Case#5 International River Network and Bujagali Dam Project
Astghik Gevorgyan 991153690 David Harutyunyan 991153694 Elen Zargaryan 991153701 5/6/2009
International River Network and Bujagali Dam Project Uganda, a country based in Africa, is one of the poorest countries in the world. Less than 5% of the population of Uganda has access to electricity more because of poverty and low creditability and less because of lack of electricity.AES is considered to be one of the biggest companies in the world and the largest independent power producer is going to construct $530-million dam near Bujagali Falls on the Nile. Though the details of Bujagali Dum project such as the costs, the amount and terms of capacity payment and distribution of risks are kept confidential; economic calculations are not reliable – how do you know this, International River Network (IRN) has lot of concerns about socio-environmental issues (the costs of the project overcome the forecasts by about 300 mln the government of Uganda and the Word Bank still commit the project). In given conditions the project faces several problems including socio-environmental and economic miscalculations and issues regarding corruption which will make it reasonable to stop the project and to ho on with analysis and researches for alternative projects. 1. Bujagali Dam project is good/bad for the Ugandan people. Uganda’s GDP vs. other sub-Saharan countries’ GDP. Advantages: From the economic and social point of view the construction of Dam will increase economical welfare of Ugandan people by providing certain level of employment both during and after the construction. It will also support the development of other electricity consuming industries. ? Disadvantages: 1. According to AES' "draft final" environmental impact assessment (1999), Bujagali Dam would permanently displace 820 people, and affect an additional 6,000. Is that a lot, measure in terms of percentage of population. 2. The displaced will be left permanently poorer as a result of the project. What about the greater good. 3. The project will permanently submerge highly productive agricultural land as well as islands supporting valuable natural habitats. 4. The changes to the river could permanently harm fisheries. Could – what is the probability 5. The project will affect tourism-the second largest source of foreign currency and employment (over 6,000 people raft the Nile each year near Bujagali, spending nearly $4 million a year in Uganda on activities not related to rafting, much of which goes directly to local communities) Of course there are trade offs. 6. The project will increase the debt load of the nation (20-40mln more than any other similar project) Uganda as any other country needs power, but the question is whether a large dam at the Bujagali site – is the most appropriate approach for the poor, indebted nation (external debt/GDP equals 66% in 2001). Although less than 10% of the Ugandan population has access to electricity, most citizens could not afford Bujagali’s costly power. Another issue is the expected climate change and possible impact on the Lake Victoria already being affected by the two existing dams. What is the issue – low water levels since 1960 So according to economic forecasts for a long term in case of success of completion of the project the population of Bujagali may gain from the project, however the lack of transparent information and the abovementioned disadvantages it is more probably that the project will harm Ugandan people in both social and economic terms. As the level of poverty is very high in Uganda the main goal of the government and International organizations is the reduction of poverty and creating better socio-economic conditions in the country also including increase of foreign investments. This can be achieved by meeting minimum international conditions also including electricity. According to some opinions the project will not help to solve Uganda's biggest...
Please join StudyMode to read the full document