THE CASE FOR A MORE THOUGHTFUL APPROACH TO BUILDING DAMS ON ABAY (THE BLUE NILE)

Part II: A Critical assessment of building large dams
Getachew Begashaw, Ph.D.
June, 2014
 

  • In Part I of this piece, we highlighted the requirements for an appropriately planned, designed, constructed and operated dam on Abay, the Blue Nile, and why it is in the national interest to do so, provided it is executed not for a short-term political and economic purpose, as is conceived by the ethnic-based rulers of the country, but with the long-term economic and security of the people in mind.

 

getachew_begashaw
Getachew Begashaw, Ph.D.

We stressed how the dictatorial and treacherous TPLF rulers and their sympathizers have used Abay, a natural resource of tremendous national pride and heritage, for their vile propaganda, portraying  those who question their misguided policies as unpatriotic opponents of building a dam on the treasured river. As a matter of urgency, we underscored the need to elucidate the secrecy under which the project was conceived, and reiterated the level and seriousness of the government’s corruption and its effect on the construction and operation of the dam. In particular, we called upon all genuine scholars to address the economic hardship the dam has inflicted, and will continue to do so, on the vast majority of the people of Ethiopia; and to relentlessly shed light on the imminent environmental havoc the ill-conceived dam is destined to cause.
 
In the following, we argue, using publicly available evidence that the GERD is fraught with economic, social, political and environmental problems of far-reaching consequences; and infer that, in the long-term, its benefit will be dwarfed by the indescribable adverse effects it will have on that poor nation and its people. Our analysis will lead to the ominous conclusion that the dam, as conceived by the illegitimate and non-representative government in power,  is not only detrimental for Ethiopia’s long-term interest, but might even be a debacle waiting to happen.
 
Economic and Environmental Realities
 
A major question pertaining to the construction of the GERD all along has been how much it will cost to build, and who will pay for it.  According to some sources, the cost was initially estimated at US$4.8 billion, a relatively huge figure that is about 60% of the national budget!  We may all recall the reactions of seasoned economists when the late Prime Minister, Meles Zenawi, with his usual arrogance declared: “… it will not be impossible for 80 million people to contribute 80 billion Birr”. In a country where the vast majority of the people live below subsistence level, the declaration of the dictator was, of course, preposterous, even if the original estimates of cost and duration of construction were to be trusted. In reality, given the notoriously egregious dam construction experience in Ethiopia, as well as the experiences of other countries that embarked on the construction of large dams, it is beyond the realm of possibility to imagine that the GERD would be completed as planned, within the allotted budget and the estimated timeframe.
 
According to a new study conducted by Oxford University, for example, the vast majority of mega-dams around the globe are unprofitable undertakings as a result of high cost overruns. The report, which was highly comprehensive and analyzed a total of 245 dam projects in 65 countries, is the largest economic analysis of large dams ever undertaken, covering all large dams built during the period from 1934 to 2007 for which sufficient documentation is available[1].Among other striking results, the study found that actual costs on large dams on the average exceeded original estimates by around 96%!  In particular, the authors remarked: “We find that even before accounting for negative impacts on human society and environment, the actual construction costs of large dams are too high to yield a positive return.”  Most notably, in a commentary in the Wall Street Journal, the authors specifically questioned the official cost estimates for the GERD, and noted:
 
“Brazil’s Itaipu Dam was built in the 1970s. It cost nearly $20 billion, 240% more in real terms than predicted and it impaired Brazil’s public finances for three decades. Despite producing much-needed electricity, Itaipu is unlikely to ever pay back its capital and debt costs. More recently, Ethiopia’s $4.8 billion Grand Ethiopian Renaissance Dam on the Nile, which began construction in 2011, will likely cost $10 billion before its projected completion in 2017—nearly a quarter of Ethiopia’s GDP. Instead of helping Ethiopia grow, the dam could drown the country’s fragile economy in debt.”[2]
 
 
In a recent article intended to tout the GERD, the TPLF propaganda machine and some credulous Ethiopians used the Chinese Three Gorges Dam as an example of a successful case of mega dams, while presenting an incomplete picture of the world’s most controversial hydropower project. In fact, even the Chinese government officials are on the record of admitting that, unless preventive measures were taken, “there could be an environmental collapse” as a consequence of the many, massive changes caused by the dam to the Yangtze River.  As reported in the May 19, 2012 issue of The New York Times, for example,  China’s State Council had to acknowledge that the “Three Gorges Dam, the world’s largest hydroelectric project and a symbol of China’s confidence in risky technological solutions, is troubled by urgent pollution and geologic problems”. While the official figure for the bill of the project is $23 billion, outside experts estimate it may have cost double that amount. It is common knowledge that the government has fallen far short of its goals of helping to resettle the 1.4 million people displaced by the dam. Further, the problem has been compounded by the need to resettle additionally more people in order to relieve the pressure on the slopes of the 410-mile-long reservoir, where the sheer weight of water backing up has increased the danger of earthquakes and landslides.
 
The experience of one of Ethiopia’s neighbors, Uganda, is also illuminating. In a recent UN-sponsored forum on water conflict issues, Henry Bazira, who is an Executive Director at the Water Governance Institute in Uganda, commented:
“My real concern is the apparent lack of long-term planning and preparation in most African countries that frequently causes them to rush into doing something (crisis management) at the detriment of the regular citizens, the environment, economies and politics. If there had been long-term planning and preparation, such large-scale infrastructure(s) would have been envisaged in advance and preparation of the affected people(s) for the upcoming projects would have been more protracted, effective and easily appreciated. It is relatively easy to project the energy needs and options of a country over a long period of time and plan and prepare for them. Therefore, there is no justification for a rush.
It is sad that the GERD has proceeded in a rush and that there has not been sufficient attention given to the social, economic, environmental and political effects/impacts that the dam is likely to have. What I see in the GERD is a repeat of some of the mistakes that were done when constructing the Bujagali dam in Uganda such as failure to address the cumulative impact(s) of a cascade of dams along the river; inadequate compensation and resettlement of project-affected people; loss of peoples’ livelihoods; causing the project-affected people to indirectly, unwillingly and unknowingly bear part of the cost of the dam; and the project’s inability to produce design capacity of electricity because of poor projections in the hydrology and recharge capacity of the Nile; among other problems. It is evident that the GERD project may proceed ignoring such problems, but these does not mean that the problems have gone away. There will be need for Ethiopia to be mindful of these and other problems and try to address them going forward. The Nile riparian countries (with the assistance of the NBI) should address the salient issues related with the Nile.”
Restricting attention to our own experience, much could be discerned from recent failures in dam construction within Ethiopia. One case in point is the overly long-delayed Tekeze hydroelectric project that ran more than $136 million over budget. The contract for this dam was awarded in 2002, to be completed in 2007. In the course of the construction of the dam, it was recognized that the ground on which the dam was being built was rather weak, leading to landslides and other problems, a fact that was not known in advance thanks to the shoddy feasibility and engineering studies on the basis of which the project was justified. As a result, the project was considerably delayed, and completed two years late in 2009.[3] Another project, Gilgel Gibe 2, with a price tag of 374 million Euros, (more than US $505 million), was awarded to Salini without the benefit of competitive bidding or adequate feasibility studies, a common practice in the corrupt TPLF regime. The construction started without the legally required environmental permit, and was supposed to be completed in December of 2007. As reported elsewhere: “Deficient geological studies had overlooked sandy soils and aquifers in the rock. The tunnel boring equipment got stuck in the mud, and the engineers had to redesign the tunnel’s path. … The aqueduct collapsed only 12 days after its inauguration, nine kilometers inside the mountain”.[4]
In addition to the price tag associated with the construction of dams, the cost of maintaining them is nontrivial and the consequence of suboptimal maintenance catastrophic. This is best illustrated with the situation of one of Africa’s biggest dams, the Kariba dam on the Zambezi River. According to a report by the governments of Zimbabwe and Zambia, the dam is said to be near collapse, and in need of over $250 million in repairs. If the dam collapsed, millions living downstream would be at risk of a catastrophic flood that would do untold destruction.[5]
In terms of fiscal reality, large dams are known to be poor investments. Thanks to new developments in environmental science, our knowledge about the devastating impacts of large dams has been growing. For example, it is abundantly clear now that even in developed countries, large dams are facing serious problems and challenges. This is the case, for example, with the Hoover dam in the United States, where after many years of mega-drought, the water level is so low that is feared that the dam may not be able to produce electricity in the near future.[6]
Further, dealing with the adverse effects of large dams requires a stable and robust economic environment and good governance. In this respect, it is worthwhile to understand the place of Ethiopia in the economic ladder compared to countries with large dams (Table 1). The world’s 10 largest hydroelectric dams are located mostly in relatively developed countries, with 2 in China (Three Gorges and Longtan); 2 in Brazil (Itaipu and Tucurui), 2 in Russia (Krasnoyarsk and Bratsk), 2 in Canada (Robert-Bourassa and Churchill Falls), 1 in Venezuela (Guri) and 1 in the US (Grand Coulee). These hydroelectric dams have capacities ranging from 4,500 – 22,500 MW. According to the GERD plan and design, Ethiopia will soon join this exclusive club, owning a dam with an almost three-fold capacity of the Aswan Dam of Egypt (which generates 2,100 MW).  However, Ethiopia, as a dismally poor country, does not have the economic capacity or the requisite democratic governance to put her in a position to build, maintain and properly operate a dam of the scale and complexity of the GERD.
 

Nominal GDP and GDP Per Capita of Countries with the 10 Largest Hydroelectric Dams (2013)
Country GDP (trillions)[7] GDP Per Capita[8]
US 16.3 53,101
China 8.4 6,747
Brazil 2.3 11,310
Russia 2.1 14,818
Canada 1.8 51,982
Venezuela 0.4 12,472
Ethiopia 0.04 541

 
In addition to the direct costs discussed above, there is the opportunity cost that must be taken into consideration in any evaluation of the net benefits of the GERD.  With reference to the tremendous economic risks the country is taking on a project of such colossal magnitude,  Jan Mikkelsen, the IMF country representative, recently counseled:  “I think there’s a need to rethink some of those projects a little bit to make sure that they don’t absorb all domestic financing just for that project. If you suck in all domestic financing to just a few projects that money will be used for this and not for normal trade and normal business.”[9]
 
Several Ethiopian scholars who have intimate knowledge of the dam have also expressed profound concern about the economic and technical soundness of the project. Asfaw Beyene, a Professor of Mechanical Engineering at San Diego State University, is one such an expert on the matter who believes that the dam is not only unable to produce as much power as is claimed, but is also 300% over-sized! According to Beyene, more than half of the turbines will be rarely used, and the GERD’s available power output, based on the average of river flow throughout the year and the dam height, is at most 2,000 megawatts, much less than the advertized amount of 6,000 megawatts. While there is little doubt that the system may have been designed for a peak flow rate that only happens during the 2-3 months of the rainy season, there is no sound economic basis to justify this scheme. Beyene affirms that that the issue is so highly politicized that “it seems to suppress legitimate engineering inputs and environmental discussions.”[10]
 
Recently, Sci Dev Net, a group trying to bring science and development together through news and analysis, has published interesting articles questioning the veracity of labeling large hydropower dams as renewable when the electricity produced is not for local needs, but for export. In reference to the Belo Monte Dam and its devastating effect on the Xingu rainforest in Brazil, it’s editorial commented:   “…. when hydropower energy generation moves from being a necessity that answers pressing energy needs to being a commodity to trade [as is the TPLF plan for the GERD] and where it has a massive impact on the local ecosystem, questions need to be raised about whether it should enjoy the positive, feel-good connotations of the term renewable.” In a related piece concerning Malaysia’s proposed dam on the Baram River in Sarawak on the island of Borneo, the group also revealed that the electricity from the dam is intended for export, and drew attention to the loss of biodiversity, forest and cultivated land that construction would cause. Like many other perceptive observers, the group advocates the strategy of building ‘mini-hydros’ on smaller tributaries as a more acceptable alternative, since they are likely to interfere less with the river ecosystem and generate power for local use rather than as a commodity for export.[11]
Notwithstanding the claims of certain supporters of the dam that “the financial and social cost-benefit preliminary analysis of the GERD on upstream and downstream countries are favorable,” the secretive TPLF rulers did not share, with the public or other relevant groups like the International Panel of Experts (IPOE), many key project documents, including the critical geotechnical assessments for the main and saddle dams and project cost-benefit analyses, which still remain confidential. Based on the little known, the recently leaked IPOE document alarmingly reveals: “…. the (hydrological study) is very basic, and not yet at a level of detail, sophistication and reliability that would befit a development of this magnitude, importance and with such regional impact as GERD.” Summary of the key findings stated in the IPOE document and other insights will be presented in a forthcoming Part III of this piece.
Those genuine Ethiopians who unwittingly and unconditionally support the construction of the GERD as currently planned, designed and executed should reevaluate whether Ethiopia could really afford the accompanying economic, social, geological and environmental problems, and the cost overruns that could almost double the bill, with the inevitable long delays.  Given that almost all contracts in Ethiopia are dubious, and that dam projects are almost always directly negotiated with only one company, as was the case with the Tekeze, Gilgel Gibe 2 and Gibe 3 dams, and now with the GERD, it is plausible to assume that the secretive deals are marred by kickback incentives. Neither is it beyond the realm of possibility to surmise that, because of the sweet deals and cozy relationships between contractors and top officials, contracts are drawn without the usual requirements to hold contractors accountable for any form of economic, technical, social, geological or other risks that result from their actions.
Ethiopians have no mechanism or recourse by which they could uncover or control the unbridled level of corruption of this government that is pervasive from top to bottom. While the poor people will ultimately assume the responsibility of paying the overly burdensome cost of the dam, they are completely powerless to stop the illicit fund outflow that is fattening the accounts of the TPLF oligarchy in foreign banks. The people have no confidence in their repressive government to undertake this project without destroying the environment, in light of the notorious environmental records of the regime, especially in the south and south-western Ethiopia where it has parceled out ancestral lands at dirt cheap prices through its evil land grab policy and dealings.
It is, therefore, suggested that all concerned Ethiopians join hands to force the government to be transparent about the known shortcomings of the dam, and hand over the oversight of the project to independent Ethiopian experts. A non-representative government should not be trusted with a project of the magnitude of the GERD that will have considerable adverse economic, environmental, ecological and social impacts for generations to come.
In light of the aforementioned deficiencies and problems of the dam, it behooves on all genuine Ethiopians to do soul searching about potential measures that must be taken to mitigate the inevitable adverse impacts. Given the paucity of information about the dam, and the stage the construction has reached, this may be a tall order. By all indications, construction on the project is proceeding on “an aggressively accelerated schedule” with little room for adjusting key elements of dam design to reduce harm or prevent problems. The dictators in power continue to brazenly criminalize any attempts to question the design of the project or to discuss openly aspects of the project that may adversely impact the future of the country and its people. However, given the gravity of the situation, silence should not be an option. Ethiopians of every stripe should ask and get answers to questions on:

  • The short- and long-term safety of the dam, relative to known international standards
  • The impact on the ecology and biodiversity of the area
  • The technical integrity of the dam, including the region’s seismicity, whether the dam has the potential to be overwhelmed by flooding,  or how it may in the long-term be affected by siltation
  • And, most importantly, who will benefit from its revenues, if any, and who will be responsible for its losses and prohibitively expensive maintenance and financing costs.

 
In a final and forthcoming Part III of this piece, we will revisit some of these questions; present a summary of the IPOE document, which impartially and objectively unveils the critical deficiencies of the GERD, revealing some of the economic incentives that have driven the kleptocratic TPLF oligarchy to embark on the project; and conclude with some pointers to fellow Ethiopians to resist the malevolent propaganda of the ethnocentric, dictatorial regime, and work in unity to save the country from the impending catastrophe that would otherwise devastate her.
 
[1] Ansar, A., Flyvbjerg, B., Budizer, A., and Lunn, D. (2014). Should we build more large dams? The actual costs of hydropower megaproject development. Energy Policy. Volume 69, Pages 43–56
 
[2] http://online.wsj.com/news/articles/SB10001424052702304704504579430923019746140
[3] http://journal.probeinternational.org/2009/11/28/ethiopias-tekeze-dam-fiasco/
[4] http://www.ethiopianreview.com/index/12529
[5]  https://www.newsday.co.zw/2014/03/20/kariba-dam-wall-faces-collapse/
[6]  http://www.nytimes.com/2007/10/21/magazine/21water-t.html?pagewanted=all&_r=0
 
[7] http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)
[8] http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita
[9] http://www.bloomberg.com/news/2012-09-14/imf-urges-ethiopia-to-slow-nile-dam-project-to-protect-economy.html
[10] http://gadaa.com/oduu/20303/2013/06/19/why-is-the-hydroelectric-dam-on-the-blue-nile-the-grand-ethiopian-renaissance-dam-gerd-sized-for-6000-mw/
[11]http://www.scidev.net/global/water/editorials/hydropower-described-as-renewable.html
 

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