With the onslaught of a storm late last year, however, rice fields awaiting harvest were for the first time inundated by floodwaters from the Agno River. What caused the Agno to swell, recalls Elmon Ducyugan, a Kankanaey farmer, was the clogging of a new diversion tunnel where the river has been diverted.

These days, Bolangit residents like Ducyugan feel anxious at the slightest hint of rain. But if there is an exodus of villagers taking place now, it is not because of a fear of floods. Rather, it is because they all have to leave their homes and farms to give way to a massive dam project being constructed in the nearby municipality of San Manuel, and by December, some 78 Bolangit families are expected to have cleared out of the village.

The tunnel that brought floods for the first time to Bolangit last year is in fact part of the dam complex. In some ways, the village's inundation was a portent of things to come. Once the San Roque Dam is completed in about four years, the entire sitio—including lands that have nurtured generations of Ducyugan's clan, as well as those of his Ilocano and Ibaloy fellow villagers—will be submerged forever, obliterated from the province's topography to become the reservoir area for the impounded water.

That is, if the proponents of the $1.19-billion project are able to hold their ground against the rising tide of opposition to the dam. Protests have already given pause to many of its supporters, including those in local governments. They have also caught the attention of both chambers of Congress, prompting the House committee on Ecology and Senate committees on environment and natural resources and public works to initiate separate investigations on the environmental implications and structural safety of the dam.

Among the most vocal critics of the dam are the indigenous peoples in the area who want to stop what they see as yet another example of the government's "development aggression" in self-reliant tribal communities. The Ibaloy people in particular carry with them a history of displacement by dam construction wrought by the government's Agno River Basin Development Program of 1946, starting with the Ambuklao dam in Bokod and Binga in Itogon. While the current anti-San Roque Dam campaign is being spearheaded by the Cordillera Peoples' Alliance (CPA), the movement echoes the age-old call for respect for the Ibaloy's rights to their ancestral lands and self-determination.

The CPA and other groups are also taking courage from the fact since the early 1990s, global resistance among affected communities, environmentalists and human rights groups have effectively challenged—and even stopped the construction—of large hydro projects. Among those that have been cancelled or indefinitely postponed due to public protests have been the Serre de la Fare on the Loire River in France, Silent Valley in India, Arun III in Nepal, Nam Choan in Thailand, and recently Bakun in Malaysia.

The last decade has also seen official support for mega hydropower projects dry up. Even the World Bank, a major backer of dam projects, has been exhibiting "donor-fatigue." Funding an average of 26 dams a year between 1970 and 1985, the Bank funded only four dams in the 1990s. It has also recently collaborated with the International Union for the Conservation of Nature to set up a World Commission on Dams to review the industry's record.

Restrictions on public expenditure imposed by the Bank and the International Monetary Fund through structural adjustment programs further resulted in a cash shortage from public coffers. But even the private sector has proved hesitant to take on what it considers as highly risky undertakings.

These trends have made hydropower a "high risk-low return industry," concludes the Berne Declaration (BD), a Swiss public-interest group, and the Swedish Society for Nature Conservation in their independent review of the hydropower strategy of one of the most competitive hydropower firms, Asea Brown Boveri (ABB), which has been involved in controversial projects such as Bakun, Three Gorges in China, and Maheshwar in India. This then begs the question: What is the Philippines doing with a behemoth like the San Roque Dam?

SHELVED DURING the Marcos era, the flagship project was resurrected in 1994 by the Ramos administration. But construction began only four years later under the new government of President Joseph Estrada with the signing of a Power Purchase Agreement (PPA) between the National Power Corporation (NPC) and a private consortium, the San Roque Power Corporation (SRPC).

The SRPC consists of the Japanese firms Marubeni Corp. (41 percent) and Kansai Electric Power Co. (7.5 percent), and Sithe Philippines Holdings (51 percent), a division of Sithe Energies of the United States. The agreement it signed with the NPC binds it to a build-operate-transfer scheme, in exchange for payment of US$400 million as NPC's contribution to the project, a 25-year concession to operate the dam, and NPC's guaranteed purchase of all electricity produced.

The earth and rock-fill dam—purportedly the biggest in Asia at 200 meters high and 1.13 kilometers long—will have an installed capacity of 345 megawatts (MW). It is primarily designed for hydropower generation, producing 991 gigawatt hours of energy to augment the current national capacity of 12,921 MW, given a growing energy demand that is increasing at an average annual rate of 6.3 percent between 2000-2009. Non-power components include irrigation, flood control and improved water quality for Pangasinan and adjacent provinces in Central and Northern Luzon. The dam's contractors, led by the U.S. Raytheon Ebasco Overseas Ltd., have fast-tracked construction—though already behind schedule by six months now—so that it will be ready for commercial operation in 2004.

Obviously, to its developers, the San Roque dam project is a profitable venture. Interviewed in the online "Engineering News-Record," project manager Robert Resch, maintains that it is "a high-profile, attractive project," the world's largest "ever undertaken in an epic, turnkey, fixed-price contract."

Such confidence is unusual in an industry whose associated high risks have made its projects generally regarded as unattractive investments. If at all, it suggests "a strong likelihood of a high rate of return on money invested," which the Berne Declaration study says is what dam suppliers need to make headway.

Critics suspect the same of the power purchase agreement between NPC and SRPC. They argue that the PPA has ensured profitability of the project to its developers at government's expense by not subjecting it to market disciplines. An analysis of the agreement, in fact, shows it to be economically viable only to SRPC, with guaranteed earnings from the $400 million transfer from the NPC and later fees that are set by contract, which include payment under scenarios wherein no power is produced.

As a study made by Dr. Wayne White of the U.S. based consultancy firm Foresight Associates reveals, the project is not a low cost provider of electricity. A competitive project, White says, should provide electricity at approximately P2 per kWh or less. But sample calculations of monthly billings included in the PPA range from P13 to P21 per kWh.

Critics say the project has other questionable features. Local residents, for instance, worry about their safety since the dam site is 26 kilometers west of a known branch of the Philippine fault zone, the Digdig fault, responsible for the 7.8-magnitude killer quake that devastated most of Luzon in 1990. Indeed, independent technical reviews of the project's Environmental Impact Assessment (EIA) studies commissioned by the activist group International Rivers Network (IRN) have raised similar concerns.

In one study, U.S.-based engineer Tiziano Grifoni even cites an apparent lack of site-specific analysis identifying all the potential seismic hazards. A member of the American Society of Civil Engineers with expertise on structural, environmental and geotechnical aspects of earth and concrete structures, Grifoni expresses doubts whether the design of such a sensitive project like the San Roque dam was based on the recommended maximum credible earthquake (MCE), the most severe level of earthquake, to be able to withstand its effects.

Of late, there is increasing documentation of reservoir-induced seismicity—that dams can induce seismic events such as earthquakes—as a unique risk of hydropower generation. The International Commission on Large Dams says this threat is not limited to areas of high seismicity and can result in dam failure. Though it did not lead to the destruction of the Ambuklao dam, the 1990 quake did much damage, liquefying sediment in the reservoir and blocking the power tunnel and intake, to knock it out of service for a long time.