Ethiopia: Dam Critics Won't Go Away
6 February, 2010 | IPS Correspondent
The Gilgel Gibe III dam will hold back 14.7 million cubic metres of
water. Its 1,870 MW generating capacity will be a significant boost for
the Ethiopian Electric Power Company (EEPCO) which has plans to
extend electricity supply within the country and export power to other
countries in East Africa.
A 1.7 billion dollar contract to build the dam has been awarded to
Italian multinational Salini Costruttori SPA. But the project's critics have
assembled a damning dossier of problems with it.
Two environmental organisations, Friends of Lake Turkana and
International Rivers, are challenging the ecological soundness of the
project. They say it threatens biodiversity in the Omo River and Lake
Turkana which it feeds. The basin has large populations of Nile
crocodiles, hippopotamus, and over 40 different species of fish.
IR and FoLT say changes in the river's flow will also put the
livelihoods of up to 200,000 people who depend on the lake for fishing,
herding and irrigation at risk.
The groups have raised questions over the quality of the environmental
and social impact studies completed for the project.
Gilgel Gibe III's opponents also point out that the contract to build the
dam was not awarded through a competitive international tender; it was
negotiated directly with Salini, in violation of Ethiopia's procurement
guidelines.
Procurement
EEPCO argues that both Ethiopian and international procurement
guidelines allowed Gibe III's contract to be reached without a tender
process due to its size and huge financial requirements. EEPCO CEO
Miheret Debebe says the project's opponents are using false allegations
to try to stop the project.
However Ken Ohashi, World Bank country director for Ethiopia and
Sudan, confirmed that the omission of a competitive tender means the
Bank cannot loan the Ethiopian government money for the project. This
does not rule out World Bank involvement entirely.
"In a situation like this, there is a possibility for us, in line with our
guidelines, to help mobilise financing from the private market to finance
the project by providing a guarantee to those interested in financing it,"
Ohashi told IPS.
"If decided, we will provide guarantee against certain types of risk of
non-repayment to commercial financiers - basically 'political' rather
than 'commercial' risk of repayment," he said.
Construction on Gibe III is already more than a third complete, but
more money will be needed. The Ethiopian government's task of
addressing concerns - environmental, social, technical and financial - in
order to secure a World Bank credit guarantee has now been
complicated by problems facing an earlier phase of the massive
hydroelectric project.
A cautionary tale
Barely two weeks after it was formally opened on Jan. 14, the Gilgel
Gibe II hydroelectric power station suffered a collapse in its main
tunnel, forcing closure of the new facility while it is repaired.
Gibe II, also built by Salini, has - or had - a generating capacity of
420MW; it relied on water released from the Gilgel Gibe I dam
channeled through a 26 kilometre tunnel into the Omo River valley. The
terms for this project too were negotiated between the Ethiopian
government and Salini without competitive bidding.
According to Italian World Bank watchdog group Campagna per la
Riforma per la Banca Mondiale (CRBM), the 490 million euro contract
for Gibe II (today equivalent to 670 million dollars) violated Italian and
Ethiopian regulations. Italy's Directorate General for Development
Cooperation (DGCS) nonetheless approved the largest single aid credit
it had ever granted.
This was against the advice of both Italy's finance ministry and
DGCS's own internal evaluation unit. Reviewing that advice, CRBM
lists the flaws: a no-bid contract, an inadequate feasibility study, the
absence of funds for environmental mitigation, and an unrealistic
projection for servicing the loan.
The European Investment Bank also loaned the project 50 million euros
($69 million at today's exchange rate); according to the CRBM
accepting Ethiopia's argument that it faced an emergency electrical
shortage in lieu of more complete preparation and procedure.
Construction ran into severe difficulties as the tunneling engineers
encountered unexpected mud, sand and aquifers; the project was finally
completed two years behind schedule, with the Ethiopian government -
and taxpayers - picking up the cost overrun as the contract held Salini
liable for any delays due to engineering failures, while these problems
were due to an inadequate geological survey.
Returning to Gibe III
In 2009, a group of eight academics and consultants collaborating as
the Africa Resources Working Group (ARWG) published a sharp
critique of the studies done for Gibe III. The ARWG says that contrary
to the findings of the environmental and social impact assessments
provided by Salini and EEPCO, the downstream impacts of the dam
will likely be devastating.
They predict radical reduction of water flowing into Lake Turkana; the
loss of cultivation of seasonally-flooded land in the Omo River delta,
and of riverine forest and woodland the length of the river, damaging
biodiversity and livelihoods.
"Altogether, more than 200,000 indigenous peoples of the lowermost
Omo Basin are dependent on riverside and delta recessional
cultivation... This population would face massive economic losses,
with widespread severe hunger, disease and loss of life occurring on a
regional scale, if the Gibe III dam is completed."
The authors reject the official studies' claims that lake water levels are
already dropping due to evaporation from uncontrolled flooding, or that
using the dam to deliberately increase water flow in the river during the
dry season will alleviate drought.
Instead, they explain their view that extensive leakage through fissures
in the walls of the eventual reservoir behind the dam, as well as the
planned abstraction of water for new commercial agriculture and
industrial development just downstream will see water levels in Lake
Turkana fall by as much as 10 metres. The ARWG also expresses
concern that clay rich soil around the dam could become prone to
landslides as it fills up - and to top it off: the dam site is on an active
earthquake fault line.
"An accurate assessment of environmental and social processes within
the lower Omo Basin indicates that completion of the Gibe III dam
would produce a broad range of negative effects, some of which
would be catastrophic in the tri-country region where Sudan, Ethiopia
and Kenya intersect."
As the World Bank's review board meets on Mar. 5th, it will have
much to consider. At stake is the life of a river, the fate of 200,000
people along its banks, and the commitments to transparent and
effective aid made by governments and multilateral institutions alike.
Courtesy
6 February, 2010 | IPS Correspondent
- ADDIS ABABA, Feb
6 (IPS) - Ethiopia is
building a 240-metre
high dam on the Omo
River that is intended
to end the country's
electricity shortage
and supply power to
neighbouring
countries. Not
everyone's happy.
The Gilgel Gibe III dam will hold back 14.7 million cubic metres of
water. Its 1,870 MW generating capacity will be a significant boost for
the Ethiopian Electric Power Company (EEPCO) which has plans to
extend electricity supply within the country and export power to other
countries in East Africa.
A 1.7 billion dollar contract to build the dam has been awarded to
Italian multinational Salini Costruttori SPA. But the project's critics have
assembled a damning dossier of problems with it.
Two environmental organisations, Friends of Lake Turkana and
International Rivers, are challenging the ecological soundness of the
project. They say it threatens biodiversity in the Omo River and Lake
Turkana which it feeds. The basin has large populations of Nile
crocodiles, hippopotamus, and over 40 different species of fish.
IR and FoLT say changes in the river's flow will also put the
livelihoods of up to 200,000 people who depend on the lake for fishing,
herding and irrigation at risk.
The groups have raised questions over the quality of the environmental
and social impact studies completed for the project.
Gilgel Gibe III's opponents also point out that the contract to build the
dam was not awarded through a competitive international tender; it was
negotiated directly with Salini, in violation of Ethiopia's procurement
guidelines.
Procurement
EEPCO argues that both Ethiopian and international procurement
guidelines allowed Gibe III's contract to be reached without a tender
process due to its size and huge financial requirements. EEPCO CEO
Miheret Debebe says the project's opponents are using false allegations
to try to stop the project.
However Ken Ohashi, World Bank country director for Ethiopia and
Sudan, confirmed that the omission of a competitive tender means the
Bank cannot loan the Ethiopian government money for the project. This
does not rule out World Bank involvement entirely.
"In a situation like this, there is a possibility for us, in line with our
guidelines, to help mobilise financing from the private market to finance
the project by providing a guarantee to those interested in financing it,"
Ohashi told IPS.
"If decided, we will provide guarantee against certain types of risk of
non-repayment to commercial financiers - basically 'political' rather
than 'commercial' risk of repayment," he said.
Construction on Gibe III is already more than a third complete, but
more money will be needed. The Ethiopian government's task of
addressing concerns - environmental, social, technical and financial - in
order to secure a World Bank credit guarantee has now been
complicated by problems facing an earlier phase of the massive
hydroelectric project.
A cautionary tale
Barely two weeks after it was formally opened on Jan. 14, the Gilgel
Gibe II hydroelectric power station suffered a collapse in its main
tunnel, forcing closure of the new facility while it is repaired.
Gibe II, also built by Salini, has - or had - a generating capacity of
420MW; it relied on water released from the Gilgel Gibe I dam
channeled through a 26 kilometre tunnel into the Omo River valley. The
terms for this project too were negotiated between the Ethiopian
government and Salini without competitive bidding.
According to Italian World Bank watchdog group Campagna per la
Riforma per la Banca Mondiale (CRBM), the 490 million euro contract
for Gibe II (today equivalent to 670 million dollars) violated Italian and
Ethiopian regulations. Italy's Directorate General for Development
Cooperation (DGCS) nonetheless approved the largest single aid credit
it had ever granted.
This was against the advice of both Italy's finance ministry and
DGCS's own internal evaluation unit. Reviewing that advice, CRBM
lists the flaws: a no-bid contract, an inadequate feasibility study, the
absence of funds for environmental mitigation, and an unrealistic
projection for servicing the loan.
The European Investment Bank also loaned the project 50 million euros
($69 million at today's exchange rate); according to the CRBM
accepting Ethiopia's argument that it faced an emergency electrical
shortage in lieu of more complete preparation and procedure.
Construction ran into severe difficulties as the tunneling engineers
encountered unexpected mud, sand and aquifers; the project was finally
completed two years behind schedule, with the Ethiopian government -
and taxpayers - picking up the cost overrun as the contract held Salini
liable for any delays due to engineering failures, while these problems
were due to an inadequate geological survey.
Returning to Gibe III
In 2009, a group of eight academics and consultants collaborating as
the Africa Resources Working Group (ARWG) published a sharp
critique of the studies done for Gibe III. The ARWG says that contrary
to the findings of the environmental and social impact assessments
provided by Salini and EEPCO, the downstream impacts of the dam
will likely be devastating.
They predict radical reduction of water flowing into Lake Turkana; the
loss of cultivation of seasonally-flooded land in the Omo River delta,
and of riverine forest and woodland the length of the river, damaging
biodiversity and livelihoods.
"Altogether, more than 200,000 indigenous peoples of the lowermost
Omo Basin are dependent on riverside and delta recessional
cultivation... This population would face massive economic losses,
with widespread severe hunger, disease and loss of life occurring on a
regional scale, if the Gibe III dam is completed."
The authors reject the official studies' claims that lake water levels are
already dropping due to evaporation from uncontrolled flooding, or that
using the dam to deliberately increase water flow in the river during the
dry season will alleviate drought.
Instead, they explain their view that extensive leakage through fissures
in the walls of the eventual reservoir behind the dam, as well as the
planned abstraction of water for new commercial agriculture and
industrial development just downstream will see water levels in Lake
Turkana fall by as much as 10 metres. The ARWG also expresses
concern that clay rich soil around the dam could become prone to
landslides as it fills up - and to top it off: the dam site is on an active
earthquake fault line.
"An accurate assessment of environmental and social processes within
the lower Omo Basin indicates that completion of the Gibe III dam
would produce a broad range of negative effects, some of which
would be catastrophic in the tri-country region where Sudan, Ethiopia
and Kenya intersect."
As the World Bank's review board meets on Mar. 5th, it will have
much to consider. At stake is the life of a river, the fate of 200,000
people along its banks, and the commitments to transparent and
effective aid made by governments and multilateral institutions alike.
Courtesy
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