To: World Commission on Dams
From: Kou Reming, Vice President and CFO of Yangtze Power Company
Our company, Yangtze Power Company, is the entity responsible for supplying energy to the region. We agree with the government officials that the Three Gorges Dam will greatly assist in the sustainable development of China. We urge you to consider the following factors when you write your case study report:
- Yangtze Power Company main responsibility is to make sure that China’s energy needs continue to be met as the country grows and prospers. We must do everything possible to make China energy efficient.
- We realize that there were some hard environmental choices to make when considering the Three Gorges Dam. However, we were impressed with the exhaustive work of the Canadian feasibility study team and agree with their assessment that this dam was the best option for the country. Environmentalists agree that hydroelectric power is much preferred over coal and other nonrenewable sources of power. Not only do we have a renewable energy resource for years to come, but the quality of our air will be preserved at the same time.
- At Yangtze Power Company we are aware that some opponents of the dam have been pushing alternative energy sources such as solar and wind power. However, it is our opinion that these alternative sources will not be enough to meet China’s energy demands. Only a dam the size of the Three Gorges Dam seems logical when China’s future needs are taken into consideration.
- We must look at the financial costs of building the Three Gorges Dam. Yes, this dam is very costly. However, if we had waited another ten or fifteen years from now and decided to build the dam then, would be even more costly. With the assistance of loans from countries throughout the world, can have arranged to pay back our loans over several years. The profits generated from the dam will allow us to quickly repay our creditors. We believe our rates to be the lowest in China -- and proof that the other Three Gorges hydropower generators will be offering a similarly competitive tariff compared to coal power stations.
- We will bring generous cash dividends to our shareholders, not like some listed companies which give investors nothing but a pile of paper by issuing new shares recklessly." When all 26 sets of generators are in operation by 2009, 84.7 billion kilowatts, or 100 billion kilowatts of electricity will be generated in a year, or approximately 5 percent of forecasted national consumption. The Yangtze Electric Power estimates that it will generate over $3 billion each year in profits.
- Construction has so far been smooth and I maintain that strong support from the state will make sure that all the jigsaw pieces fall into place. The Three Gorges project has been following a strict timetable for the last nine years. It will bring enormous benefits to shipping and flood prevention. No quality problem has occurred in the construction and the budget is well under control. Judging from the current progress, the total investment for the project will not surpass RMB180 billion, 20-plus billion less than the original budget.
- We do regret the fact that over a million people will have to be resettled because of building the dam. However, we have worked with the local residents and the Chinese government officials to make the transition to their new land as smooth as possible. Also, locals who wish to do so are welcome to apply for job training to help construct and operate the dam. As the region’s official energy supplier, we must search for the best energy solutions for the entire country; however, we will work with the local people so their lifestyle is disrupted as little as possible.
Yangtze Power Company is excited about our role in China’s energy future. By building the Three Gorges Dam and successfully operating it, we will generate even more opportunities for improvement loans from outside lending sources. In addition we feel with this success, China has become a model for other developing countries to follow.