Pak Mun Dam Case Study

As part of a two-year work programme to review the development effectiveness of large dams, The World Commission on Dams (WCD)commissioned TDRI to lead the case study on Pak Mun dam on the Mun river in Thailand's northeast region. This paper presents the results of the investigation.The study re-examined the premises of the underlying economic case for the project, and reviewed the project’s justification in the light of material evidence and developments to date. The re-examination focused on the variables that have been identified and quantified in justifying the project’s economic feasibility. Benefit-cost analysis was used, as in the original process of decision-making, to determine the project’s internal rate of return and residual net present value derived from expected cash flows discounted at the opportunity cost of capital.Main findings are as followsRe-examination of the premises that were used to justify the construction of Pak Mun on economic grounds does no one credit. Project benefits were over-stated and based on inappropriate premisesA preliminary financial analysis of the project based on its anticipated benefits in terms of revenue from expected power sales might have revealed Pak Mun’s shortcomings as a feasible investmentIn reality, Pak Mun was conceived and operated primarily as part of EGAT’s power development plan in response to national load forecasts, in spite of its misleading given title as a multipurpose development project. However, the village census database dating from the baseline year of 1992 or earlier suggests that there have been dramatic and general improvements in the quality of life and the economic potential in the project area, in absolute as well as in relative terms compared to the rest of the province.If the issues of compensations over Pak Mun have remained unresolved in some parts, it is not for lack of effort on the part of EGAT, who cannot be faulted on the implementation and follow-up activities as stipulated in the environmental impact mitigation plan. The final terms of compensation have been generous to those affected[adapted from authors]