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Archive for December 4th, 2008

Uganda Dam Slammed by World Bank Appeals Body

Posted by African Press International on December 4, 2008

Bujagali deal full of risk for one of world’s poorest countries

The benefits of the Bujagali Dam project, now being built by private companies on the Nile River in Uganda, have been overstated and its risks understated, according to a 17-month investigation by the World Bank Inspection Panel.
Worse, most of these risks fall on Uganda — one of the world’s poorest countries — rather than
the project developers. The result could be a project that fails to fulfill the Bank’s “broad objective of sustainable development and poverty reduction embodied in Bank policy,” the Panel states.

Graham Hadley, the Panel’s economic consultant on the Bujagali case, notes that “the greatest share
of economic risks lies with the power purchaser S In effect, the lenders especially but also the
investors are held harmless against all or most eventualities.” He states that the World Bank did
not address a “crisis of non-affordability in Uganda such as might be produced by currency devaluation or very low hydrology. Personally, I would have preferred S to see terms more favorable to the purchaser.”

Project costs have risen dramatically since the deal was sealed, and the Panel worries about the
costly dam’s impact on tariffs in a nation where only a small percent of the population can afford

Hydrological risks — including the potential for the dam to harm Lake Victoria, as existing
upstream dams have done, and for its electricity output to be diminished by climate change —
compound the project’s economic risks. The Panel says that the Bank has not properly addressed the
effects of climate change and the cumulative effects of multiple dams on the Nile.

Groups monitoring the project say the deal must be reworked to take some of the risk off Uganda.
Frank Muramuzi, Executive Director of the National Association of Professional Environmentalists (NAPE), said: “The Panel has ably reported that this dam could cost Uganda more than it’s worth. The power purchase agreement between our government and the project developer will drain the national treasury and take away important resources for other social and economic services, making the citizens poorer than they already are.” NAPE filed the claim with the Inspection Panel that resulted in this report.

NAPE is calling for a more balanced allocation of risk; a high-quality plan for addressing
economic, environmental, compensation and resettlement problems, and an open and transparent process for protecting Lake Victoria from excessive outflows. The project developer should also be required to take out climate-risk insurance, the group says.

Lori Pottinger of International Rivers said: “This project is a bit like the recent bailout for Wall Street – golden parachutes for the dam developers while Ugandan taxpayers will have to shoulder the costs for problems it causes. In its zeal to build this flawed dam, the World Bank is undermining its mission to alleviate poverty, and gambling with Uganda’s future.”

The Panel’s report is to be discussed by the Bank’s Executive Board on December 4; only after that will it (and management’s response to it) be made public. But those who have seen both documents report that Bank management dismisses virtually all of the Panel’s findings, proposing an “action plan” which lists no actions the Bank was not already planning on taking. The Board will have to decide whether to demand a more conscientious response from Bank staff to the Panel’s report, or to join the staff and
management in dismissing the highly respected Panel and the roster of experts it employed specifically for this investigation.

– “As it stands, the net benefits of the project could be substantially less than Bank Management
has claimed.”
– “The Panel observes that the high allocation of risk [to the Government of Uganda] increases the
possibility that the project may not achieve the broad objective of sustainable development and
poverty reduction embodied in Bank Operational Policies.”
– “The Panel did not find evidence … of any estimates of the economic impact of the Project
on low-income households… It might be argued that a smaller, lower-risk infrastructure project
would have been a better place to start.”
– “The effects of climate change and the cumulative effects” of multiple dams on the Nile “have not been properly addressed” in project documents.
– The project “is facing substantial problems in measuring, monitoring and mitigating livelihood
risks, especially among vulnerable peoples. The Panel finds that the Project is in non-compliance
with the mandate of Bank Policy on Involuntary resettlement to improve, or at least restore, the
livelihoods and standards of living of the people displaced by the project.”
– “In a country where only 5% of the population is connected to the grid and there is widespread
poverty, it would be reasonable to expect attention be paid to small and/or distributed generation options (not only hydro) which might in theory more directly address local and rural poverty.”
– “The winning bid price was significantly lower than the next best, but between the time the
contract was awarded and the formal price was fixed, there was an increase of 28%.”

Background on Bujagali
The dam is being developed by Bujagali Energy Limited (BEL), a consortium between Industrial
Promotion Services (IPS) of Kenya (a division of the Aga Khan Fund for Economic Development), and
Sithe Global, a US power company now 80% owned by the Blackstone Group. The dam is being built by
Italian firm Salini. The project is expected to take up to 44 months to construct.

Project financing: Of total development costs, the AfDB is lending $110m. Another $360m will be
provided by the World Bank Group (the International Finance Corporation is providing a $130m loan to BEL; the International Development Association is providing $115m for the project’s commercial lenders; and an investment guarantee of up to $115m is to be supplied by the Multilateral Investment Guarantee Agency). The European Investment Bank will lend $135m.

A post by Lori Pottinger, International Rivers, California:

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‘Toxic’ syrup kills Nigerian babies

Posted by African Press International on December 4, 2008

At least 34 babies have died in Nigeria after being administered with a locally made teething mixture.

Six more child deaths were recorded on Wednesday, on top of 28 reported last month in three locations after being given “My Pikin”, a teething syrup contaminated with diethylene glycol, which is blamed for causing kidney failure.

The latest deaths were recorded at one of Nigeria’s oldest medicine training institutes, the Ahmadu Bello University Teaching Hospital in Zaria, the state-run food and drugs regulatory agency said.

Dora Akunyili, the agency’s director-general, said that laboratory analysis had revealed that diethylene glycol was the suspected cause of the deaths.

Babieswho took the drug exhibited fever, diarrhoea, vomiting and inability to pass urine.

“The children died in spite of dialysis treatment because the kidneys were already damaged,”Akunyili said.

She said that her agency, the National Agency forFood and Drugs Administration and Control (NAFDAC), was making every effort possible to address the problem, including urgently importing an antidote and pulling the tainted medicine off the shelves.

Toxic syrup

Akunyilisaid the NAFDAChad visited 1,675 drugs outlets, pharmacies, patent medicine stores, market stalls, clinics and hospitals, where 425 bottles of “My Pikin”were recovered.

The agency has shut down Barewa Pharmaceuticals, the Lagos-based manufacturer of “My Pikin”, as well as a company called Tranxell Ltd, an un-registered firm that supplied chemicals to Barewa and other local drugs and textile manufacturers.

The agency isalso trying totrack down the main importer of thechemical used in making theteething mixture.

More than 40 children aged between four months and three years have been hospitalised since the first case was discovered on November 3.

Health officials believe the number of cases could be higher as many parents in Africa’s most populous country do not have access to basic health care for their children.

NAFDAC started testing more children’s drugs last week for fear that different brands of cough and teething medicine may also have been contaminated with the toxic chemical.


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US seeks to defuse S Asia tension

Posted by African Press International on December 4, 2008

Condoleezza Rice, the US secretary of state,has appealed to Pakistan to mounta robust responseto last week’s co-ordinated attacks on Mumbai.

The chief of the US military, Admiral Michael Mullen,travelled in the opposite direction to Rice, arriving inNew Delhifor talks on Thursday after visiting Pakistan.

In Islamabad on Wednesday, Mullen urged Pakistani officials to “investigate aggressively any and all possible ties to groups in Pakistan” and “take more, and more concerted, action against militant extremists elsewhere in the country”.

For her part, Rice called on Pakistan to give its “full co-operation” and show transparency in finding those responsible for the attacks on India’s financial capital.

Relations between India and Pakistan have been brought into sharp focus since the attacks on two luxury hotels, a railway station and a Jewish religious centre, with New Delhi accusing Pakistani individuals of being involved.

At least 171 people were killed and more than 300 injured in the assault.

‘Very focused’

“I found the Pakistani leadership very focused and committed to act,” she said after talks with Asif Ali Zardari, the Pakistani president, and Yousuf Raza Gilani, the prime minister, and senior armyofficials.

Zardari promised Rice that his government would take “strong action” against Pakistani elements found involved in the attacks.

“The government will not only assist in investigation but also take strong action against any Pakistani elements found involved in the attack,” an official statement issued after their meeting said.

“It just has to be a robust response and one that is effective” in bringing the attackers to justice,Rice said.

“But I’ve also been emphasising the importance of prevention here.

“The Pakistanis are sophisticated; they’ve been dealing with terrorism themselves for some time. So I’m going there to talk about a Pakistani response, not to carry messages.”

Ricemet Pranab Mukherjee, the Indian foreign minister, after arriving in New Delhi on Wednesday, before going on to meet Manmohan Singh, the country’s prime minister.

Security alert

Against this backdrop of rising tensions, Indiahas put all its major airport onhigh alert,in response towarnings of possible attacks using hijacked aircraft.

The government had ordered extra checks to vehicles and luggage after warnings from intelligence agencies, officials said on Thursday.

Local television showed armed police guarding entrances to Delhi’s international airport. Police cordons had also been set up outside the airport in the southern industrial city of Chennai.


The developments comea day afterthousands of people held a vigil in in Mumbai,close tothe Taj Mahal Palace hotel, whereone of the bloodiest attacks occurred.

Many of those at the vigil say thatneighbouring Pakistan is responsible for the attacks.

As the remembrance event went ahead, the head of the country’s counter-terrorism force said that Mumbai police had found and defused two bombs.

The explosives were found hidden in a bag at the Chhatrapati Shivajirailway station on Wednesday, a week after it came under deadly attack by armed men who also targeted several other buildings in the city.

While searching 150 bags at the station, police found one that looked suspicious and called the bomb squad. They found two bombs of 4kg each inside and defused them, police said.

“This is part of the same consignment which the terrorists had brought on Wednesday night [a week ago] when they were attacking and running helter-skelter, some of the material had been left behind,” KP Raghuvashi, India’s counter-terrorism chief, said.

Pakistan ties

Indian investigators have said the Mumbai attacks were carried out by Lashkar-e-Taiba,a Pakistan-linked group.

Mukherjee said on Tuesday that New Delhi had asked for ‘the arrest and handover of those persons who are settled in Pakistan and who are fugitive of Indian law”.

Some opposition groups in Pakistan have reacted angrily to India’saccusations [EPA]

India believes some of the 20 had links to other attacks in India, most notably the attacks on parliament and commuter trains.

Pakistan hassaid it will “look at” the list of names and “frame a response”.

Mukherjee also said thatNew Delhi is not considering military action in response to the latest attacks in Mumbai.

“Nobody is talking of military action,” Mukherjee said when asked about options on what action could be taken.

Mukherjee said that peace talks with Pakistan, a process which started in 2004, would be difficult to continue after the attacks.

“We have no intention of not carrying out the peace process,” he told theIndian news channel NDTV.

“If these incidents … are not adequately addressed by [Pakistan], it becomes difficult to carry out business as usual and that includes the peace process.”

India’s foreign ministry hassaid that New Delhi summoned Pakistan’s high commissioner to inform him “that the recent terrorist attack on Mumbai was carried out by elements from Pakistan”.

But Pakistan’s government denies any links.


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