The admission, made at an INGO-led workshop held with indigenous community representatives in Phnom Penh, came after a United States-based fisheries expert and consultant for conservation group International Rivers estimated that only about 1 percent of the dam's capacity would be used locally, with the rest being sold to Cambodia's eastern neighbour.

The proposed $816 million, 400-megawatt dam is set to begin construction later this year in Stung Treng province by the Cambodia-Vietnam Hydropower Company, a joint venture that is 51-percent owned by the EVNI Joint Stock Company of Vietnam and 49-percent owned by local conglomerate the Royal Group.

Prach Sun, a secretary of state for the Ministry of Environment, initially said yesterday that the potential of the Lower Sesan 2 Dam to fulfil local energy needs outweighed the environmental and social damage it may inflict on indigenous communities.

"The development of the Lower Sesan 2 Dam will have some effects on natural resources, but electricity is the most important resource for the country and we must ensure the development of hydroelectric dams will be achieved," he said at the event, which was attended by over 60 villager representatives from Rattanakiri and Stung Treng who say they will be affected by the project.

"The relocation of people and the price of electricity decreasing will contribute to the development of the country," Prach Sun said.

Danh Serey, deputy director of the Environment Impact Assessment department at the Ministry of Environment, echoed these comments, stressing the need for increased energy supplies in Cambodia.

"Cambodia needs electricity, we need to develop electric areas, and hydropower is much better than other sources-this is why the Lower Sesan 2 Dam is so important," he said.

Yet the forum took an unexpected turn when fisheries expert and INGO consultant Ian Baird said that there was no evidence to support the claims that the electricity generated would be used in Cambodia.

"The plan of the company is to export all of this electricity to Vietnam," he said.

"So I don't know why we are talking about this electricity as being used in Cambodia," he said, adding that Cambodia will be unable to even make use of the 400MW of power from the project without a national electrical grid. "This is not about electricity for Cambodia. It is not about reducing the cost of electricity in Cambodia," Baird said. "They are trying to maximise their profit. It's not for the benefit of the country-these are private companies."

The comments prompted one representative from the Ministry of Environment to quickly change his stance.

Danh Serey later claimed that exporting the electricity to Vietnam was the second step of the process, after the energy needs of local communities in northeast Cambodia had been met.

"The Ministry of Environment has observed the situation closely. Only the left-over electricity from the use of local people will be sold to Vietnam," he said following the event.

Baird said only a miniscule amount of the energy generated would be used locally.

"Maybe a very small amount of electricity they might use around Stung Treng, but it would be less than 1 percent," he said, adding that the province could likely all be powered off of only 1MW of energy.

"It's obvious the power is not for Cambodia because there is too much and there is no way to distribute it," he said.

"The question is, what benefit is Cambodia getting? What is the Cambodian government getting in terms of taxes or concession fees?" he continued.

Royal Group Chair Kith Meng declined to comment, referring questions to the Ministry of Industry, Mines and Energy. Royal Group chief financial officer Mark Hanna could not be reached for comment yesterday.

In a statement released in April, Kith Meng said that the project "will contribute greatly to the continued economic development of Cambodia, ensuring a reliable, moderately-priced supply of electricity".

The Phnom Penh Post - June 4, 2011