Developer, Sagaing govt agree to nix hydropower project
A HYDROPOWER project that had been under construction in Sagaing Region’s Homalin township was scrapped after the regional government and the dam’s developer, International Power Generation (IPG), came to an agreement on October 28. The two parties determined that the project’s expenses were greater than potential revenues and that it might harm the local environment, Sagaing Region’s Planning and Finance Minister U Soe Oo told The Myanmar Times.
“It was located in the forest where local people go and pluck vegetables for their food,” said regional MP U Kyaw Htay Lwin (NLD; Homalin 2). “And there are farmlands, so locals are concerned about their farms and pastures – that their cattle will disappear after flooding [caused by the dam]. They opposed the project. Now they are satisfied that the project has been terminated.”
The Nam Mar Lone hydropower project was approved under the previous government but halted and reanalysed after the handover of power earlier this year. The 600-megawatt-generating dam had been slated for completion in 2018.
The entirety of the construction process was projected to cost K6 billion (US$4.67 million) and the previous government fronted 10 percent of that, K600 million, in March. IPG later asked for an additional K900 million, claiming that they had completed 25 percent of the project. But authorities, after surveying the work, determined that the company was not in fact one-quarter of the way to completing the project. In August, U Soe Oo revealed that IPG had completed only 8.5pc of the project.
Further rankling officials, the company had not received the necessary permission from the Department of Forestry, despite it operating in forested areas, Sagaing Region lawmaker U Than (NLD; Katha 1) said in August.
IPG has agreed to pay back the K600 million in funding that it had accepted from the government and eat the cost of taxes that the company paid after they received initial project approval.
Although this was funding from the regional budget, financial regulations restrict the returned money from being spent immediately, U Soe Oo said, adding that it will have to be reviewed by the Union government. The funds will not be unlocked for re-appropriation until next year’s budget is passed, he said.
Officials have declared that they are reviewing several hydropower projects across Myanmar that were similarly planned by previous governments – most notably in Kachin State, where the fate of the Chinesebacked Myitsone dam hangs in the balance. That $3.6 billion venture was suspended by then-president U Thein Sein in 2011. His successor government has formed a commission to scrutinise the dam, and others also slated for the Ayeyarwady River, and recommend whether construction should resume.
– Translation by Win Thaw Tar
Workers install electrical towers on March 16.