One of the leading partners in a controversial hydroelectric dam project in southeastern Turkey pulled out of the scheme this week.
Although the Swedish construction firm Skanska would not say why it had pulled up its 24 percent stake in the seven company consortium, campaign groups have been quick to claim that the project's environmental consequences are the reason.
A report by World Bank resettlement expert Dr. Ayse Kudat said the Ilisu dam planned for the Tigris River would displace up to 78,000 people, three times the number originally estimated by the Turkish government.
The report commissioned by a consortium of export credit agencies considering financing the project was leaked to UK media earlier this month. It was enough to dissuade Skanska from participating, said Tony Juniper of Friends of the Earth UK.
"Skanska's move deals a body blow to this scheme," said Juniper. "We welcome Skanska's decision to protect its reputation by putting its environmental and social policies ahead of the short term gains of being involved with this highly damaging dam."
The Ilisu dam in southeast Anatolia, 65 kilometres (40 miles) upstream of the Syrian and Iraqi border would generate 3,600 Gigawatt-hours of peak-hour electricity each year. A rockfill dam 1,820 meters long and 135 meters high would create a reservoir with a maximum volume of 10.4 billion cubic metres and a surface area of 313 square kilometers.
Its backers accept that the dam's construction would have a significant impact on the environment in an area already ravaged by 16 years of conflict between the Kurdistan Workers Party and the Turkish government.
Though the displacement of local people tops critics' concerns about the project, other issues have surfaced.
If the reservoir created by the dam is filled too quickly it could leave downstream states short of water, a possibility that has caused the Iraqi and Syrian governments to voice concern. The mediaeval city of Hasankeyf would be partially flooded.
UK based construction company Balfour Beatty, which has a 31 percent stake in the project, points out that the environmental mitigation measures upon which approval for the project and its financing is dependent are due next spring. The company claims these measures will answer critics' concerns.
Turkey has been requested to produce a Resettlement Action Plan before construction starts, and to accept international expertise in the planning and implementation of the resettlement to help ensure that it is done to international standards.
The country has also been requested to give assurances that the filling of the reservoir will be done in accordance with a formula that would safeguard the interests of downstream states.
Balfour Beatty said partial flooding of Hasankeyf would be unavoidable. Turkish authorities have been asked to use the seven to eight years left before flooding to carry out a comprehensive archaeological rescue dig and to draw up plans to preserve as much as possible. Preservation would include restoring the Upper Citadel, which will not be flooded, as a national museum with artifacts and selected buildings rescued from the lower town.
But Dr. Kudat's report mentions the lack of will or capacity in Turkey to handle resettlement issues, failure to meet international World Bank standards, inadequate budget, lack of necessary information on affected people, and the failure to address the needs of women and pastoralists.
The project appears vital to Turkey's plans to exploit its only source of clean fuel. The country is suffering a major power shortage. Although its power consumption is only 15 percent of that of Western Europe and the United States, Turkey's rapidly developing economy is creating demands for significant increases in electricity supply.
The country plans to build two new power stations the size of Ilisu every year for the next 10 years to help meet growing demand. But in order not to be dependent on the fossil fuels such as oil, gas and coal that will have to be imported for the new power stations, the Turkish government produced the Ilisu plan.
In 1997, Turkish water resources company DSI selected Sulzer Hydro of Switzerland, a leading turbine manufacturer, as main contractor for the project. Sulzer Hydro selected Edinburgh based Balfour Beatty to lead the civil engineering part of the construction. Other partners joining the consortium included ABB of Switzerland, Impregilo of Italy, three leading Turkish construction companies, Kiska, Nurol and Tekfen and, until this week, Skanska.
Balfour Beatty has asked the UK government for an export credit guarantee to support its part in the project. The governments of Austria, Germany, Italy, Japan, Portugal, Switzerland and the U.S are all considering extending official export credits or guarantees of about $850 million to the project.
"Sadly Balfour Beatty continues to enhance its reputation as a company that appears to be prepared to be involved with almost any project, no matter how controversial or damaging," said FOE's Tony Juniper. "The Ilisu dam is highly controversial, unlikely to serve any useful purpose and will do more harm than good. Balfour Beatty and the UK Government should withdraw immediately."
Balfour Beatty points out that hydro power is renewable and non-polluting. Ilisu would save the three million tonnes of greenhouse gases that an equivalent thermal power station would emit each year.
The company predicts that if built, the Ilisu dam will help farmers overcome droughts with a predictable water supply, attracting investment to a desperately poor area.
- 194 World Financial Institutions