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Hanoi (AFP) March 23, 2010 The largest hydroelectric project in Laos, which began selling power to Thailand last week, should suspend operations until it has fulfilled its obligations to local people, activists said Tuesday. US-based watchdog International Rivers accused the Nam Theun 2 Power Company (NTPC) of flouting an agreement not to start commercial operations at their dam on the Nam Theun river before they had compensated affected villagers. "The Nam Theun 2 Power Company (NTPC) is operating the dam illegally," Ikuko Matsumoto, the group's Lao programme director, said in a statement. International Rivers said resettled communities were entitled to irrigated land while downstream villagers should have already received compensation for flooded gardens and alternative water supply sources. More than 6,000 villagers were relocated to make way for the project. "Dam operation should be suspended until the Nam Theun 2 Power Company complies with its legal agreements," International Rivers said. NTPC announced on March 17 that it had begun supplying the Electricity Generating Authority of Thailand with 1,000 megawatts of power, almost its entire capacity. The World Bank, which has supervised and monitored the project, denied the activists' allegations. "The notion that the project is in violation of legal agreements is incorrect," the Bank said in a statement to AFP. It added that many people were already benefiting from a compensation programme that has been implemented for several years. The power company said it was working on a range of social and environmental programmes and that independent monitors were checking the progress to ensure it met its obligations. Laos is one of Asia's poorest nations but will earn royalties, dividends and taxes estimated at more than two billion dollars over the 25 years the power company will own the project, NTPC said. Environmentalists had long opposed the development, which began in November 2005. The 1.45-billion-dollar Lao-French-Thai dam has a generating capacity of 1,070 megawatts.
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