ESTIMATION OF NET BENEFIT FROM THE PROPOSED BAN LA HYDROPOWER PROJECT IN NGHE AN PROVINCE, VIET NAM NGUYEN THI HOANG HOA A thesis submitted in fulfillment of the requirements for the degree of Master of Environmental Management in Development planning Faculty of Social Sciences UNIVERSITI MALAYSIA SARAWAK 2005 ACKNOWLEDGEMENTS: Firstly, I would like to thank DANIDA funded WaterSPS Subcomponent 1.3 support to Capacity Building atthe Hanoi Water resources University (HWRU), Vietnam for the sponsorship of my study wish to express my appreciation and gratitude to those who had helped and supported me inthe project that leads to this dissertation [ wish to thank my major supervisor, Assoc. Dr Gabriel Tonga Noweg, for his guidance ‘throughout my study at Unimas. From him and his guidance, Thave gained much knowledge and experiences, which I will pass on in my own future [also wish fo thank all my lecturers in Unimas for their assistance and advice, I would also lke {o thank Me Robert Malong for his help during my Master Course. am also grateful to my co-supervisor Dr Ngo Thi Thanh Van (HWRU) for her kind and valuable assistance during my data collection in Vietnam, Lam indebted to all the officers in the DANIDA and HWRU Bourd, Power Engineering Consulting Company No 1 (PECCI), districts officials of Nghe An province, Insitute of Water resources planning (TWRP) and’ Aquatic Product Research Insitute, Do Long weir manager, Nam Dan sluice manager, Department of Agriculture and rural development of Nghe An province, National Central Meteo-Hydrology Forecast (NCMHF), and local people inthe ton districts of Nghệ An province, Thank you for ‘your friendly nd warm assistance during my field tp.
‘My special thanks go to my husband and my children, who love me enough t0 let me go and study abroad. Thanks for their endless support and encouragement during the coursework and ‘completion ofthis dissertation. ‘TABLE OF CONTENT Acknowledgment “Table of content List of tables Lis of figures Abbreviation Abstract Astral (CHAPTER L INTRODUCTION. Beonomy of Viet Nam.
Demand of energy in Viet Nam. 13 Power development plan 2003-2020) 14 General lood contol in Vit Nam. 17 Objective 18 Significof ance study (CHAPTER IL LITERATURE REVIEW 2. Approach in sustainability development of reservoir for multiple uses 23.
Cost-benefit analysis (CBA), 23.1 Introduction 232 Cost Benefit Analysis (CBA) of dams.1 Environmental cost-benefit. 2322 Social impact mitigation cost 232.3 Flood contol eowebenefitx 232.4 Imgation costs and benefits (CHAPTER IIL MATERIALS AND METHODS. À1 Inoduction, 32 Study area 321. Humidity 328 River flow 320.
Soil classification and soil erosion.1 Private costs and benefits 332 Public costs and benefits 34 Data collection 34.1 Primary data collection. 342 Secondary data collection, 35° Contingeat valuation 536 Flood contsol cost estimate 3.1 Calculation principles for flood contol cost.62 Link between damage cost and return period 3.63 Cost of the energy loss A7 Data analysis CHAPTER IV. RESULTS AND DISCUSSION 41 Inoduction 42. Private costs benefits, 42.
Construction costs 422 Operation and Maintenance Costs 423° Resettlement cost. Public costs and benefits. Flood control costs and benefits.1 Flood conteal cos 43.12 Flood control benefits.2 _Imvigation costs and benefits 4321. Imgation costs, 44 Environmental and social costs and benefits 44.1 Loss of potential timber production.
4412 Loss of land.13 Loss of existing agricultural production 44.15 Loss of bidiversty 44.16 Loss of existing fishing income 44.7 Loss of existing hunting income 44.18 Loss of revenue of existing collection of forest product 44.19 Disruption of existing River tanspertation 44. Fishoties in Ca River, 4423 Potential for tourism.5, Employment opportumties fr local people 4426 Road access. 45 Cost benefit analysis ofthe project. Economic evaluation parameters 453° Sensitivity analysis, CHAPTER V.
CONCLUSIONS AND RECOMMENDATIONS. Recommendation REFERENCES, 75 APPENDIX A s0 SOIL MAP, SOIL EROSION POTENTAIL MAP AND LAND USE MAP. APPENDIX C 98 SURVEY QUESTIONNAIRES. APPENDIX D 105 CONTINGENT VALUATION FOR ENVIRONMENTAL, 105 PARAMETERS.
109 (COST: BENEFIT ANALYSIS, 109 APPENDIX F. 134 PICTURES OF THỊ STUDY AREA DURING THE 134 LIST OF TABLES Page Table 1 GDP growth, GDP per capita and Population of Viet Nam from 1995 402003 rable L2 “The power generation capacities by energy sources.1 Benefit of flood control of Klang river basin flood mitigation project Table22 Key dimensions and key impacts of access to good irgation water 2» ‘Table 3.1 Land use in Ban La catchment and reservoir area 36 Table 32 Sell types of Ban La catchment area ‘Table 34 Potential erosion in Ban La catchment area, Table 34 Dita need and data collection method, Tablet ‘Consteuction cost of Ban La dam, Table42 Initial investment costs, annual operation and maintenance cost in percentage and value Tables 3 Basic data of Ban La hydropower project Tables Damage cost of historical ood events Tables 5 Flood damage Vs rum period Table 46 ‘Flood routing by Ban La reservoir Table 47 Irrigated area anl discharge of Do Luong system from Ca river Table 48 Ifvigated area and discharge of punging stations direct from Ca river inthe NNAIS Table 49 Inrigated area and discharge of Nam Dan system from Ca Table 4.10 Ifvigated area and discharge of pumping stations direct from Ca river in the SNAIS. 11 Inrigated failure in che Future without Ban La project.12 igatel Edlur in the Future ater completed Bạn La project Table 4.13 fective imigated area Tabled M4 Annual benefit fom imigaöon i the area LIST OF TABLES (CONTINUE) Table 4.15 Forested area permanently flooded alter creation ban La 6 Table 4.16 Estimation of timber loss nthe reservoir area 6 Table 4.17 Esimadion of land loss by Ban La projec (current value) Table 4.18 Estimation of annual agricultural production loss Table 4.19 Average standing volume (or stock) of the forest Table 4.20 Estimation of timber can be harvest inthe reservoie area Table 421 Metchantable of timber in the reservoir area Table 4.22 “The water level along Ca river before and after construction Ban La project 1 Table 4.23 'Condmuetion period criteria n Table 4.24 ‘Cost disbursement for Ban La hÿđropower project 18 Table 4.25 Basic data for economic assessment of Bạn La hydropower project, (PSL= 200m; P = 320 MW: 5 years construction time and 10% discount rate 1 Table 4.26 Result of cost benefit analysis of Ban La hydropower project discount rate = 10. ‘Table 427 'Resls of sensitivity analysis with changes in discount rate, output and lifespan of the project 2 LIST OF FIGURES Figure 31 Location ofthe study area igure 32 Total cost and total benefits Figure 4.1 Hydraulic network scheme LIST OF ABBREVIATIONS Percent ADB Asian Development Bank APRI Aquatic Product Research Insite Bic Benefil cost BVND Billion Vietnamese Dong.
CBA Cost Benefit Analysis CVM Contingent Valuation Method DARD Department of Agriculture and Rural Development Environmental Impact Assessment Forest Inventory and Planning Insitute Pall Supply Level Gross Domestic Product Gigawatt hour Heetre HPM Hedonic Price Method wp Institute of Agricultural Planing Institute of Enersy Institute of Geography Intemal Rate of Return Institute of Water Resoures Planning Kilogram Kilometer Square Kilometer Kilowatt Kilowatt hour per second Millimeter Square meter Cubic meter CCubie meter per second Ministry of Agriculture and rural Development Million cubie meter LIST OF ABBREVIATIONS (CONTINUE) MVND Million Vietnamese Dong No Number NNAI North Nghệ An Iigation System National Bank Net Present Value Operation and nuintenance Probability Power Engincering Consulting Company 1 Discharge South Nghe An Inigaion System “Travel Cost Method. ‘ail Water Level US Can: Us Dollar Vietnamese Dong World Bank: Wood Equivalent Willing To Accept Willing To Pay Year ABSTRACT ‘The construction and operation of Ban La hydropower project will lead toa variety ofchanges in the local and wider environment, Many ofthe impacts will be beneficial, both atthe regional and ational eve, Project implementation will have some socioeconomic impacts an communities in two districts upstream and nine distiets downstream feom the dam. Completion of Ban La ‘project will supply water to tho inigation systems: North Nghe An Krigation System and South [eh An, which comer sme 62.220 hao gated are in Nghe An province. The construction of the project will also reduce flood peak inthe downstream area and hence reducing flood damages for riverine residents the downstream area.
This study evaluates economic and cavironmental impacts of Ban La project on local communities: upstream of the Ban La dam: food arc and iigation areas downsicam from the proposed dam, Private costs and bensits 4s wll as publi costs and benefit are estimated for the project i order to ave atthe total et social benefits, Contingent Valuation Method (CVM) is wed to estimate the costs and bensftx associated with intangible em or non-market goods. The quấy foun tha the net present vale f social benefits at 105 discount rate and 30 years project operation perio is positive (BVND 5338), Benefi-Cost ratios 3.18 and Itemal Rte of Return (IRR) i 115%, Sensitivity analysis is also performed to detect responsiveness of the investment to changes in discount ate, changes ‘output ofthe project as wel as diferer scenarios of project lifespan, Abstrak Pembinaan enpangan hidro Ban La dijangka akan membawa berbagai Kesan, terwamanva Jfaedah terus dan juga sampingan kepada pendudu setempat hasnya. Kesan sosiockonomi akan cAbasai di dua bai daerah (Tuong Duong dan Ky Son) dibahagian hulu empangan dan juga 9 Abstrak Pembinaan enpangan hidro Ban La địmgÌa akan membawa berbagai kesan,teramansa fda ters dan juga sampingam kepada penduduk stem Khasny. Ketan ssiockonomi akan Airasai di dua banh daerah (Tong Duong đan Kỳ Son} dibahagian hulu empangan dan juga 9 dlaerah di kawasan hilir empangan.
Antara faedah yang akan dinikmat alah dalam bentuk emudahan sistem pengairan (North Nghe An Irrigation dan South Nghe An irigation) yang ‘meliput 62220 hekior tanah pertanian. Kajtan yang dijalankan ii adalah berujuan untuk Imenitai kesen pembinaan empansan Ban La dari sexi kesan sosioekonominya, Analisis pelaburan dijadikan axas penilaian ini dimana segala clomen facdas dan kos diambil kim Facdah dan kos barangan sumber adi dan alam sektar diniat dengan Kaela penilaian Kontnjen. Hasi kajian mendapat pro mempunyai nil facdah sosial ini bejlunlah BVND 5838, Naônh faeda-kos pelauran ini adalah 3.18 dan kadar pulangan dalam adalah 11%. fi Dermaksud proj tersebit adalah baik dạn berypaya memberi sunbangan posit kepada sosioekonom pendiduk tenpalen.
Economy ofViet Nam ‘Viet NanŸs modem economy evolves fom the burden of mỹiary ation and political upheavals ter parition in 1954, Nonh Viet Nam and South Viet Nam each developed thet own economic sericture separately, reflecting diferent economic systems with different resources and diferent tdling patterns, The North operated under highly centralized and planned economy, whereas the South maintained a fee: market economy. With the reunification of Viet Nam in 1976, Noth ‘Viet Nam's centrally planed and controlled economy was introduced and adopted in the south of Viet Nam, Sinee 1986, the “innovative” and “opened-sdooe” policy practiced by the Vietnamese Government tas attracted foreign investors to came to do businesses and promote both the state and private seononie elements, which spur the economic development of Viet Nam It has changed tothe ‘market-oriented cconomy since then, Having a stable political regime, the Gross Domestic Product (GDP) growth rate of Viet Nam from 1991 to 2002 has reached an average igure of| 1. GDP per capita of Viet Nam was USD 490 in 2003. The GDP per capita and its population growth from) 1995 o 2003 i shown in the Table 1.1 GDP growths, GDP per capita and Population of Viet Nam from 1995 to 2003.
Demand of energy in Viet Nam The economic growth in Viet Namis strongly indicated hy the increase in the demand for cnery, Electricity generation plans in Viet Nam at presen ate fom petroleum, natural gas, hydropower, coal and diesel However, the dependence on il or clee0i<iy generation has dckined signilicanly in recent yea, The Viet Nam govemment's pliy i to encourage the exploitation ofrenewable energy resoures, such as hydropower. ‘The peak electricity demand recorded in 2002 was 8,700 MW, while the total capacity of all kinds of power plant connected te the network was 8,749 MW. The electricity generation comprises ofthe following (Table L2).