Moneytalks: ... on the Economic Aspects of Water Dams
-- a _kt75 | reprint compilation
Reprint: Large dams have long been promoted as providing "cheap" hydropower and water supply. Today, we know better. The costs and poor performance of large dams were in the past largely concealed by the public agencies that built and operated the projects. Dams consistently cost more and take longer to build than projected. In general, the larger a hydro project is, the larger its construction cost overrun in percentage terms. The true risks and costs of dams are being forced into the open due to increasing public scrutiny and attempts to attract private investors to existing and new projects.
The World Commission on Dams found that on average, large dams have been at best only marginally economically viable. The average cost overrun of dams is 56%. This means that when a dam is predicted to cost $1 billion, it ends up costing $1.56 billion. In too many cases, the burden of uneconomic dams is shouldered by a nation's citizens, while the project builders walk away with a tidy profit and another project to add to their portfolio. Given that most of the world's large dams are now being built in the world's poorest nations, this is a burden they can ill afford. Read the full article... & get more.
Supporting info article: Many of the 45,000 big dams built across the world cost too much, were late, damaged the poor, and have failed to provide all the electricity and water for irrigation that their planners claimed they would, the world commission on dams reported yesterday.
The main beneficiaries were often western construction companies which gained billions of pounds worth of business paid for by aid agencies such as the World Bank, and consequently added to the debt of some of the poorest countries.
But despite condemning ill-thought-out immense projects that were bulldozed through without consulting those whose homes and jobs they destroyed, the commission said dams are not all bad.
Properly planned, with the consent of those most affected, and provided that alternatives are investigated and found unacceptable, dams still have a place in providing development for poorer countries.
The report, launched by Nelson Mandela in London yesterday, is the first definitive assessment of big dam projects and is expected to act as a blueprint for further developments. It recommends that export credit guarantee departments do not support projects unless a number of conditions are met, including prior consent of those affected, proper compensation schemes and environmental safeguards. The commission is also concerned about conflicts arising from states building dams on shared rivers without consulting downstream neighbours. Continue... & read more...
