Higher ground: Concerted efforts to improve flood management infrastructure

Following severe flooding in 2011, the Thai government created an action plan to prevent a water disaster of that scale from occurring again. The authorities budgeted $3.9bn for mitigation efforts, which included new floodways and flood diversion channels. Furthermore, a $2bn programme was initiated to transform farmland north of the capital city into a retention area for holding 10bn cu metres of water. Although expensive, these undertakings were justified, given the massive cost of the floods to the economy.

Unprecedented

The floods were the largest to ever hit the country and resulted from an unprecedented downpour, the most rainfall since Thailand began keeping records in 1901. The effects of the floods hit the economy directly, causing losses of $46bn, and were largely responsible for the country's 0.1% growth in 2011 (down from an originally predicted 3.7%). Worse perhaps was the reputational damage done. The event raised questions about the country’s basic infrastructure and ability to deal with major disasters. A decisive response was necessary to restore confidence and keep multinationals from fleeing to higher ground.

A number of intermediate steps were taken. Independent advisers suggested that the country lower the amount of water behind its dams ahead of flood season, putting the interests of residents downstream over irrigation and power needs. Additionally, the implicated governance structure was greatly improved. Going into the floods, the country lacked a central authority for making decisions during the crisis, the result being a less effective response to changing circumstances. Having learnt from its experience, the government established a National Water Resources and Flood Policy Committee (NWRFPC) to coordinate any future flooding-related efforts. Industry has also devised its own solutions. The Rojana Industrial Park, for example, built 77 km of wall to encircle its grounds and prevent floodwaters from stopping production at its factories.

Ongoing Efforts

Despite the positive moves, some of these preventative efforts have been identified as inadequate for guaranteeing the safety of people and property should the floodwaters return. Indeed, some of the private efforts may ultimately make the situation worse. New walls surrounding industrial estates and communities can lead to flooding elsewhere, simply pushing the water on others less well financed to build their own walls. The nation needed a large-scale coordinated response, and the national government had to spend significant sums to make it effective. This has indeed happened, but the process has faced some issues and it is not clear when the planned flood control measures will be put into place.

In June 2013, nine contracts were awarded for the implementation of the government's flood control plan. Korea Water Resources Corporation (K-water) won two contracts – one for water retention areas and one for a flood diversion channel – worth a total of BT163bn ($5.3bn). An Italian-Thai Development-led consortium was awarded five contracts worth a total of BT109bn ($3.6bn), while the Summit SUT Joint Venture won one contract worth BT13.9bn ($454.5m). The last contract, worth BT3.9bn ($127.5m), went to a Loxley-led consortium for a data and warning system.

Outstanding Questions

While the need for sizable investment in water management is clear, the exact scale, dimensions and emphasis of the project are a matter of debate. The original plan, developed by the NWRFPC, was expanded by the Water and Flood Management Commission, which is tasked with managing the investment projects. In early 2013, an official from the Japan International Cooperation Agency (JICA) told local media that the revised plan was too expensive and that a simpler option could be as effective. Yusuke Amano, the JICA official, said that the original measures proposed, which involved the use of existing dams and called for the building of a 100-km bypass channel, would have been sufficient and cost effective. The current plan, which involves the construction of dams and floodways, is more expensive and much of the planned work may be unnecessary, Amano told local media. JICA has estimated that the original flood control concept would have cost BT190bn ($6.2bn) and would have provided a good internal rate of return; however, the new master plan could end up costing as much as BT500bn ($16.4bn).

Environmental Concerns

In addition to the costs of the project, environmental concerns have also been raised in relation to the government’s plans. As with all large public works, especially those in the energy sector, the water management plan is under intense scrutiny, and its effects on people and land are being analysed. Environmentalists objecting to the plan filed a court challenge on the grounds that the projects would be too harmful to the environment, that they would cost too much, that they would negatively affect the lives of residents in the area and that they were formulated without proper public consent. In 2013, Thailand's Central Administrative Court largely agreed with the environmentalists, saying that public input and environmental assessment were insufficient. The court ruled that the government must delay the projects and gauge public opinion before going ahead.

Public Opposition

In some areas, those potentially affected by the measures are forcefully opposing the flood control plans. In November 2013, during a hearing in Samut Songkhram province on the flood prevention measures, a larger than expected crowd of 10,000 showed up to protest. The discussion turned unruly and the public hearing was brought to an abrupt end, with local residents saying that the flood control plan would make their lives worse. In one case, the government has already altered its plans. In early 2013, it decided not to build one of the dams being considered for flood control. Due to local opposition, the Kaeng Suea Ten Dam, which has been discussed and rejected by the community for years, will not go ahead.

Some activists argue that the goal is less flood control and more irrigation. Others say it is more about business and the economy than water. The contracts are seen as an important source of business for a construction industry that is facing challenges as the economy slows, as infrastructure spending drops and as the number of condominium projects declines. Others are simply worried that, given the size and potential profits generated by the projects, the whole process could get bogged down by challenges and disputes.

First Test

In late 2013, floodwaters returned, with 45 of the country's 76 provinces in the country reporting flooding and a number of factories shut because workers were unable to get to the facilities. In some cases, water pumps were brought in, allowing potential damage to be largely avoided. Although management of the incident was positive, the level of rainfall fell short of that in 2011 and the country and international investors are still concerned that a major flood is a possibility in the future. Coming up with a solution that is both effective and acceptable to the public and the international community is vital for the economy.

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The Report: Thailand 2014

Energy chapter from The Report: Thailand 2014

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