Hi Ray and Marcos,
The project is indeed very big, and I believe it accounts for ½ of total hydro capacity of Norway when completed, whereas Norway is a big hydro country.
I know a bit about the dam, because I must visit Yichang, the site of the dam. I am in Wuhan now, and am actually here to meet the boss of the largest company in Hubei Province where Yichang city and the 3G dam is located. Following are posts where either dams or Yichang are mentioned:0)
Message 14652373
Message 15742669
Message 15853335
Message 16172978
An aside for Maurice, the politically connected boss runs the largest publicly listed fertilizer company in China, and has three things going for him: I know him and deal with him on happy basis over the matter of a captive coal fired co-generation power plant; he has the best natural gas based fertilizer technology; and he has money. Think Trinidad. Think duty-free export to the USA. Think furiously.
On the dam project as an object of investment, I think:
a. Do not do it, because there were lots of China infrastructure bonds still not paid off from 200 years ago;
b. 3D dam management had ran off with billions unaccounted for (no, you did not read about it in WSJ); and
c. Plenty of time to buy the bonds or equity when completion is more complete, and global and China interest yield higher.
On the matter of the news report:
<<… But securities laws are improving in China, with markets in Shanghai and Shenzhen attracting more investors, with the Three Gorges dam the latest possible entrant.
China's domestic markets have already drawn other mega companies such as oil and gas producers PetroChina and Sinopec.>>
Yes and no. No, because the urge to list in China is more due to high PE on domestic market due to massive savings in economy looking for outlet. The same shares on NY and HK exchange sells at less PE.
<<On the flipside, there has also been international outrage at the flooding of the Yangtze River valley that began in 1997 to make way for the project.>>
US inspired intentional or unintentional, coordinated or not, conspiracy to see China forever weak. Ignore protests, because unless the Chinese people say no, no one else has a say. Oops, hegemon wannabe responding to hegemon reality. In any case, a statement of fact, America is fortunate that no one complained much as the Indians were being wiped out and infrastructure then built. There, as far as I know, has not been any reported death in relation to 3G dam relocations.
<<Residents are being forcibly relocated, and environmentalists have bemoaned the loss of some beautiful scenery and sights of historic importance>>
According to a National Geographic report on the project, while relocated folks complain, mostly over compensation level, they also say they are willing and happy to relocate for the good of their kids who are then able to live a better life because of what the dam can bring … cheap power. Poor countries must eat first and worry about the scenery later. Yup, that was a taunt to the environmentalists. The whole scheme is a natural consequence of globalization. Ooh, a taunt to the globalists.
<<The Three Gorges project is also going against the tide in China as it is a hydroelectric project, a stark contrast to the traditional coal-fired electricity companies, and reform in the power sector is still up in the air.>>
Faulty reporting, along the lines of Enron, JPM, cronyism, opacity, nepotism, etc. Yikes, a taunt to the media. Coal prices are rising due to shut down of small coal mines given safety and pollution issues. Hydro is of course the way to go for a country the size of China with the hydro resources it has.
<<"Even in the B share market, most of the electricity companies are coal fired," Jeannie Cheung, China stock strategist with HSBC, told CNN.>>
Nothing to do with anything.
<<"Power sector reform is still uncertain. So the popularity of the stock is unclear. But in the past, they [investors in China] have taken anything with the right price, right?">>
Correct, and investors would certainly know the brand.
<<A large power plant might prove popular with big retirement funds. Once built, energy projects are traditionally conservative investments and much like bonds, guaranteed to throw off regular sales and dividends>>
Correct, one should buy 3G dam only on yield, when the yield is right, and not when Japan interest rate is zero, and US interest rate is close to zero, with China tagging along for the cheap interest ride.
<<Besides hydroelectric energy, the central government said in its last five-year plan that it will drive many homes and businesses to convert to natural gas.>>
This is certainly true, and it seems to me Trinidad could use some Chinese know-how, capital, turnkey experience, downstream investment, per my discussion with Maurice. The plan for hunting of the beast is beginning to take shape in my mind. But, gad, long and hard road in front, with many forks, plenty of traps, and I want somebody else to pay for the exploration. One step at a time.
<<China has a history of massive engineering projects. Besides the Three Gorges dam, it is also currently planning the West-East Pipeline, a gas pipeline that will span the entire breadth of China from Xinjiang province in the west to Shanghai on the coast>>
Reporter left out the plan under discussion to guide southern waters to northern plains. Huge, absolutely huge geo-engineering projects are being considered, just as in the ancient days of grand canals and ocean explorations, and there will be plenty of defaulted bonds later. Too bad they do not print up colourful paper that can decorate the antique shops 200 years later.
To the GS, MSDW, and MER’s of this world, only the volume of the flow is important, and the location of final pooling is less important.
That was fun.
Chugs, Jay |
