Egypt and Ethiopia are at odds over the construction of the $4-billion hydroelectric Great Ethiopian Renaissance Dam along the Nile River. The project is slated to complete by 2017 and Egypt is worried that it will affect its water supply.
Similarly, another dam project in Ethiopia’s Omo River Basin has sparked concerns by human rights groups. The project and the government’s move to clear land in the region put 500,000 indigenous people in Ethiopia and neighboring Kenya at risk, warns Human Rights Watch. Some 150,000 indigenous people will be relocated from the Omo Valley as a part of the nation’s controversial ‘villigization’ program.
“Ethiopia can develop its land and resources but it shouldn’t run roughshod over the rights of its indigenous communities,” said Leslie Lefkow, deputy Africa director at Human Rights Watch. “The people who rely on the land for their livelihoods have the right to compensation and the right to reject plans that will completely transform their lives.”
The construction of the dams are a part of Ethiopia’s infrastructure development goals. The belief is that it will help the country by creating jobs and an electricity source. Problem is that mega-dams may not be worth the trouble.
Using the largest and most reliable reference data of its kind and multilevel statistical techniques applied to large dams for the first time, we were successful in fitting parsimonious models to predict cost and schedule overruns. The outside view suggests that in most countries large hydropower dams will be too costly in absolute terms and take too long to build to deliver a positive risk-adjusted return unless suitable risk management measures outlined in this paper can be affordably provided.
That is long-winded researcher speak for, mega-dams are not worth the hassle. More importantly, it can come at the cost of better projects and investments. As the authors point out:
Large dams also exert an opportunity cost by consuming scarce resources that could be deployed to better uses, sinking vast amounts of land that could have yielded cash flows and jobs from agricultural, timber, or mineral resources.
So, in addition to whether the construction of the Great Ethiopian Renaissance Dam is harmful to Egypt, it should be asked if it is going to help Ethiopia.
Do read Gelman’s more comprehensive explanation, with highlights of the research.