Uganda's Bujagali Project: a dam bad idea

The Bujagali Dam project, which was proposed in the late 1990s, is one of the most controversial dam projects in the world, and according to the Uganda government is set to continue. The government in April this year announced that it had selected the Aga Khans Industrial Promotion Services (IPS) to build the Dam at Dumbbell Island 8 km from the Owen Falls Dam downstream of the river Nile.

According to government, it is electricity loadshedding which is driving it (government) to have this dam built as soon as possible, ostensibly to solve the problem. Therefore, this means that it is not the development effectiveness of the project that is driving the process. However, it is now well known that Bujagali Dam is not the least-cost option of the several dams that were proposed in Ugandas Energy Master Plan ten years ago because it does not seriously factor in costs due to losses in tourism, environmental quality, culture and spirituality as well as socio-economic and socio-political stability.

Moreover, it has been established that the cost of Bujagali Dam was skewed to make it appear as if it is twice as cheap as Karuma Dam further downstream of the Nile. Karuma in fact is cheaper and, if built, will not be environmentally, socially and culturally destructive. Even in terms of tourism, there will be virtually no destruction because the dam will not affect the Falls. Further the Karuma dams electricity will be cheaper.

Despite government determination to continue with the discredited Bujagali Dam project, many issues remain unresolved. Even the World Banks own transparency and accountability watchdogs, the International Finance Corporations (IFCs) Ombudsman and the Inspection Panel found in 2001 and 2002 respectively that the issues involved were critical and required attention. They recommended that if the project were to have development effectiveness, they should not be ignored. The issues of concern remain at the core of civil society action on the Bujagali dam.

Unfortunately, they are being ignored and have been loosely explained away by Ugandas Ministry of Energy in its March 22nd 2005 response to outstanding Bujagali environmental issues raised by National Association of Professional Environmentalists (NAPE) on February 28th 2005.

The issues, which Ugandans have repeatedly and increasingly raised, include the following:
- The political and corporate corruption in the dam process;
- The opportunity cost of Bujagali Falls based tourism;
- Resettlement and compensation related issues;
- Under-valuing of spiritual and cultural wealth of the Bujagali Falls;
- The Governments failure to show that the price of electricity from the proposed Bujagali Dam will be affordable by the majority of Ugandans;
- The fluctuating cost of the building of Bujagali Dam, which a 2002 study by Prayas of India found to be too costly and not conforming to international standards in the dam construction industry;
- Ignoring the cumulative impacts of Kiira Dam, Nalubaale Dam and the proposed Bujagali Dam, which are close to each other;
- Ignoring comprehensive assessment of the available energy alternatives;
- Falling water levels in Lake Victoria, which unfortunately government has variously blamed on drought
- ignoring the real possibility that the reason could be the construction of two dams parallel to each other and drawing water from the same source point;
- Deliberate exclusion of accountability and transparency from the Bujagali Dam process.

The World Banks private investment arm, the IFC, was to be the major lender for the project, but pulled out after AES withdrew in August 2003 due to the unresolved controversies surrounding the project. The Bank has not indicated whether or not it will get involved this time. Since the World Bank backed off from the project in 2002, the Ugandan government has proposed various funding mechanisms, from an infrastructure development bond to raiding the National Social Security Fund (NSSF) to pay for the dam. NSSF is a fund to which the countrys workers contribute monthly towards their social security after they have retired from active service.

It is now clear that if government is bent on pursuing the project, the already overtaxed citizens will have to shoulder the cost of the dam as this years national budget further vividly suggests. However, the recent debt relief extended to the poorest of the poor countries of Africa of which Uganda is one, might as well be another source of badly needed funds for this dam burden. Yet debt relief indicates that Uganda cannot sustain its economy nor bear the burden of further debt. The wise thing to do with the debt relief is to use the money, which would have been used for debt repayment, to provide social services and security to the citizens health and education.

Unfortunately civil societys views continue to be dismissed by government as encumbrances to industrialization, poverty eradication, economic growth and availability of electricity. NAPE and others who have been raising these issues are not anti-hydropower or against development but work for sustainable development in Ugandas energy sector, evaluation of technologies and the pursuit of the best energy option for Uganda.