Dam Critics Won't Go Away
Feb 6, 2010 - Inter Press Service - All Africa
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
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
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
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
"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