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dam-l Probe International - Three Gorges Article

China's Dam Begins To Crumble
by Dai Qing and Patricia Adams, National Post, April 6, 1999

The web location for the following article by Dai Qing and Pat Adams is:
http://www.nationalpost.com/financialpost.asp?S2=opinion

I have also included a copy/paste version in case you have difficulties
getting into the National Post website.

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        New premier Zhu Rongji seems poised to topple the giant
            Three Gorges dam, a Canadian-backed megaproject
                             
                        China's Dam Begins to Crumble

                       By Dai Qing and Patricia Adams
                             NATIONAL POST
                        Tuesday, April 06, 1999
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By all accounts, China's Three Gorges dam, now under construction on the
Yangtze River, will start producing power in just four years. Dam
officials say they have already ordered the turbines, resettled 160,000
people, and diverted the river. Most deem the dam a fait accompli. Even
Li Rui, a party elder and noted dam opponent, told the New York Times
that the project -- China's largest public work since the Great Wall --
was too far along to cancel.

In fact, at no time since the first shovel hit the ground five years ago
has the dam's completion been in greater doubt, government propaganda
notwithstanding.

The resettlement numbers are inflated: The China Daily estimates that
only 49,000 people have been moved -- less than a third of official
estimates. Of those, many returned after discovering that their new
homes and farms -- far from being superior, as promised -- resembled
"pigsties" perched on barren hillsides.

While concrete has been poured, most has gone into preparatory work,
such as the temporary dams needed to divert the Yangtze during
construction. Almost no concrete has been poured for the main part of
the dam. The construction has negligibly affected the river so far, says
Dr. Philip Williams, a hydraulics engineer and president of the
International Rivers Network. "Restoring the site would cost
comparatively little."

Technical problems -- some potentially insurmountable -- are slowing
construction, and the Three Gorges Project Development Corp. still
hasn't secured its financing. With the economic case for pulling the
plug on this megaproject becoming overwhelming, political support at
the top is cracking.

Unlike his predecessors, China's new premier, Zhu Rongji, has never
publicly endorsed the Three Gorges dam. Now this hard-nosed money man
seems to be deliberately distancing himself from it. He visited the site
for the first time only last December -- and then on a detour to inspect
nearby flood relief work. At the dam site, he criticized the dam's
safety and proposed that "foreign engineering-monitoring companies with
good reputations" audit the construction. Soon after, he fired more than
100 officials and hired 200 extra inspectors to crack down on corruption
and shoddy construction standards. Last month, his failure to so much as
mention the dam in his report to the National People's Congress was
deafening.

Because of China's financial difficulties, Mr. Zhu is limiting the Three
Gorges Project Development Corp.'s access to state funds, telling it to
issue bonds instead. That may have been a kiss of death. According to
the Financial Times, foreign banks are increasingly nervous about
financing Three Gorges, partly to avoid backing a loser and partly to
minimize China risks in the aftermath of the Asian crisis. The recent
surprise bankruptcy of a leading Chinese investment company
withsubstantial foreign borrowings also soured foreign investors.

As a result, financing is already $3-billion behind schedule (all
figures in U.S. dollars). Even corporation officials, who normally exude
confidence about their ability to finance the world's largest civil
works project, now admit to "certain difficulties in raising funds for
the second-phase construction."

Until February, the government required the Chinese press to praise --
and forbade it to criticize -- the Three Gorges project. Then Strategy
and Management, the mainstream journal of a prominent think tank read
by thousands of officials and scholars, published a searing expose of
dam-spawned social problems . The article describes the obstacles to
resettling people, mostly to virgin land which is often uncultivable and
mountainous.

Initial efforts to transplant farmers onto steep hillsides fared poorly,
industries in the resettled areas more often failed than boomed, and
lack of funds, widespread corruption, and deceptive reports by officials
plagued resettlement efforts. If current trends continue, warns the
journal, which has close ties to both government and the military, the
plight of these people -- 1.3 million to 1.9 million must be moved --
"may become an explosive social problem, and the dam region will become
a hotbed of sustained upheaval."

With Tiananmen still an open wound, the government does not relish
dealing with social unrest. Already, it has cause to worry. After Three
Gorges oustees were relocated to Kashgar last October, eight policemen
were killed and the city placed under curfew. In Chongqing just last
month, people rioted over losing their land to a Three Gorges-related
infrastructure project. And in Yunyang county, two thirds of some 15,000
people being forced to leave their homes have filed petitions with the
central government warning of unrest and complaining that officials have
fooled relocatees about resettlement funds.

Even normally passive peasants now speak out, accusing local officials
of pocketing compensation payments and registering relatives as
relocatees. According to the Economic Daily, the National Audit Office
found officials had embezzled 232 million yuan (about $30-million) from
funds earmarked for resettlement. "Corruption is now the greatest
problem. We receive letters from people protesting all the time," said
one inspector in Fengdu, one of the 20 cities and counties to be
inundated.

Futile attempts by dam officials to find land for relocatees on Hainan
Island, Hubei, and Inner Mongolia, says Hong Kong's South China Morning
Post, show why "promises to resettle between 500,000 and a million
peasants and improve their living standards, so freely given when the
project was approved in 1992, cannot be fulfilled.

"Everywhere the problems are turning out to be much bigger than
predicted. There are more people, more corruption, less land and fewer
jobs than anyone, even the pessimists, ever imagined."

The population's failure to be pliant worries many in government -- and
it has moved only 2% to 5% of the ultimate total. To move 500,000 people
in 2003 -- the peak resettlement year -- the central government "will
have to rely on the military or a man-made flood to force people out of
their homes," concluded a study by a Chinese sociologist.

Three Gorges is so big that almost everything about it is experimental
and risky. Two kilometres wide and rising 185 metres above the river
bottom, the dam will create a reservoir stretching 600 kilometres to the
port city of Chongqing, turning a fast-flowing river into a stagnant
pool of industrial and human waste. The submerged spillway bays -- 27 in
all, each with the average flow of the Missouri River -- are well beyond
proven world experience.

Because the dam reservoir's weight could induce an earthquake,
triggering landslides and tidal waves in the reservoir -- the dam sits
on several seismic fault lines -- the dam could collapse, flooding
millions downstream. And for the dam to deliver its promised power,
flood control, and navigation services, the engineers will somehow have
to flush out the silt accumulating behind it. The 14-year-old Gezhouba
dam, the Three Gorges protege just 40 kilometres downstream, has already
lost 40% of its capacity to silt accumulation. The Sanmenxia
dam, which silted up within four years of completion, was dynamited to
save the city of Xi'an from flooding. Chinese scientists believe Three
Gorges would similarly threaten upstream Chongqing, a city of 13
million.

Three Gorges' official price tag of $24.5-billion is also uncertain. An
internal estimate approved by the State Council in 1993 put the cost at
$34.4-billion. A Chinese banker familiar with the project told the Wall
Street Journal in 1994 that inflation, interest rates, and hidden
construction costs could push the total to $77-billion.

Even if the dam comes in on time and on budget, no economic or
environmental calculation justifies the project. It would produce
electricity at two to three times the cost of its competition, raising
the spectre that Three Gorges will become China's most notorious
stranded asset. It would reduce greenhouse gas emissions by one 10th as
much as the same investment in cogeneration -- the technology of choice
in market-oriented economies. It would also be ineffective -- and likely
counterproductive -- in flood control.

More than 2,000 years ago, the corruption and taxation required to
complete the Great Wall brought down the First Empire of Qin. Corruption
and taxation over government plans to nationalize railroads
precipitated the 1911 revolution that overthrew the Manchu dynasty.
Some Chinese academics -- knowing that 90% of the Chinese public oppose
the dam -- warn that pushing it through could bring down the Communist
Party and the People's Republic.

Mr. Zhu is working hard to head off such an outcome. He has repeatedly
chastised the Three Gorges project both for the corruption and the
taxation it brings -- the entire country suffers an electricity tax
that he has criticized as a burden on "ordinary people." Rather than
losing face, a matter of paramount importance in China, Mr. Zhu has
positioned himself to save face when the day comes -- as in all
likelihood it soon will -- that he steps in to stop the dam for the good
of the country.
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                        TALE OF A TROUBLED PROJECT:

1986: After six decades of false starts, China asks a consortium of
Canadian engineering companies and state utilities -- SNC, Lavalin,
Acres International, Hydro-Quebec International, B.C. Hydro
International -- to conduct a feasibility study of the Three Gorges dam.
The Canadian International Development Agency pays its $14-million cost,
declaring that "a number of our leading consultants and utilities
have good prospects of winning hundreds of millions of dollars worth of
business for Canada."

1989: Canada's feasibility study concludes that a 185-metre-high dam
with a reservoir level of 160 metres is technically, environmentally,
and economically feasible, and recommends it proceed at an early date. A
World Bank statement in the study states that a higher reservoir level
would not be economically viable. The Chinese then release another
feasibility study that recommends a higher, 175-metre high reservoir
dam.

1989: The Three Gorges dam is opposed by Dai Qing, whose lineage and
history allow her to speak out. The daughter of a revolutionary martyr,
adopted by one of China's great marshalls, engineer at a top-secret
laboratory specializing in guidance and propulsion systems for
intercontinental missiles, agent for military intelligence and a
columnist with a devoted following, she publishes Yangtze! Yangtze!, a
collection of interviews, essays, and statements by Chinese scientists,
journalists, and intellectuals opposed to the dam. Yangtze! Yangtze!
pressures the State Council to postpone the dam, and inspires the
democracy movement.

1989: Following the Tiananmen Square demonstrations, at which an
estimated 1,000 people are killed, Dai Qing is arrested for her work on
Three Gorges, incarcerated in Qincheng, a top-security jail for
political prisoners, and told she was on a list of six people to be
executed. Yangtze! Yangtze! is banned.

1992: The National People's Congress is expected to vote, uncontested,
in favour of building the dam. Some delegates attempt to voice
opposition, but the chairman turns off the microphone. Mayhem ensues.
One third of the delegates vote no or abstain.

1994: On the eve of Prime Minister Jean Chretien's Team Canada mission
to China, the Export Development Corp. announces that it will lend money
to help build the Three Gorges dam.

1994: To manage construction and resettlement, EDC lends $12.5-million
to the Chinese government to finance the sale of a super computer from
engineering giant Monenco AGRA.

1997: EDC lends $153-million to the Chinese State Development Bank to
finance the sale of turbines and generators from Canadian General
Electric for the dam.
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DAI QING, an engineer and author of Yangtze! Yangtze!, is China's
leading critic of the Three Gorges dam.
PATRICIA ADAMS, an economist and Yangtze! Yangtze!'s English-language
editor, is executive director of Probe International, a Toronto-based
environmental group.
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