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Logo of Phnom Penh Post newspaper Phnom Penh Post - Govt gives contract for $2bn dam to VN firm

Govt gives contract for $2bn dam to VN firm

A VIETNAMESE development company has won the contract for a multi-billion-dollar hydroelectric dam on the Mekong River, replacing a Russian developer that failed to report to the government on time.

The Vietnam Urban and Industrial Zone Development Investment Corporation received its licence December 9, 2009, and now has two years to complete impact and output studies, according to an annual report from the Ministry of Industry, Mines and Energy.

“We hope that under this project Cambodia will have more electricity to respond to demands for consumption and business purposes in the future,” Bun Narith, deputy director general for the ministry’s hydroelectricity department, said Tuesday.

The developer has already begun studying the possible output of the dam and its impact on the environment, he added.

The dam could cost between US$2 billion and $3 billion, one of the largest dam projects approved by the government to date, Bun Narith said. The dam could generate up to 980 megawatts from the Mekong River in Stung Treng province, according to the ministry report, issued March 3.

The Vietnamese developer replaces Russia’s Bureya GES Stroy, which signed an agreement with the government in February 2009.

“We decided to transfer the licence from the Russian company to the Vietnamese company because the Russian company failed to submit reports … to the ministry on time,” Bun Narith said.

Since 2000, Cambodia has licensed private hydroelectric dam development for at least 21 sites across the country in hopes of generating enough power to meet Cambodia’s growing energy demand.

Energy Minister Suy Sem said this month that Cambodia hopes to boost electricity supply by between 20 percent and 25 percent this year, double the growth of 2009, in an attempt to match accelerating demand.

However, the government must be vigilant in licencing projects that can damage the environment and reroute water, said Chhit Sam Ath, executive director of NGO Forum.

“We are not against the development projects of the government if the projects are of high economic effectiveness,” he said. “What we want is that the government gives a public explanation and inspects the development projects carefully to make sure they will not affect people’s living, and the environment.”

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