Local conglomerate Royal Group yesterday signed a deal in Phnom Penh with China’s Hydrolancang International Energy Co. Ltd. to build the controversial Lower Sesan 2 dam in Stung Treng province.
After the investment agreement was signed between Royal Group’s chairman Kith Meng and Hydrolancang’s chairman Huang Guangming, representatives from both companies then signed a separate agreement with the Ministry of Finance and the Ministry of Industry, which allows for construction on the project to move forward.
According to a statement released at the ceremony, construction will take place over a five-year period and the dam will be operated for 40 years before ownership is transferred to the government.
China’s state-run news agency Xinhua reported yesterday that the total investment in the dam is worth $781 million. Once the project is operational, the government will earn tax revenues of $29.6 million per year.
According to a Ministry of Industry document obtained earlier this month, Royal Group will hold a 90 percent stake in the project in partnership with Hydrolancang, while Vietnam’s state-owned electricity giant Electricity Vietnam has a 10 percent stake.
It was not explained yesterday why representatives of Electricity Vietnam were not present at the signing ceremony and Mr. Huang of Hydrolancang declined to comment on his company’s involvement in the project. According to the ministry documents, the consortium made up of Royal Group, Hydrolancang and Vietnam Electricity will be known as Hydro Power Lower Sesan 2 Co. Ltd.
Located near the confluence of the Sesan and Srepok rivers in Stung Treng, the 400-megawatt dam project is set to displace about 5,000 villagers, though environmentalists believe that thousands more villagers will be affected. One report also estimated that the Lower Sesan 2 dam could cause a 9.2 percent loss of fish stocks to the entire Mekong River Basin.
Speaking on the sidelines of the signing ceremonies in the Royal Group-owned Cambodiana Hotel, Mr. Meng said all the dam’s energy would be supplied to Cambodia.
“It will 100 percent be provided to the Cambodian people to develop their economy,” Mr. Meng said.
Downplaying concern by the thousands of villagers who must move to make way for the dam, Mr. Meng said an inter-ministerial committee would be set up to make sure that resettlement and compensation is fair.
Despite Mr. Meng’s assurance, Chan Thon, a villager representative in Srekor commune said villagers had yet to receive any information regarding their future.
“Would you be happy if you will be displaced, lose your livelihoods and your careers?” Mr. Thon asked.