Chinese-funded hydro-dams bring hope and fear to Cambodia

PHNOM PENH (AFP) — Hydropower is held up as the beacon of hope for millions of electricity-starved Cambodians, with ten planned hydro-dams set to power up their homes for the first time.

But flicking the switch comes at a price as critics say the controversial deals made with mostly Chinese companies to build the dams will create further hardship for Cambodia's poor and ruin the environment.

For window-maker Dorn Seanghor, however, the prospect of working without being plunged into darkness is appealing. In the midst of Cambodia's building boom his business should be thriving, but he is constantly frustrated.

"There's usually a blackout for six to eight hours almost every day -- one time in the morning and again in the evening," he said at his shop in the capital, Phnom Penh.

"It disturbs my business. I use a generator when the power is cut, but the price of gasoline is very high now."

Still, Dorn Seanghor is one of the luckier ones. Four-fifths of Cambodians do not have access to any electricity.

Ten dams are set to begin churning between 2010 and 2019, and once they are all operational the government says they will generate 2,045 megawatts of power, serving all Cambodia's provinces.

Government officials say six of the dams will be funded by Chinese companies, but the US-based International Rivers Network warned in a January report that these Chinese investments could threaten some of Cambodia's most precious eco-systems.

"Poorly conceived hydropower development could irreparably damage (natural) resources," the report warned.

Groups have been particularly concerned about the looming affects of Kamchay Dam, under construction by Sinohydro Corporation in Bokor National Park and expected to flood 2,000 hectares (4,942 acres) of protected forest.

And now environmental groups say two more projects agreed in mid-June at a cost of more than one billion dollars -- Stung Tatay by China National Heavy Machinery Corporation and Russey Chrum Krom by Michelle Corporation -- have not been properly scrutinised.

Both will be located in the country's southwestern Cardamom Protected Forest, and about 1,600 hectares (3,953 acres) of woodland would have to be flooded or cleared to make way for the dams, the government has said.

This could destroy key animal habitats and upset the delicate eco-system.

"Cardamom is the last hot spot of conservation in Indochina," said Sam Chanthy, an environmental officer with advocacy group Forum on Cambodia.

Qian Hai, third secretary of the Chinese embassy in Phnom Penh, denied his country's companies would damage the environment.

"We just help Cambodia. All these projects are approved by the parliament and the government," he said.

Ith Praing, Cambodia's energy secretary, insisted the government conducted careful environmental studies for all the dams.

"Outsiders always raise environmental issues, but we need electricity. We must develop our country. We must use our resources rather than buying oil," he said.

Cambodia has begun to climb back from decades of civil unrest to emerge as one of the region's fastest-growing economies.

Economic growth has averaged 11 percent over the past three years, although 30 percent of the 14 million people still earn less than a dollar per day.

The government fears rocketing energy prices will scare away foreign direct investment.

"Every sector needs electric power. When we have electricity at a reasonable price, development will come along," said Ith Praing, adding the government forecasts that by 2030, 70 percent of Cambodian families will have electricity.

Opposition member of parliament Son Chhay, however, said the debate is not simply a case of economic development versus the environment.

Poor people could be forced from their land to make way for the mega-projects, crops could be destroyed, while the environment the rural poor depend upon may be wiped out, he told AFP.

"The government just closes its eyes and lets Chinese companies do things that will cause a lot of problems in the future," Son Chhay said.

"It will not resolve poverty in Cambodia. Cambodia will lose a lot without taking into consideration the environmental consequences."