The Ministry of Environmental Protection (MEP) on June 11 discontinued examination and approval of two huge hydropower plant construction projects on southwest China's Jinsha River because of environmental protection factors, China Central Television (CCTV) reported last Wednesday.

The move is considered the severest punishment in the country's environmental appraisal history as it involves two large state-owned conglomerates, China Huaneng Group and China Huadian Corporation, and several billion yuan in investments.

The MEP pointed out that Ludila Hydropower Co. Ltd. of China Huadian Corporation and Longkaikou Hydropower Co. Ltd. of China Huaneng Group built hydropower plants on the Jinsha River in southwest China without environmental examination and approval from the central government. Some dikes have already dammed up rivers and streams.

Power plant construction sites on the Jinsha River hustle and bustle with river water rushing from the tunnels. All vegetation along the river banks has disappeared. [Photo from CCTV]

The two discontinued hydropower plants are located on the middle reaches of Jinsha River at the junction of Yunnan and Sichuan provinces. The region is one of the richest in hydropower and mineral sources in the country, attracting many developers and much investment since 2000.

According to CCTV, Zhang Xiangtao, technical department director of Ludila Hydropower, said the construction on its plant began in February 2007; the cofferdams had been completed and the Jinsha River dammed.

"The basic condition for the dam construction is to let water flow through the diversion tunnels we have built," Zhang Xiangtao said, speaking over construction hustle and bustle and river water rushing from the tunnels. All vegetation along the river banks has disappeared.

Zhou Weidong, general manager of the Ludila plant, insisted that the MEP's discontinuation order did not have a big impact on the overall project.

"It only covers construction of the main dam between cofferdams in the upper and lower parts which would have to be discontinued during the flood season in June," Zhou said.

Zhang Zhiping, head of the construction preparation for the Longkaikou plant, said work on its plant had started in September 2007.

"The main dam has begun to take shape," he said. "The original river course has been blocked for the use of dam construction."

Longkaikou Hydropower has stopped construction after receiving the MEP's order. Zhang Zhiping said the project has been moving rapidly because, like the Ludila plant, river-damming needs to be finished before the flood season.

According to local statistics, at least 12 hydropower stations in the middle and lower reaches of the Jinsha River are being planned and developed. Although not as blatant in damming rivers and streams without examination and approval from the central government as Huaneng and Huadian were, these developers and investors are extremely good at finding loopholes and circumventing the laws and regulations and policies, CCTV said.

Early stage investment for the two projects has exceeded 2 billion yuan (U.S.$292.54 million). The failure to pass the appraisal from the environment department would mean great economic losses, it added.

"What is done cannot be undone," Zhou said. "The environmental appraisal report seems to be a mere scrap of paper under such circumstances."

Zhou argued the MEP's discontinuation order was purely a procedural problem and unrelated to the environment.

Yang Yong, a scientist and environmentalist with the Research Institute of Hengduan Mountains, said all the power plants he had visited in recent years had been built before the MEP issued its environmental appraisal report.

Major projects, like building hydropower plants, are required to go through an "early stage" during which they must receive appraisal from the MEP before work can begin on the main part of the project. But investment costs are highest in the early stage, and companies would suffer great economic losses if they fail to pass the appraisal. Rather than wait and risk losing money, companies begin construction without formal approval.

The Xiluodu Power Plant, for example, was put in the State Council's authorized plan in September 2002, even though the MEP had not examined and approved it in its own appraisal report, said Pan Yue, vice minister of the MEP, in 2007. Despite protests from environmentalists, construction on the Xiluodu dam began in late 2005, and construction has accelerated this year.

But Yang isn't just worried about companies circumventing the law.

"The construction of dams has changed the local ecological environment while the constructors think they haven't done anything wrong," Yang said. "They shouldn't do as they please."

Yang said the ecological system in the area is very fragile. With more power plants, rare fish will drown because they cannot adapt to the new environment created by the power plants.

"Power plants will be rising on the Jinsha River in the near future," Yang said. "We have been trying to figure out a way to influence the development of the area, but it seems our hopes are dashed."

Yang also predicts there will be more landslides. "It would be difficult for the fragile mountains to face the constant erosion from rising waters caused by the building of power plants," he said. "Besides, the area is located on an earthquake fault line, which adds danger to the power plants themselves."

But Yang still thinks the MEP's discontinuation order has produced a deterrent effect.

"It shows the central government has attached great importance to environmental protection in southwest China," Yang said. "It is indeed a big decision made by MEP especially in the background of driving economic development."