- The Washington Times - Sunday, September 28, 2003

HONG KONG — A dispute over communist cronyism has erupted in China after the prime minister approved plans to build a dam on a Tibetan holy lake, one of the country’s remaining great wildernesses.

The $315 million hydroelectric project, which protesters say will ruin the lake and threaten endangered animals and plants, will be built by power giant China Huaneng Group, the country’s biggest independent power producer.

The company is run by Li Xiaopeng, the son of the former prime minister, Li Peng, and one of China’s so-called “princelings” who parachuted into positions of wealth and influence thanks to their family connections.

Li Peng, known for ordering the Tiananmen Square massacre in 1989, was also the driving force behind China’s Three Gorges Dam, which has been blamed for causing environmental devastation and the forcible removal of almost 2 million people.



Reformers within the Communist Party had seen the latest dam as a test of how far the new leadership, under Prime Minister Wen Jiabao, would challenge vested interests and charges of government corruption.

But after a two-year battle, Huaneng has been given approval to build the dam on Mugecuo Lake, known to Tibetans as Yeti Lake, which is home to pandas, snow leopards and the buffalo-like golden takin — believed to have inspired the Golden Fleece myth — in addition to rare plants.

“We have spent two years and repeatedly lobbied the central and provincial governments about this, but it has all been for nothing,” a leading Chinese environmentalist said.

“When we were told that the project was going ahead, we were warned to drop the matter and to publish no more articles. “This is about political power. The fact is, this is about Li Peng’s son.”

Mugecuo Lake lies at the heart of Ganzi, a remote district that is part of the Tibetan Autonomous Region. The area is admired by scientists and ecologists for its unique habitat and scenery but is notorious for earthquakes.

While Huaneng argued that the dam would bring prosperity to a poverty-stricken region, local Tibetans — who risk jail or execution for dissent — and Chinese scientists appealed in vain to the Beijing leadership to stop the project.

There has been increasing unrest in China over the business interests of its political dynasties. While former President Jiang Zemin’s relatives dominate the telecoms sector, Li Peng’s are the biggest players in the energy industry.

Although Li Peng retired this year, he still exerts an iron grip over the nation’s lucrative power grid, thanks to deregulation and privatization.

His wife, Zhu Lin, is believed to control a lucrative listed offshoot of Huaneng while his daughter, Li Xaolin, is the vice president of the international investment and financing arm of China Power, another energy giant.

One of Li Peng’s proteges, Gao Yan, the head of the State Power Corp., is believed to have fled China last year to avoid a corruption probe.

Huaneng’s plans for the lake emerged in 2001 when, after two government reviews refused to give it the green light, the State Environmental Protection Agency approved the project.

One official familiar with the negotiations said: “Because Huaneng is so powerful, there is a lot of political prestige at stake and none of the officials wanted to come outright and say no.”

Although details have been kept secret, it is believed that the dam will be 210 feet tall and cover large amounts of primeval forest. In time, Huaneng is believed to want to create a series of interconnecting dams in the area.

One Chinese scientist who has studied the project closely believes that the damage caused by the dam and the risk of earthquake-induced flooding are incalculable.

“Ganzi is what we call a bio-hotspot and is set in one of the most biologically diverse places in the world,” said the scientist on the condition of anonymity.

“The larger environmental impact will happen downstream, however, because the whole valley and vegetation will disappear and the animals will disappear with it. But the reason most local people feel uncomfortable is because this is an earthquake area and they have decided to build a reservoir above a river that runs right through [the local capital] Kanding.”

Kanding became the focal point for opposition to the dam this year, as residents complained about the lack of formal debate or consultation over the scheme.

Neither China Huaneng nor the government would comment.

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