A Crack in China's Dam Plans
McCully, Patrick, Multinational Monitor
After nearly two years of review, the U.S. Export-Import Bank denied support to U.S. corporations chasing contracts for China's Three Gorges Dam at the end of May. Caterpillar and Rotec Industries of Illinois and Voith Hydro of Pennsylvania had hoped for letters of intent for loan guarantees from the Ex-Im Bank which would enable them to submit formal bids to sell China construction equipment for the dam.
Ex-Im Bank President Martin Karmarck said in a May 30 statement that the Bank's board "has concluded that Ex-Im Bank cannot issue a letter of interest for this project at this time. The information received [from China], though voluminous, falls to establish the project's consistency with the Bank's environmental guidelines."
If completed, the Three Gorges Dam would stretch nearly a mile across and tower 575 feet above the bed of the Yangtze. Its reservoir would stretch over 350 miles upstream and force the displacement of 1.3 million people. It would be the most powerful hydroelectric dam in the world. Construction began in 1994 and is scheduled to take 20 years [See "Planning for Disaster: China's Three Gorges Dam, Multinational Monitor, September 1993].
In March 1991, opposition to the project in China forced the suspension of the dam, but Premier Li Peng swiftly resurrected the project in the aftermath of the Tiananmen Square massacre.
Environmental organizations warmly applauded the Ex-Im Bank announcement.
"This is phenomenal," says International Rivers Network Executive Director Owen Lammers. "It represents a serious blow against what would have become the world's most socially and environmentally ruinous dam."
According to Kamarck, "the major (though not only) issues of concern" for Ex-Im were reservoir quality, the endangered species and other "ecological resources" threatened by the project, the "environmental and socioeconomic impacts associated with the proposed resettlement of 1.3 million people" and the "protection of cultural resources."
The Chinese government has had numerous problems finding foreign financing for the dam, estimated to cost up to $75 billion. The World Bank, the leading international funder of large dams, has for some time stated that it will not help fund the project. An international bond offering first scheduled for release in April 1994 has been delayed indefinitely due to concerns within the investment community over the financial risks inherent in the dam. …