member of parliament (MP) Lekey Dorji, who initiated the debate, argues that the people of upper Kheng risked remaining impoverished indefinitely if the construction of a dam is obstructed. The dam is expected to benefit five gewogs with a total population of around 28,000, according to the MP.

He said that some of the remotest villages in the country, without road access, electricity, or even basic amenities are located in the area. According to the MP, road access would become possible only if a dam is built there.

“While some propose that Kheng should embrace handicrafts, organic farming or eco-tourism, I am convinced that no other economic plan or package would provide any comprehensive road access to these poor villages and we know that nothing would happen without roads,” he said. “Yes, knowing how things are done in our country, implementing Chamkharchu (project) is the fastest and the most practical way to provide the basic ingredients for economic development for Upper Kheng.”

But, Yeshey Dorji, who is also from Kheng, says local communities are not likely to reap any significant economic benefits. He pointed that it is usually the big businesses that benefit from such hydropower projects but that in Bhutan, even those do not.

He pointed out that the government had encouraged locals to invest in industries to supply the Punatshangchu projects seven years ago. Today, he said, many of these industries had or were failing because the projects were not catering these industries or presenting them with unfavourable and inequitable terms.

For instance, he said that three of those mines are bankrupt, their owners in debt, a fourth mine has been taken over by the government and handed over to be run by the project, and steel mills had closed shop, among others, because raw materials were being imported from India. He said even vegetables were brought from India rather than buying them from Bhutanese.

He said truckers had to accept bad rates as they were fully dependent on the business handed out by the projects. The project has also constructed its own housing complex, which besides driving the cost of the project has taken away tenants from the local community.

He also questioned the long-term impact on local communities. Despite Chukha having two hydropower dams, being a major trading hub, and hosting the Pasakha industrial estate, Yeshey Dorji said that official records show that poverty is still a major issue for its communities. “In fact, two of its gewogs have more than 50 percent of their population living in abject poverty,” he has written on his blog.

While MP Lekey Dorji agreed that the argument that local communities have not benefitted is valid, he said mistakes could be avoided or corrected. “There are certainly many things that we need to improve in terms of benefiting the local communities and greater project accountabilities, but we should not stop the project itself.” He also pointed out if the local communities are not adequately benefitted, the petitioners should petition to get them benefits.

The MP pointed out that unlike the Punatshangchu projects, Chamkharchu is a joint venture on a 70 percent debt and 30 percent equity model, with 15 percent of the equity being grant. “While a sovereign guarantee for loan constitutes as national debt, it is self-liquidating and there is a huge market for power just across the border,” he said. “Not doing the project or delaying the project is an economic opportunity lost for a nation that needs revenue sources,” he added. “A big market across the border, a public company investing in the project and even our own equity paid by the Government of India, what better option can we get.”

On his blog, Yeshey Dorji disputes this as well. He points out that the cost overrun of the Punatshangchu projects have crossed 400 percent of initial estimates, while the selling rate has remained the same, the national debt burden has exceeded the country’s annual GDP, which means many future generations of Bhutanese will remain indebted.

Another reason why Yeshey Dorji would like to see no dam on the Chamkharchu is the rising value of clean water. “It is going to be the most important resource ever, it’s going to beat oil, and there’ll be wars fought over it,” he said. He pointed out that there is potential for Bhutan, one day, to export clean water to countries like India and Bangladesh, where water scarcity and pollution are already pressing issues.

“Today, we still have a chance of saving this river,” Yeshey Dorji said, adding that even if money has been spent on the detailed project report, it should not matter because Bhutan will be losing over Nu 100 billion by the time the Punatsangchu projects are completed.

MP Lekey Dorji hoped this paper would not take away the people of Kheng’s hopes and dreams. “Let us not dismantle the bridge fearing its use by a thief,” he said. “This is doom versus hope.”

Gyalsten K Dorji