Laos announced yesterday it would begin building the controversial $3.8 billion Xayaburi hydropower dam on the Mekong River this week – in defiance of the governments of Cambodia and Vietnam, as well as environmental groups that fear it could ravage the lives of millions.

Lao Vice-Minister of Energy and Mines Viraponh Viravong said a ground-breaking ceremony scheduled for tomorrow would mark the formal start of the project, the first of its type for the lower Mekong.

“It has been assessed, it has been discussed the past two years,” Viravong said. “We have addressed most of the concerns.”

Conservation groups have warned that the 1,285-megawatt dam will block sediment flow and fish migration and open the floodgates for 10 more proposed dams on the river, including eight in Laos, which they predict could negatively affect as many as 60 million people.

Turbine contracts, job advertisements and reports of construction at the Xayaburi site, in the country’s north, meant Laos’s intention to build the dam – despite having no regional approval to do so – was no secret.

Even so, yesterday’s revelation contradicts assurances made to fellow Mekong River Commission (MRC) countries – primarily Cambodia and Vietnam – that the project was on hold while further studies examined the effects it could have on communities downstream.

The other MRC member state, Thailand, is set to receive about 90 per cent of the dam’s electricity.

Kirk Herbertson, Southeast Asia policy co-ordinator for the environmental group International Rivers, said yesterday he had heard only initial reports of the announcement.

“But it just shows that Laos’s promises to co-operate with neighbouring countries were never genuine,” Herbertson said. “The project was never delayed as Laos said. It was proceeding on schedule.”

Cambodia and Vietnam had requested that Laos study people’s dependence on the river for fishing and farming and examine how fish behaved, Herbertson added.

“Laos never did that. They ended up with studies with information that never asked these questions,” he said.

The Finnish government announced this week it was investigating the author of one of these studies, Finnish-based firm Pöyry, over its role in consulting with Laos over the Xayaburi project.

“Laos has talked about how it has hired Pöyry to address concerns of neighbouring countries. While they might be the right words, they were the wrong studies,” Herbertson said.

Speculation began to mount in April that more than just preliminary work was being carried out at the site when it emerged that Thai firm Ch Karnchang had signed a construction contract with the Xayaburi Power Co – of which it is a part owner – to build the dam.

Despite numerous denials that development was forging ahead, Laos had been testing the water to see what it could get away with, Herbertson said.

“Laos has gone ahead unilaterally without agreement from other countries. It leaves the Mekong governments without a process to agree on.”

Under an agreement, MRC countries must consult each other on hydroelectric projects on the river before proceeding with construction. Discussions between the four countries – which have included Vietnam urging Laos to postpone its hydro projects for a decade – resulted in agreement late last year that a study on the transboundary impacts on downstream communities must be undertaken before Xayaburi could be built.

Viraponh said yesterday that Laos had addressed environmental concerns by commissioning its own studies, making Laos, in effect, an example that other countries with dam projects can follow.

“We are taking care more of the environment and other concerns. Other projects can follow some similar standards to Xayaburi.”

Laos has said it is committed to strengthening its economy through selling energy from its hydropower projects – a line Viraponh reiterated yesterday.

“Hydropower is a big natural advantage for Laos,” he said. “If you cannot develop the Xayaburi project, what other choice do we have?”

The announcement came as 250 Thai villagers representing 24,000 people who are predicted to be affected by the dam protested yesterday in Laos.

As officials gathered in the capital Vientiane for the 9th Asia-Europe meeting, the protesters boarded a flotilla on Thailand’s side of the river to make their point – protests were not allowed in Vientiane.

“The [summit] provides a critical opportunity for Asian and European leaders to address the Xayaburi dam issue before regional work to ensure food security and sustainable development is undermined by the dam’s impacts,” a statement from International Rivers said.

“Numerous Asian and European governments have served as development partners and financial supporters to the [MRC], the intergovernmental body responsible for sustainably managing and protecting the Mekong River.”

Local media reported yesterday that Prime Minister Hun Sen had met with senior Laos officials to discuss its plans for Xayaburi.

Te Navuth, secretary-general of Cambodian National Mekong Committee, could not be reached for comment, but told the Post on Sunday that Cambodia had sent a delegation to the Xayaburi site last week and would report back to the government on its findings.

Officials from the Ministry of Water, the Ministry of Environment and the MRC could not be reached for comment yesterday.

To contact the reporter on this story: Shane Worrell at [email protected]

Cheang Sokha contributed to this report.