Costs, Benefits and Sustainability of the Salween Dams along the Thai-Burma Border

Abstract

The 2800 km Salween River is the last major river in Southeast Asia that remains free flowing. Unfortunately, Thailand and Burma have made plans to build a series of five large dams along the 118 km portion of the river that forms the Thai-Burma border. With an installed capacity of 19,600 MW, these dams are expected to cost approximately 10 billion USD and will be funded by private investors from China, Burma, Thailand and Japan. Since the first MOU was signed by Thailand and Burma in 2005, there has been significant resistance from civil society groups who want to stop the projects on environmental and human rights grounds. This study is an attempt to look more closely at the economics of these projects and whether or not they are actually worth the costs that will be fronted by taxpayers, local people and investors. Although the study found a positive NPV for Thailand, investors who wish to fund these projects should carefully consider details about the extremely high-risk investment environment in Burma, slow returns on investment and inefficiencies associated with large hydropower when evaluating this figure. Finally, the lack of sustainability from both an environmental and human rights perspective further illustrates the need for more data collection regarding the feasibility of these projects and potential alternatives before construction proceeds.