CHINA CONCEALING REAL COSTS, DAMAGE OF THREE GORGES DAM

by Emad Mekay

(IPS) WASHINGTON -- The mammoth Three Gorges dam in China is attracting renewed calls for an independent financial and environmental audit, as concerns mount over the hefty costs and social and environmental impact of the world's largest dam.

The Toronto-based environmental group Probe International (PI), which put up stiff opposition to Canadian financial backing for the multi-billion-dollar project, said on Tuesday that claims by the dam authorities that the Three Gorges project will cost some $25 billion have never been independently verified.

Local authorities announced earlier this month that the dam, whose construction began 13 years ago, will be completed on May 20, nine months ahead of schedule. The entire project, sometimes compared with the Great Wall of China in its mammoth scope, could be completed in 2008, more than a year ahead of schedule.

"To sort economic fact from fiction, China needs a comprehensive independent audit of the real costs of the Three Gorges project," said Patricia Adams of PI.

"The audit should document all the revenue raised and spent building the dam. The project's environmental consequences and the dam-related disaster risks must also be quantified and taken fully into account," she said.

The dam has been one of the most controversial infrastructure projects in recent years. It has drawn fire from environmentalists and rights campaigners who say it is one of the highest-impact hydropower projects on the environment and local populations.

The International Rivers Network (IRN), a U.S.-based watchdog group monitoring the project, says that even though it is nearly complete, campaigners will continue to highlight the plight of displaced villagers, human rights abuses and the environmental costs; several other dams are in the pipeline in China.

"It's such an icon for dam building in China and the Chinese government has plans to triple its hydropower capacity in the next 20 years," said Aviva Imhof, campaigns director with IRN. "So it's really important to show that there are so many outstanding issues in term of the environmental impact and the social impact."

PI says that the true cost of energy produced by the giant Three Gorges project will be at least several times the government-fixed price of 3 cents per kilowatt-hour. It urged an investigation into contentious issues like pollution in the dam's 660-kilometer reservoir, salt-water intrusion and erosion problems in the Yangtze estuary near Shanghai.

It also pointed a finger at corruption and abuses in the resettlement of more than 1 million people.

As early as this month, locals were still being evacuated from the dam's surrounding areas. ChinaDaily.com reported earlier this month that the rising water near the dam will force the evacuation of another 80,000 people.

Last August, 500 residents of Yangguidian, who were relocated because of the project, complained that they were harassed by officials and prevented from petitioning the central government about pollution and their resettlement terms.

The villagers are some of the 1.3 million people being relocated to make way for the giant 2.5-kilometer-long dam.

Some Chinese online news outlets have defended the project, saying that after completion on Saturday, it will help control flooding of the Yangtze River, protecting some 15 million people and 1.54 million hectares of farmland.

The local press has also quoted officials saying that when operational, the dam will address electricity shortages and blackouts in the area as well as help spread the country's economic boom to poor areas.

The local company running the project, the China Three Gorges Project Corp. (CTGPC), has heralded the news of the early completion of construction with a huge media campaign asserting that the project is a "century-long dream of the Chinese people."

But environmental campaigners, who have long said large dams come with huge costs to the ecosystem and to locals, are not convinced. They argue that dams lead to involuntary resettlement, human rights abuses, the destruction of critical habitats of endangered species, and significantly contribute to climate change from methane emissions.

Such costs outweigh the benefits, they say, especially when cheaper and cleaner energy alternatives such as wind, solar and geothermal already exist.

The Three Gorges Dam is no exception. "We do not believe that the benefits are worth the cost. There are alternative ways of generating electricity in China that would be more cost-effective," Imhof of IRN told IPS.

The group says that conservation measures are the most obvious alternative for China because it remains one of the most energy-inefficient countries in the world.

"It is a lot cheaper to invest in energy-efficient measures than to build a massive project like the Three Gorges dam," Imhof added.

Despite the uproar from environmentalists and rights advocates, industrialized nations have been unabashed in using export credit agencies, which provide loans and guarantees to private corporations from their home country to do business abroad, to fund mega-dams, including the Three Gorges.

Canada, France, Germany, Japan, Sweden, Switzerland have all provided at least $1.5 billion in export credit to finance the sale of turbines and other equipment for the project.

About 40 percent of the project's funding came from the government of China and the rest came from loans and external financing.