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dam-l Press Advisory: New Corruption Scandal further Discredits Wall



Street Financed Project
Sender: owner-irn-three-gorges@netvista.net
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Press Advisory 
May 8, 2000
International Rivers Network
Contact: Doris Shen
Tel: 510-848-1155 ext 317

Chinese Engineers Petition Government to Delay Three Gorges Dam
	New Corruption Scandal further Discredits Wall Street Financed Project


A group of 53 Chinese senior engineers and academics has made an urgent appeal
to China's leaders to rethink plans for the Three Gorges Dam.

The petition(1)  warns that filling the reservoir as planned could have dire
consequences for hundreds of thousands of people living in the Three Gorges
area and for navigation along the Yangtze River.  

The petition was submitted on March 3rd, 2000. About one-third of the
signatories are former members of the Chinese People’s Political Consultative
Conference, the official political advisory body to the state government. 

The petition, written by Lu Qinkan, a leading hydrologist who worked on the
dam's original feasibility study, calls for a return to the original plan of
delaying reservoir filling so that experts would have time to monitor sediment
buildup and to determine if higher water levels are viable. This would also
provide some relief for resettlement authorities, the experts argue, who are
faced with the costly and difficult task of resettling up to 1.8 million people
out of the Three Gorges region.

Maintaining the Three Gorges reservoir at 156 meters would reduce the number of
people who have to be moved by an estimated 520,000.  

The original plan, approved by the National People's Congress in 1992, aimed to
keep water levels behind the Three Gorges dam at 156 meters for the first ten
years of operation. During this time, experts could evaluate the impact of
sedimentation on navigation and ports at the reservoir's uppermost end. If
feasible, the water level would then be raised to a final operating level of
175 meters between the dam's 17th and 20th year of operation. In 1997, dam
officials changed the plans to maximize the dam’s power output. The water level
is currently scheduled to rise to 175 meters in the sixth year of operation. 

Three Gorges Dam proponents have announced that two more dams will be built on
Yangtze tributaries upstream of the Three Gorges reservoir to trap the inflow
of sediment. The experts' petition claims the proposed dams will have no effect
on sedimentation at the reservoir's upper end. 

The petition listing the experts’ concerns comes at the same time as yet
another corruption scandal engulfs the dam.  The Hong Kong South China Morning
Post, revealed on May 3rd that the head official at the Three Gorges Economic
Development Corporation (TGEDC) has embezzled at least one billion RMB, about
$125 million. The TGEDC, a subsidiary of the Three Gorges Project Construction
Committee, and supervised by the Three Gorges Resettlement Bureau, went
bankrupt in1999. The company, which employed 2,600 people, has ceased
operations.  
  
This news comes on the heels of a government audit that revealed resettlement
officials embezzled about $57.7 million - equivalent to 12 percent of the total
$488 million resettlement budget. Embezzled money was used to speculate on
stocks, real estate and was also transferred to personal accounts.  

Earlier this year, the China Business Times reported that Yuan Guolin, who
until January 2000 was the deputy general manager of the China Three Gorges
Project
Corporation, the company responsible for construction and administration of the
dam, said the corporation  would not be floated on the stock market because
of its 
economic and technical problems. Mr. Yuan also said that a review was
needed on 
whether the project could sell its output after it began generation in 2003. 

International environmental and human rights groups have targeted global
investment banks including Morgan Stanley Dean Witter, Salomon Smith Barney of
Citigroup, Credit Suisse First Boston and Merrill Lynch for their participation
in underwriting China Development Bank Bonds in January 1997 and May 1999.
China Development Bank lists the Three Gorges Dam as its top loan commitment.  

“The U.S. Wall Street financing of non-performing enterprises that were not
designed
to be effective development tools, but rather, monuments to 
corruption and political vested interests, is highly irresponsible” says IRN.

“From the beginning, the Three Gorges Dam has been a political project,
promoted only by those who would have personal financial and political gain”
says Dai Qing, the project’s most outspoken critic. Dai Qing’s 1989 publication
of "Yangtze! Yangtze!", a collection of essays by hydrologists,
sociologists, and
engineers critical of the project, led to her eleven month imprisonment.
Distribution of "Yangtze! Yangtze!" and other criticism of the project’s
impacts
is not allowed. Public access to the state conducted environmental and social
impact assessments is denied. 


(1) For a copy of the petition, translated and summarized by Canadian NGO 
Probe International, please see
www.nextcity.com/probeinternational/ThreeGorges/tgp/tgp17.html



- end - 
--

IRN is currently working with an international coalition of NGOs to halt
all foreign support for Three Gorges Dam until public debate of the project
is allowed in China and the civil and economic rights of those facing
displacement by the project are secured.  A North American consumer boycott
of Morgan Stanley Dean Witter's Discover Card Credit Services is underway
until the company adopts environmental and social policies governing core
business operations. 

For more information, please see:  www.floodwallstreet.org 


International Rivers Network
www.irn.org