Strategy For The Environmental Valuation of Sungai Sepang Dam Project

Strategy
for the
Environmental
Valuation of Sungai
Sepang Dam Project
An Environmental Valuation Strategy by Doublemint Dams Pvt Ltd
This document is prepared for the hypothetical scenario of creation of a dam in Sungai Sepang.
This is prepared as part of the submissions for Assignment 1, Economics of Renewable Energy.
This report was prepared by Arvindran Subramanian.
“Eventually, all things merge into one, and a river runs through it. The river
was cut by the world's great flood and runs over rocks from the basement of
time. On some of the rocks are timeless raindrops. Under the rocks are the
words, and some of the words are theirs. I am haunted by waters.”
―( Norman Maclean, A River Runs Through It and Other Stories)
“Water has become a highly precious resource. There are some places where a
barrel of water costs more than a barrel of oil. “
— (Lloyd Axworthy, Foreign Minister of Canada, 1999 News Conference)
“Of all our planet's activities—geological movements, the reproduction and

decay of biota, and even the disruptive propensities of certain species
(elephants and humans come to mind)—no force is greater than the hydrologic
cycle. “
— (Richard Bangs & Christian Kallen, River Gods)
“Choosing to save a river is more often an act of passion than of careful

calculation. You make the choice because the river has touched your life in an
intimate and irreversible way, because you are unwilling to accept its loss”.
— (David Bolling, How to Save a River: Handbook for Citizen Action)
“If you could tomorrow morning make water clean in the world, you would
have done, in one fell swoop, the best thing you could have done for improving
human health by improving environmental quality.”
— (William C. Clark, April 1988 Speech in Racine, Wisconsin)

Table of Contents
Introduction. ............................................................................................................................... 5
Executive Summary: .................................................................................................................... 6
1 : The Lifecycle and Impacts of the Sungai Sepang Dam ............................................................. 7
1.1: Aesthetic Value: .......................................................................................................... 9
1.2: Recreation Value ...................................................................................................... 10
1.3: Income Value ............................................................................................................. 11
1.4: Biodiversity Value ..................................................................................................... 12
1.5: The Dam Lifecycle : Construction Phase ............................................................. 13
1.5.1: The removal of palm oil plantation and the clearing of land for the
construction site ........................................................................................................... 14
1.5.2: Noise pollution to the environment ................................................................ 15
1.5.3: Greenhouse Gas emission ............................................................................... 15
1.5.4: Pollution to the downstream of the river ....................................................... 15
1.6: The Dam Lifecycle : The Operation Phase........................................................... 16
1.6.1: Erosion and Sedimentation ............................................................................. 16
1.6.2: Nutrient and pH Value ....................................................................................... 17
1.6.3: Fish Diversity and Salinity Intrusion .............................................................. 17
1.6.4: Flooding ............................................................................................................... 17
1.7: The Dam Lifecycle: The decommissioning of the Dam ..................................... 18
1.7.1: For Keeping the dam, the goals that we have to fulfill is .......................... 20
1.7.2: On the flipside, for removing the dam, the goals we have to fulfill are: . 21
2: Environmental Impact Valuation. .......................................................................................... 23
2.1: Opportunity Cost Method ........................................................................................ 23
Advantages, limitations and disadvantages ........................................................... 23
2.2: Hedonic Cost Method............................................................................................... 24

2.3: Avoidance Cost Method .......................................................................................... 24
2.4: Contingency Valuation Method .............................................................................. 25
3: Survey/Analysis Design .......................................................................................................... 26
3.1: Noise Survey Design ................................................................................................ 26
3.1.1: Magnitude of noise emissions ........................................................................ 27
3.1.2: Variation of noise as a function of time of day ............................................ 27
3.1.3: Analysis of intermittency ................................................................................. 27
3.1.4: Analysis of tonal content ................................................................................. 27
3.2: Net GHG Analysis Design ....................................................................................... 28
3.2.2: Post-impoundment Considerations ............................................................... 29
3.2.3: Measurement Techniques ................................................................................ 29
3.3: Opportunity Cost Analysis Design ........................................................................ 31
3.4: CV Survey ................................................................................................................... 32
3.4.3: Survey Design ............................................................................................................. 34
4. CVM Questionnaire ........................................................................................................... 37
5. Scope of Work ....................................................................................................................... 42
5.1: Scope of Work for Environmental Consultant ................................................................ 42
5.2: Scope of Work for Opinion Pollsters .............................................................................. 43
6. Conclusion............................................................................................................................. 45
Works Cited .............................................................................................................................. 46
Reflection on the Assignment.................................................................................................... 51
Minutes of Meeting................................................................................................................... 52
Introduction.
“The 2014 Negeri Sembilan and Selangor water crisis was a water crisis that began in
the Malaysian states of Negeri Sembilan and Selangor and lasted from February to August
2014. Its roots can be traced to hot and dry climactic conditions in Peninsular Malaysia in
early 2014, but other factors, including water infrastructure problems and political deadlock in
negotiations between the government and private water concessionaires also played central
roles.”
The Selangor water crisis has affected upwards of 6.7 million people in the state of Selangor,
and caused millions of ringgits worth of losses to businesses. The Sungai Selangor Dam
reached critically low levels of water, roughly at 31% of maximum capacity as rivers
supplying the dam dried up due to El Nino induced drought. The Sungai Selangor Dam
supplies close to 60% of the states water demand.
The Selangor state has proposed for the construction of a dam and reservoir on Sungai
Sepang, with hopes of adding 60,000 million liters of water to the states water supply. The
proposed dam will be created near the area of Taman Serbau, and the palm oil plantation
adjacent to the land will be repurposed into a reservoir. The proposed reservoir will be dug
out of the ground, as geographically there isn’t a traditional valley formation to serve as a
natural reservoir. The river will be diverted into the reservoir via the dam, and the overflow
will be released downstream, effectively diverting the path of the river over a distance of few
kilometers.
The project will be controversial, and the State of Selangor is looking into to do an
environmental valuation of the site as well as the costs and benefits of the environmental
impacts on Sungai Sepang. The environmental consultation company Doublemint Dams are
hired to carry out the preliminary environmental valuation work.
Executive Summary:
This report will examine the methods used to value the Sungai Sepang River, as well as
methods to establish monetary values for the various associated environmental impact. The
main asset in question in this report is the Sungai Sepang River. The goods and serviced
provided by the river are evaluated in terms of direct use, indirect use, altruistic and
existence, and non use values. Additionally the impacts of the construction of the dam,
operation of the dam and the decommissioning of the dam is also taken into consideration.
Benefits from the creation of the dam and the reservoir is taken into account as well, hence
giving the total environmental cost/benefit as :
∑ Costs of Environmental Resource Change + ∑ Costs of Impacts of Constructing the Dam

+ ∑ Costs of Impacts of Operation of the Dam + ∑ Costs of Impacts of Decommissioning of
the Dam – ∑ Benefits gained from the addition of an environmental resource = Total
Environmental Costs of Benefits.
∑ERC + ∑IC + ∑OC + ∑DC - ∑BG = TEC or TEB(if negative)
The final value(TEC,TEB) is then adjusted(compound interest rate as decided) to the life
expectancy of the dam, and then discounted(at agreed discount rate) back to get the
environmental costs at present value. This value ATEC or ATEB, is the final costs of the
environmental impact of the project.
Various methodologies are employed to collect the data, mostly from a revealed preference
and stated preference standpoint. Revealed Preference was used for the estimation of
values that can be readily observed and quantified, whereas Stated Preference was to
estimate values that people place on an environmental asset. All the proposed
methodologies are to be carried out by a data collection firm and the data collected will have
to be statistically analyzed to produce the appropriate willingness to pay (WTP) for each
category. These WTPs are collected from pockets of samples from households all across the
Selangor State, and the payment vehicle used is an increase in water bill, as is popularly
used worldwide to fund water supply related projects.
A questionnaire design is undertaken, and its described in details all the decisions made
during the process of the survey design. A well designed survey is crucial to elicit accurate
willingness to pay from respondents. Willingness to pay is used for all the survey in this
report, as it is more conservative then willingness to accept. The survey was developed
using a stage-gate method whereby respondents will have to answer questions to determine
its level of use of the environmental asset. Various steps were integrated into the survey to
provide better accuracy of WTP.
1 : The Lifecycle and Impacts of the Sungai Sepang Dam
Dams are historically constructed for myriad purposes. These include the establishment of
water reservoirs for irrigation, and water supply. Dams are also erected to supply fuel for
hydroelectric power plants, and flood mitigation (Eyre, 2005). The construction of a dam is an
enormously expensive venture, and generally has a significant impact on the environment
(Association, 2015). Many large dams across the world have reservoirs stretching 50 to
80kms, and some hold enough water weight to physically alter the geographical
configuration of the land surrounding the reservoir.
The construction of the Sungai Sepang Dam is expected to take 4 to 5 years, as the scope of
work will include the erection of a retaining wall (dam) across Sungai Sepang, and the
creation of a dug out reservoir, as opposed to a traditional dam where the reservoir is
contained behind the retaining wall. During the construction phase, major changes will
happen to the environmental asset, and other environmental damage.
Resource Profile:
Sungai Sepang a river with a total length of 18.42 kilometers, and is next to Sungai Pelek
(Geoview, 2001). It serves as a border marker between the states of Selangor and Negeri
Sembilan. The river will be dammed and diverted into a reservoir.
Figure 1: Impression of dam & reservoir design and river diversion

Since the major environment asset is the Sungai Sepang itself, the river is analyzed for the
good and services that it provides for the local populace and the population of Selangor. The
environmental services provided by the river are as follows;
1. Aesthetic Value : The existence of the river in its current state will hold some value to
many individuals. This is a non-use value.
2. Recreation Value : The river will hold recreation value for the public who use the river
for various activities such as fishing, picnicking, kayaking or rafting, and camping.
This is a direct use value.
3. Income Value : There will be groups of individuals who will derive their income from
the river, mostly through fishing, but also through fish farming(aquaculture) in the
river. This is also a direct use value.
4. Biodiversity Value : The river will house a typical tropical river ecosystem, or more
commonly known as mangrove forests. This can be of both non use and use value,
depending on if there are individuals who actively harvest the biodiversity here for
recreation or income. A distinction is made between the aquatic population in the
river, and the population of other organisms outside the river, but within the
immediate vicinity of the river, e.g. monkeys, birds and crabs.
To value the impacts (change) on each of the services provided by the river, we have to
identify the particular endpoints that will affect the public. Once the endpoints are
established, then we can proceed to do valuation on it (Cabinet, July 2014).
1.1: Aesthetic Value:
Figure 2: Picture of Heron in Sungai Sepang (Bernama, July 2013 :Pic 1)
Resource:
The water level of the river is deemed as an asset, as it is deemed as natural beauty
(Corrigan, et al., July 2007). The water level in the river is an aesthetic value that users
derive utility from, and hence is considered as an asset. Changes to this asset will cause the
reduction of utility that users will derive from it. People derive utility from the river by
spending time by the river, kayaking and photography along the river, which is direct use
values, and they also derive utility from knowing of the existence of the river, which is
existential value. (Recreational and Aesthetic Value of Water Using Hedonic Price Analysis,
1995)
Changes to the Resource:

The construction of the dam upstream in the river will reduce the flow of water
downstream at varying levels, depending on the amount of water demanded from the
reservoir. For examples, reservoirs in the lakes of the Likhu Khola dam, in Nepal has daily
fluctuations of 18m. (Ghubaju, 2007) On low demand periods, the water level flowing
downstream will be higher then the water level flowing downstream during periods of high
demand. Most accessible parts of the river are taken up by fishing related endeavors, but the
river may have an existence value to the rest of the population living near the river and the
Selangor State population.
1.2: Recreation Value
Figure 3: Fishing charter boats awaiting hire.
Resource:
The downstream portion of the river has a few recreational activities happening in it.
A quick browse on the blogosphere reveals various fishing enthusiasts (Panggang, 2014)
who use the river for recreational fishing. Sungai Sepang is also used as a launch jetty,
where charter fishing boat operator launch into the Straits of Malacca, bringing recreational
sea fishermen. The river is also used for recreational kayaking, albeit a more popular option
seems to be Sungai Pelek which leads to Bagan Lalang (Zulzaha, 2015).
Changes to the Resources:
The construction of the dam will significantly lower the water level downstream of the
river, and this will disrupt recreation activities happening downstream. The water level might
drop to a level too low for boats to be used to carry fishermen into the sea for fishing. The
lower level of water will also cause the current jetty and vessel docking area be redundant,
as there will be no water there anymore. These have to be moved from their current site
further into the river area, thus incurring costs to the fishermen. The lower level of the river
will however may encourage swimming as it will decrease the flow-rate of the river, as
observed in other reservoir damming project. Currently the river isn’t being used extensively
for watersports.
1.3: Income Value
Figure 4: Fish farms in Sepang River
Resource:
Sungai Sepang is used as a launch for charter boats to bring sea fishing enthusiast
into the Straits of Malacca for fishing. There is significant number of boats there, hence
suggesting the amount of traffic happening. There also is a medium sized fish farm by the
jetty, the Sepang Fish Farm, and supplies reared fish to local restaurants, as told by one of
the fishing farm owners. The nutrients in the river are deposited in mangrove forest nearby
which has a different biodiversity such as crustaceans, and a different variety of fish.
Although this is not commercially harvested, there are individual who fish in mangroves and
collect shellfish on a daily basis. The river water is also harvested by the plantations for
watering of the crops. There also is a effluent treatment area which discharges treated water
into the river.
Change to the Resource:

Sungai Sepang was once polluted very badly when the mass culling of swine
happened in 1998 due to the Nipah Virus outbreak, and the carcasses were discarded into
the river, causing the river to turn black. The river has since recovered and has been
declared clean in 2010 (Lim, 2015). The creation of the dam will reduce the water available
downstream for any aquaculture, and this will cause most fish farmers to close down their
business. Fishing in the river will be affected as well as the fish population will decrease, as
the nutrient flowing in the river will no longer make it downstream past the reservoir. The
seagoing vessels however, may still be able to continue operations, but only possibly during
high tide or only small boats can be used as the lower water level in the river post
impoundment will make it impossible for larger boats to be used.
1.4: Biodiversity Value
Figure 5: Shellfish along the banks of Sungai Sepang

Resource:
Sungai Sepang hosts an abundance of biodiversity, from its rich delta, the mangrove
forests that run along the entire length of it, to the diverse life within the river as well. Local
anglers describe a variety of fish are in the river, such as the river ray, the senangin, the
sesirat and many more. Further research indicates that there 29 species belonging to seven
Orders (Perciformes, Clupeiformes, Siluriformes, Tetraodontiformes, Acanthuridae,
Elopiformes, and Mugiliformes) and 24 families (Ya, et al., 2014). The presence of the
mangrove forests along the river enhance the addition of organic nutrients into the river and
allow fish populations to thrive. The mangrove forests with their raised root systems also
serve as a nursery for fishes to lay their eggs (Ya, et al., 2014). In addition to the diverse fish
population in the river, the delta of Sungai Sepang which is again fringed by mangrove
forests offer a variety of saltwater tolerant species of fish and crustacean, such as crabs. The
tides of Sungai Sepang bring with it a variety of shellfish that is deposited along the bank of
Sungai Sepang. There are monkeys and birds, such as herons, that live amongst the
mangrove forests.

The loss of water and nutrients supplied by the river will cause the mangrove forests
to die off, and this will cause a major loss of biodiversity, significantly affecting the fish
population as it removes the nurseries available for the fish to lay eggs (Alongi, 2002). Many
animals will be displaced, and will infringe into the nearby plantations and residential areas,
and eventually will die off. The lack of nutrients in the river water and the loss of the
mangrove forests which also supply additional nutrients will cause the die of most of the
crustaceans and shellfish, and overtime, the river will have significantly diminished
biodiversity downstream (Valiela, et al., October 2001). However the upstream parts of the
river will not be significantly affected, with only a projected small rise in water level, thus
there is an opportunity to relocate the wildlife further upstream.
1.5: The Dam Lifecycle : Construction Phase
Next, the Environmental Impacts caused by the construction of the dam is analyzed. The
major environmental impacts that happen during the construction of the dam is:
1. The removal of the palm oil plantation and the clearing of land for the
construction site office.
2. Noise pollution to the environment.
3. Greenhouse Gas emission due to construction activities and equipment.

4. Pollution to the downstream of the river.
1.5.1: The removal of palm oil plantation and the clearing of land for the construction
site
Figure 6: The palm oil plantation plot
Resource:
Currently a palm oil estate plot is in the area where the reservoir will be established.
The size of palm oil plantation is approximately 200 hectares, (2 km² = 200 hectares). This
roughly generates about RM 3,600,000 per year, approximated by data from Malaysian Palm
Oil Board Pocketbook (Jan – June 2015). There is a Hindu temple within the plantation.
Changes to the Resource:

The palm oil plantation being removed will not pose a significant environmental
impact, as the palm oil plantation does not hold great biodiversity. There is a small
population of monitor lizards, snakes and some birds in the palm oil plantation. The palm oil
plantation itself is producing yields, and this will be an opportunity cost.
1.5.2: Noise pollution to the environment
Resource:
The area around Sungai Sepang is relatively quiet, with spikes in traffic during rush
hour. There is an airport nearby, but sufficiently far as not loud airport noises can be heard.
Construction activities are expected to continue for a period of 4 to 5 years, and

during the initial one year period, clearing and piling work will take place. This will produce
substantial amounts of noise primarily affecting the residential areas in the immediate vicinity
of the project. The overall ambient noise in the area will also increase during the period of
construction, due to the frequent transits of heavy machinery in and out of the construction
zone. A baseline noise profile will be acquired and compared to a noise profile to a similar
profile to establish a difference in the noise level, and the total loss of housing value to the
nearby houses can be determined.
1.5.3: Greenhouse Gas emission
Environmental Impact: (These are directs costs incurred regardless of resource)

Greenhouse gas emission during the construction phase is predominantly restricted
to the construction activities happening. Heavy diesel fuel burning machinery and trucks will
emit greenhouse gasses all throughout the construction period, however the trend will be
expected to decline as the construction progresses along, with a maximum peak expected
during the earth removal stage of the project. Greenhouse gas will however be emitted from
an operating reservoir (Frankel, 2012)
1.5.4: Pollution to the downstream of the river
Environmental Impact:
Pollution from construction activities upstream is expected to affect the water quality
downstream. The process of removal of earth and the erection of the dam will inevitably
introduce refuse into the river, and this will be carried downstream and either taken into the
sea of deposited in the downstream delta.
1.6: The Dam Lifecycle : The Operation Phase
The environmental impact caused by the operation of the dam and reservoir is restricted to a
few key impacts. The dam and reservoir is expected to operate for a period of 50 years, and
the reservoir will hold a minimum of 60,000 million liters of water. During operation, water will
be channeled from the dam into the reservoir thus keeping it at a constant level, and the
overflow is channel back downstream.
The major environmental impacts that occur during the 50 year operation phase of the dam
and reservoir are:
1. Erosion and Sedimentation.
2. Nutrient and pH Value.
3. Fish & Fish Diversity.
4. Flooding.
1.6.1: Erosion and Sedimentation
It is predicted that the dam will slow down the river water velocity, and this will reduce
the speed of water body upstream of dam. This causes a decrease in sediment-carrying
capacity, which results in sediment being deposited upstream and nutrient rich silt deposited
behind the retaining wall of the dam and in the reservoir. This deposition of silt will cause
inefficiencies in the ability of the reservoir to supply the required quantity of water, and also
cause undue wear on treatment equipment.
The reservoir creation will lead to accumulation of sediment upstream of the dam. This
causes smaller sediment load discharged downstream. The stream seeks to restore
sedimentation balance quickly, thus causing turbulence, which increases riverbed erosion
downstream of dam. This in turn will increase salinity of the soil which will be bad for
agricultural activities. The deposition of mass quantities of nutrient rich silt in the reservoir will
cause eutrophication in the reservoir, and this will encourage massive algae bloom. As the
algae die at the end of their lifecycle, they will rot and release methane and hydrogen
sulphite into the atmosphere.
The river flow carries sediment downstream, from Sungai Kelembai, where the flow width
narrows down. At this point, the total length to the proposed dam area is 7.15 km. These
sediment would eventually build up inside the dam, thus causing sedimentation upstream
and at the river, and erosion in the downstream flow. The total flow downstream is 4.5 km
where the river flows to the Straits of Malacca. The possible soil erosion would eventually
build up as a delta just 1 km away from Jimah Power Plant.
1.6.2: Nutrient and pH Value
With the presence of the dam, the nutrient flow from upstream would also build up
inside the dam. This would cause nutrient to build up thus allowing the condition for aquatic
vegetation. The flow downstream would experience a severe reduction in the nutrient flow
and possible alteration to its pH value adaptable for soil growth. The change in pH value will
also affect the vegetation downstream, as plants only thrive under a limited range of pH
values. This will cause the plants to die off, which in turn will adversely affect the biodiversity
downstream (Changes in Water Quality After the Construction of an Estuary Dam in the
Geum River Estuary Dam System, Korea, November 2014).
1.6.3: Fish Diversity and Salinity Intrusion
Apart from soil, the presence of the dam would also affect fish and its diversity. A
study needs to be conducted to understand the existing biodiversity of fish as different fish
species would react differently to hydrological alteration. As river flow downstream
decreases, sea water will push further into the river mouth and the effects of this
phenomenon on fish and fish diversity will have to be studied as well (Assessment of salinity
intrusion in the James and Chickahominy Rivers as a result of simulated sea-level rise in
Chesapeake Bay, East Coast, USA, 2012).
There would also be a necessity to study the overall fishing activities surrounding the river
area. There are a number of existing fishing businesses situated downstream of the dam,
namely:
a) Sepang Fish Farm
b) SW Jurassic Fishing Pond
c) Jeti Sirip Biru
Changes of river flow regime could potentially disrupt these businesses, including other river-
related activities such as fishing.
1.6.4: Flooding
During rainy seasons, the total quantity of water in the river will rise, and unless
demand is match to this increase in water quantity, a lot of water will be discharged
downstream. This discharge must be monitored and controlled or this will cause flooding
downstream, and around the reservoir. Flooding around the reservoir will have adverse
effects as the reservoir will be close to residential areas. Studies should be undertaken to
asses this impact and how to manage it.
1.7: The Dam Lifecycle: The decommissioning of the Dam
Finally the environmental impact from decommissioning the dam must be

considered. A reservoir is generally decommissioned after the level of water it is able to hold
diminishes significantly (THE H. JOHN HEINZ III CENTER FOR SCIENCE, 2004). Dams
with reservoirs by design inherently trap sediments, as river flows over rock, boulders and
sand picks up these sediments when the river flow is fast, and as the water flow is slowed
down approaching a reservoir, the sediments tend to drop out (Bergkamp, et al., November
2000). For example the Glen Canyon Dam on the Colorado River, USA, traps more than 66
million tons of sediment per year, equivalent to 95% of the sediment load (Collier, et al.,
1996). The composition of the sediments are mostly soil and dead microorganisms, and this
nutrient rich sedimentation serves an important purpose in further downstream when it is
deposited into deltas and floodplain. These sediments carry vital nutrients that sustain the
ecosystem at river deltas as well as provide nourish floodplains in for agriculture. (Bergkamp,
et al., November 2000)
As the years go by, the level of silt in the dam builds up significantly, drastically
reducing the reservoir capacity. When the reservoir is no longer able to supply the required
load it was built for, the reservoir must be decommissioned from service. The decision to
decommission the dam will result in a choice of two actions, one it is to remove the dam and
reservoir completely and return the river flow to its original configuration. The other option is
the reservoir will be repurposed and maintained indefinitely (THE H. JOHN HEINZ III
CENTER FOR SCIENCE, 2004). Rivers without significant historic and cultural value, and
lack of anadramous fish populations aren’t usually decommissioned, but rather converted
into recreation areas. The key decision making factor lies in the significance of the river to
the population, the gain in environmental value from the removal and the maintenance cost
of keeping up with an ageing infrastructure.
The first step in the decision making process to remove a dam is to first define the
goals and objectives for keeping the dam and removing the dam (THE H. JOHN HEINZ III
CENTER FOR SCIENCE, 2004). Once the goal and objectives can be identified, major
issues of concern that will help achieve the goals are then examined. Data is collected to
address all the major issues identified, as well as surveying the affected population for data.
With this collected data, regression analysis can be conducted to identify the key benefits
and costs associated with keeping the dam and reservoir after decommissioning, or to
remove the infrastructure completely.
For the proposed Sungai Sepang Dam project, the dam and reservoir will be
decommissioned after 50 years of service. Hence, after existing for 50 years, the reservoir
would have reached an equilibrium with its environment and would have developed
biodiversity around the reservoir. Some of the large man-made lakes in Malaysia such as
Tasik Kenyir, Tasik Temenggor and Tasik Pedu, to name a few ,have extensive ecosystems
developing around them (Lakes and Reservoir in Malaysia: Management and Research
Challenges, 2008). This secondary ecosystem is formed around the dam and reservoir. The
ecosystem created will be a function of the time of retention of water in the reservoir. The
ecosystem surrounding it may resemble more of an ecosystem around a lake if the retention
time is longer, and more like a river if the retention time is short (Scott, 2009). One notable
example is the Lake Kariba, the largest man-made lake in the world which sits on the border
between Zambia and Zimbabwe (LakeNet, 2004). The lake has a man-made ecosystem
around the dam, and with the introduction of fishes, it now supports thriving fisheries. The
lakes has tremendous ecotourism potential with elephants frequenting it, as well as Nile
crocodiles, hippopotamus and birds are a common sight in the reservoir area (Board, 2015).
Reservoirs are considered lentic ecosystems and do indeed have the capability of
developing its own ecosystem around it (Agostinho, et al., 1999)
Thus to remove a reservoir that has reached equilibrium with its surroundings, which
could potentially be as diverse if not more than its predeceasing environment, will pose
substantial ecological losses. The main sources of degradation of the lakes include the
surface runoff containing nutrient rich water from nearby plantations, sewage from
communities living around the lake, logging activities and oil discharges from motorboats
(Lakes and Reservoir in Malaysia: Management and Research Challenges, 2008).
Deep manmade lakes are prone to stratification problems, whereby a thermal

gradient is created within the deep lakes and these thermal gradients encourage the
excessive growth of plankton in the upper parts (warm) and these in turn saturate this region
with oxygen. However due to lack of mixing, the oxygen remains trapped in the top layer,
and the oxygen in the bottom layers are drained due to the decomposition of submerged
biomass, creating an anoxic environment in the bottom layers (Agostinho, et al., 1999). It’s is
noted in various studies that while eutrophication of reservoirs are always present, these are
usually due to human impact rather than just the sedimentation build up. The aggressiveness
of eutrophication action in the reservoir can be controlled with careful management of all the
inputs going into the reservoir, especially from further upstream (Lakes and Reservoir in
Malaysia: Management and Research Challenges, 2008). Care has to be taken to address
the various discharges that are made into Sungai Sepang, such as fertilizer run off from
plantations further upstream, to sewage from population zones further upstream as well. If
additional nutrient addition into the river can be controlled, the level of eutrophic activity in
the reservoir can be controlled as well and this will enable the reservoir to be used for
recreation activities as well as for fisheries. A poorly managed reservoir can also become a
serious emitter of greenhouse gasses, most notably methane, (CH4) and also hydrogen
sulphite (H2S) (Beaulieu, et al., 2014). These two gasses are released when the submerged
biomass decomposes, and the unabated addition of nutrients from runoffs further upstream
will significantly increase the amount of greenhouse gasses emitted (Nam, et al., 2014).
Hence a long term system must be located in place to both monitor the level of GHG
emissions, as well to monitor the quality of water entering the reservoir from upstream.
Many dams and reservoirs worldwide, open their reservoirs for recreation activities.
Most notable will be Lake Mead behind the Hoover Dam, which is widely used for fishing and
water recreation activities (Kumar, et al., Dec 2009). The creation of a reservoir, while will
potentially decrease the diversity of the river based ecosystem, can give rise to a lake
ecosystem, and can be further commercialized with the addition of species of fishes for sport
fishing. Reservoir lakes such as Tasik Kenyir in Malaysia capitalizes significantly in the
recreation activities demanded from the lake, with the establishment of resorts and sport
fishing opportunities (Lakes and Reservoir in Malaysia: Management and Research
Challenges, 2008). In other words, the conversion of the ecosystem to a lake ecosystem
actually might have increased its significance and existence values rather than before the
lake was created. The same can be said for the Sungai Sepang project, as the area currently
before development is just a palm oil estate with a river flowing through it. This area will
always have low foot traffic limited to plantation personnel and the occasional river fisherman
who may use the plantation road to go fishing. However once a reservoir is established, and
its area open to public recreation, the traffic to the area will increase, thus increasing number
of people will derive utility from it (Association, 2015). Over a period of 50 years, it will not be
hard to imagine as the reservoir being a focused recreation area for the locals with significant
foot traffic over the years. Although data for foot traffic cannot be obtained through surveying
the current inhabitants, we may pattern their behavior to find out how frequently might they
use a recreation area that is available nearby.
Reservoirs opened to public for recreation activities however must comply with the
requirements established by DOSH to ensure that recreation activities can be conducted
safely around the reservoir. This in turn will incur some costs, as capital will have to be
invested, such as safety warning signs, patrol boats, and personnel to oversee the safety
and continual maintenance of the site. Systems must also be in place to monitor the levels of
dissolved bacteria in the water, and to ensure that the reservoir will not be breeding grounds
for Aedes mosquitoes. Many lakes and reservoirs in Malaysia are also used as fisheries, to
harvest fish for consumption, and this may also be an economic benefit of maintaining the
reservoir. Thus by looking at the possible outcome of the project environment in 50 years, we
may establish the key goals and objectives we would like to achieve both for keeping the
dam and for removing the dam.
1.7.1: For Keeping the dam, the goals that we have to fulfill is
1. Ensure a clean water supply into the reservoir.
2. Development of a recreation area that will encourage tourism and recreation

activity around the reservoir.
3. To develop housing area around the vicinity of the reservoir, as a potential eco
development project.
1.7.1.1: To ensure a clean water supply into the reservoir.

As discussed earlier, eutrophication plays a significant role in the degradation of
tropical reservoirs. The surge in eutrophic activity is often regarded to anthropic activity, such
as fertilizer from plantations leaching into the river upstream from the reservoir (Lakes and
Reservoir in Malaysia: Management and Research Challenges, 2008). Therefore measures
must be installed in place to ensure that only water of acceptable quality is admitted into the
dam. There are equipment available in the market that can be put in place to consistently
monitor the dissolved matter content in the water. The equipment represents a significant
capital investment and an ongoing maintenance cost. To justify the costs of utilizing the
equipment, we must be able to know how much is the value of different levels of water
quality in the reservoir to the respondents.
1.7.1.2: Development of a recreation area that will encourage tourism and recreation
activity around the reservoir.
A reservoir with good quality features can be utilized as a recreational area. It is not
uncommon for most dams around the world to utilize it reservoir for recreational activities.
Reservoir lakes such Lake Kariba, offer extensive opportunities for recreation activities and
eco-tourism (Board, 2015). Most reservoir lakes will introduce fishes, and this in turn will
encourage sport fishing. Reservoir lakes such as Tasik Kenyir use the surrounding area to
develop resorts and real estate (Bernama, July 2013). A well-managed reservoir offer
significant economic benefits, especially in the realms of eco-tourism, recreation and real
estate. Recreational activities which range from fishing, watersports and jet skiing, offer a
form of income for the operators.
1.7.1.3: To develop housing area around the vicinity of the reservoir, as a potential eco
development project.
The development of a reservoir lake will be a boon of real estate development. It is
observable in the real estate market, individuals pay more money for a plot near a lake or
any such environmental feature (Recreational and Aesthetic Value of Water Using Hedonic
Price Analysis, 1995). Many examples can be found throughout Malaysia of this, where in
some cases, open pit mines are allowed to be filled up with rainwater, and housing projects
are developed around it. These lakes are then developed to house recreational facilities, as
well as provisions for fishing and fish farming. Some lakes are simply just maintained for its
beauty, and limited amounts of recreation are allowed in it, such as the man made saltwater
lake by Taman Sepang Putra, which is very close to the proposed project site. The proposed
project will reclaim a 5 km length of the river, which will be diverted, and this can be
developed into high end eco neighborhoods in the future.
1.7.2: On the flipside, for removing the dam, the goals we have to fulfill are:
1. Reduction of maintenance costs which will have to spent annually to maintain an

ageing infrastructure.
2. The restoration of the ecosystem of the river, by returning the flow of the river to
its original configuration, and the reestablishment of the palm oil plantation in the place of the
reservoir.
1.7.2.1: Reduction of maintenance costs which will have to be spent annually to

maintain an ageing infrastructure.
Over a period of 50 years, the dam and reservoir would have experienced decent
amounts of wear and tear. While concrete is fairly resilient to degradation due to exposure to
natural elements and water service, steel isn’t. Most of the supporting infrastructure in place,
including flow control gates and pipes, are constructed of steel, and these would have
experienced significant corrosion by the end of the 50 year lifecycle. Corroded steel must be
replaced as the structural integrity of the material is compromised. Part of the maintenance
routine of the dam will also include patching work of the steel and annual or semi annual
painting regimes. Concrete is very good under compressive stresses, however the upper
parts of the dam will experience some tensile stress from the weight of the water pushing
behind it, and maybe prone to cracking. This as well has to be monitored from time to time,
and concrete must be injected into the cracks to heal it. Another method to beef up the
structure is the introduction of buttresses (Design Considerations in the Continuous Concrete
Buttressing of Existing Concrete Gravity Dams, 2013). All these costs can be avoided if the
dam was completely removed, and the environment returned to its natural state.
1.7.2.2: The restoration of the ecosystem of the river, by returning the flow of the river
to its original configuration, and the re-establishment of the palm oil plantation in the
place of the reservoir.
The removal of the dam and reservoir will enable the river to be restored to its
original flow regime, which would mean that the river level downstream will now rise to the
level it was prior to the impoundment (THE H. JOHN HEINZ III CENTER FOR SCIENCE,
2004). This can have a positive effect on the river ecosystem, as it will enable the river to
restore the initial biodiversity. However, the ecosystem downstream would have adapted
over the period of 50 years and reached an equilibrium with the lower level of water
(Anderson, et al., 1987) (Lytle, et al., 2004), and the abrupt addition of water will now
submerge vegetation and in itself will cause decay underwater and the release of methane,
though not in such significant numbers. The increase in water level will also cause relocation
of the jetties and fish farming areas again.
Thus we have now covered all the environmental impacts that will happen for the project,
from the initial environmental values, to the impacts due to construction, operation and
decommissioning of the dam. Next we will evaluate the methods used to determine the
environmental valuation for each impact.
2: Environmental Impact Valuation.
Various methods are used to determine the values associated with the environmental impact
caused. The main goal here is to initially determine the costs due to changes to the original
ecosystem services, as well as additional impacts caused by the construction of the dam,
operation of the dam and removal of the dam. In some cases there will be a beneficial impact
as opposed to a detrimental impact and this value will cause the total costs of the
environmental impact to diminish.
The environmental valuation methods used are as follows;
1. Opportunity Cost Method
2. Hedonic Cost Method
3. Avoidance Cost Method
4. Contingent Valuation Method.
2.1: Opportunity Cost Method
Opportunity Cost is used to value the monetary benefits that is lost or not achieved due to a
change in the status quo.
Opportunity Cost Method is recommended for the following impact:

a) Deforestation
There are at least two ways to calculate the damages. One way is use the replacement cost
method, and another is opportunity cost.
a) Replacement Cost Methodology:
This method calculates the cost of relocating the agricultural activities elsewhere, taking
into account the cost of purchasing or leasing the new land, planting new seeds, and loss
of production while waiting for the products to yield (Eyre, 2005).
b) Opportunity Cost Methodology:
This method assumes that no alternative pasture exists, and the total number of palm oil
production will be reduced. Essentially, it is calculating the production loss due to the
reduced number of palm oil trees (Eyre, 2005).
Advantages, limitations and disadvantages

The main advantage is that both methods will be able to give a direct valuation, instead of
proxy method, based on market prices. The basis of calculations like discounted rate,
lifecycle etc. is widely accepted. The outcome of the valuation would therefore be less likely
to be contested.
The disadvantage of this method is that it does not take into account behavioral adaptations
and price responses.
2.2: Hedonic Cost Method
Hedonic Cost Method is recommended for the following impact:
a) Noise Pollution to Environment

The effects of noise pollution is best captured using Hedonic Valuation Method, whereby the
level of annoyance from the noise will reflect in the housing prices used (Eyre, 2005). A
method known as ‘dB(A) costing approach’ uses a Noise Depreciation Sensitivity Index
(NDSI) which is defined using hedonic pricing to estimate the depreciation in house prices as
a function of ambient noise level, with an estimation of 0.9% depreciation in property prices
per dB(A) LAeq.
The annual value of noise (AVN) bears the following formula:
= , − , × × ( )×
where:
Lyear,obs = Annual equivalent noise due to the construction activities
Ldn,back = Expected noise without the construction activities
Nhouses = Number of houses at that location
A(P) = Annuitised average house price
NDSI = Noise Depreciation Sensitivity Index

dB(A) costing approach has a competing valuation model, that is annoyance costing (Eyre,
2005). Annoyance costing uses an approach based on the probability of being highly
annoyed, taken as a proxy for a loss of amenity at any given location.
dB(A) costing approach has clear advantages when compared to annoyance costing:
a) Valuation of the increased level of noise can easily be tied with hedonic pricing,
instead of relying low annoyance probabilities as proxy for amenity
b) It allows for amenities to be more sensitive to new sources of noise (provided low
background noise levels)
However, the dB(A) costing approach comes with several disadvantages. Among the biggest
is its problem of transferring hedonic pricing studies to rural, low noise reference
environments, which is clearly the case in this environmental valuation study. One way to
mitigate this issue is to set a lower limit background noise, whereby anything lower than this
limit, then annoyance costing method will need to be conducted instead.
2.3: Avoidance Cost Method
Hedonic Cost Method is recommended for the following impact:
a) Net GHG Emissions

ExternE has an extensive comparative study of evaluating policy decisions to determine
revealed preferences cost of greenhouse gases; the first is to estimate revealed preferences
on policy targets, while another is based on public preferences revealed in referenda in
Switzerland (Eyre, 2005).
The conclusion of the study is to use an avoidance costs approach for the central value. The
summary of the avoidance costs are as below:
 €9/ton CO2 as lower bound value
 €19/ton CO2 as central value
 €50/ton CO2 as upper bound value
This report recommends the use of €19/ton CO2 in valuation of CO2 emissions. By
extension, it can be applied to all greenhouse gases.

The biggest advantage is that the avoidance costs have been peer-reviewed and widely
accepted by countries, and thus is a justifiable basis for valuation.
However, the avoidance costs are actually only for CO2 emissions, and the costs are
extended to other GHG due to limited studies on other greenhouse gases. Extensive
research and studies are needed to come up with other GHG costs with a higher confidence
level. In addition to that, these avoidance costs are based on European context, and the
costs may be lower in Malaysian context.
2.4: Contingency Valuation Method

Contingency Valuation Method is recommended for the following impacts and benefits:
2.4.1: Operation stage:

a) Erosion & Sedimentation
b) Nutrient & pH Value
c) Fish & Fish Diversity
d) Salinity Intrusion
2.4.1: Decommissioning Stage:
2.4.1.1: Alternative 1 – removal of dam and reservoir:

a) Ecosystem
b) Aesthetics
c) Soil and Silt
2.4.1.2: Alternative 2 – preservation of reservoir:

a) Benefits and Burdens: Preservation of Recreational Area
b) Burdens: Silt
c) Benefits: Tourism

2.4.1: Operations Stage:
The main advantage would be that a single method could be used to directly evaluate the
different key impacts, the contingent valuation method is applicable for different purposes
and this could save time of preliminary study. It has great flexibility to monetarily value of use
and non-use goods. In the case of Sungai Sepang, we could get the present use values of
fish and diversity as well as the soil, hence we would be able to get the value for our key
impacts.
To gain direct results, a single survey based questionnaire could be used to accommodate a
mixture of dichotomous and open-ended questions, where applicable, to reduce possible
answer bias. As stated in the previous statement, one of the weaknesses of using CVM is
the possibility of answer bias. Other disadvantage would be CVM is based on what people
say they would do, instead of what people are observed to do.
The advantages would be that by using the CVM method, we could get the net present value
of the fish of the different species as well as the soil, thus we could quantify the value.
Another advantage would be that we could get the value of how much the population would
be willing to pay in terms of water bill for a healthy supply of water quantity and quality (Han,
et al., September 2007).
2.4.2: Decommissioning stage:

The advantages of using CVM to estimate the future value of the environment around the
dam is:
1. It gives the present value respondents are willing to pay to preserve a recreational
area.
2. CVM is able to give the value for the aesthetics and altruism of the reservoir
ecosystem.
3. Able to quantify the existence value of the reservoir 50 years for now.
However, the disadvantages are:

1. Respondents don’t have an idea of the actual aesthetics and altruism of the reservoir
environment, hence may not be able to give accurate WTP bids.
2. The environmental endpoints are hard to be visualized by the respondents as the
timeframe is beyond the life of the respondent.
As observed from above, the preservation of the dam and reservoir will actually become an
environmental benefit, and the removal of the dam and reservoir in the future will pose an
environmental impact due to the removal of an entire ecosystem. Thus, it is expected that
the bias will be more towards the preservation of the dam, as there are no anadramous fish
population that need the river for specific breeding grounds, such as salmon (Han, et al.,
September 2007). Since the loss of the fish farms can be mitigated by the establishment of
fish farms in the reservoir, and the recreational fishing done in the river can be mitigated in
the same manner, it is quite possible that the majority of the population will bid more to keep
the dam and reservoir as opposed to removal of the dam.
3: Survey/Analysis Design
3.1: Noise Survey Design
The noise survey needs to capture 4 main elements necessary to calculate the dB(A) costing
approach. The 4 elements are:
1. Magnitude of the noise emissions (in dB(A))
2. Variation of noise as a function of time of day
3. Analysis of tonal content
4. Analysis of intermittency
3.1.1: Magnitude of noise emissions

Position of each source and observer location needs to be defined. The source position is
based on house positions. Use spreadsheet to calculate noise level from each source at
each house position.
Two main readings to be taken:

1. source noise level Lp,total
2. background noise level Lback.
The observed noise level is then plugged into the following calculation:
,
= 10. (10 + 10 )
3.1.2: Variation of noise as a function of time of day

The time of the day needs to be taken into account because noise during night is more
annoying than during the day. Therefore, as per BS 5228, a penalty of 10 dB(A) needs to be
taken into account between 10pm and 7 am.
15 9 ( )
= 10. ( 10 + 10 )
24 24
The Ldn levels are then input into the Lobs equation to calculate Ldn,obs.
3.1.3: Analysis of intermittency

This analysis is done to determine annual equivalent noise due to the construction activities
Lyear,obs. This is done by taking the result of previous sections throughout the year, then
average the readings.
This becomes:
, ,
, = 10. ( . 10 + 10 )
3.1.4: Analysis of tonal content

The dB(A) does not allow for the undesirability of tones in the noise. During construction, it is
anticipated that the piling work will provide additional annoyance. As per BS 4142, this is
allowed by addition of 5 dB(A) penalty.
3.2: Net GHG Analysis Design
3.2.1: Pre-impoundment Considerations

Pre-impoundment net GHG emissions considers different regimes of GHG fluxes between
surface and atmosphere and of permanent carbon burial rates, and can be divided into three
compartments (Agency, 2013):
1. water bodies – all portions of inundation area which are flooded throughout the year
2. floodplain – soil is either flooded or saturated only during high flow periods
3. upland – balance of inundation area
3.2.2: Post-impoundment Considerations

Post-impoundment net GHG emissions considers different regimes of GHG fluxes between
surface and atmosphere and of permanent carbon burial rates, and can be divided into
diffusive, ebullitive, degassing and permanent carbon burial:
1. Estimates of reservoir GHG diffusive fluxes should be calculated for reservoir and
downstream reach components for CO2, CH4 and N2O.
2. Estimates of reservoir GHG ebullitive emissions should be calculated for CO2 and
CH4 and the reservoir component in the region where bubbling can occur.
3. Estimates of reservoir GHG degassing emissions should be calculated for CO2, CH4
and N2O .
Post-impoundment permanent carbon burial rates to be obtained from measurements at

sites in the sedimentation zone of the reservoir.
3.2.3: Measurement Techniques

It is necessary to carry out measurements of GHG fluxes at the site. The following explains
the measurement techniques needed to be carried out as input of the quantitative analysis.
Measurement of Measured GHG Measuring Tool

GHG Ebullition CO2, CH4
Fluxes
Bubble Collection Funnels

Diffusive Fluxes in CO2, CH4, N2O
Water
Floating Diffusion Chamber

Diffusive Fluxes in CO2, CH4, N2O
Soil
Greenhouse Gas Collection

GHG Emissions CO2, CH4
by Degassing
Collecting water samples

Permanent Buried carbon
Carbon
Sedimentation
Rates
Sedimentation Trap
Quantitative analysis of the net GHG for pre- and post-impounded areas will then be
calculated based on a set of procedures, which is illustrated as below.
3.3: Opportunity Cost Analysis Design
The opportunity cost can be estimated by taking into account the production loss of oil palm
trees for the dam lifecycle (e.g. 50 years) with an agreed discount rate. The loss of revenue
of oil palm can be predicted by performing a study of existing production yield and revenue in
the area and a random sampling of other fields in nearby areas.
If this reduction of production means that existing workers need to be reduced or to find new
jobs, the welfare loss from the workers should be added.
3.4: CV Survey
Firstly we must describe the extent of area that encompasses all the potential respondents,
including businesses and plantations. Once the population zones are identified, surveys can
be conducted on those population areas.
3.4.1: Survey Design Goals:

Surveys can be designed with an understanding of the design of the hypothetical scenario. In
our hypothetical scenario, the Sepang River is dammed on the upstream and downstream,
and water is directed into a reservoir, dug out of a plot of former plantation area, by highway
5 and Taman Seri Serbau. The body of river water in between the two dams will be drained,
and reclaimed, creating new land by the edge of the reservoir. The direct impact of the
actions are as follows:
The impact of altering the environmental asset such as river flow, fish population, aesthetic
appeal, and loss of biodiversity is considered. The aim of the CV is to then estimate what the
environment qualities are worth to the affected population sample. Also from the data, the
average WTP must be estimated from the sample.
Then regression analysis should be undertaken to identify the key variables which are driving
the answers given. It is essential that this is done to check the sample is taken is
representative of the population as a whole. For example, if the regression analysis indicates
that age is a key determinant of WTP, then the age structure of the sample must reflect the
age structure of the population as a whole.
And finally, the data is aggregated to the total population of the affected area.
3.4.2: Estimation of mean and median WTP from CV data
Once all the WTP data is acquired for a particular environmental change, the data is graphed
to produce a probability density function graph, which looks like:
Figure 7 (University,2015 : Fig 4)
The Mean WTP is basically the area under graph, which can be estimated mathematically, or
Mean WTP = (each observed WTP x probability of observed WTP bid occurring)
Another way of expressing the WTP data is by creating a probability survivor function, which
will produce a graph that looks like:
Figure 8 (University,2015 : Fig 5)

It shows the probability of observing a WTP. The area under the graph represents the mean
WTP, and reading at 0.5 probabilities from the vertical axis, the horizontal axis gives the
median WTP value (University, 2015).
3.4.3: Survey Design
Survey design is designed upon guidelines from various resources (Arrow, et al., January
1993) (Han, et al., September 2007) (Pearce, et al., 2002), and the steps in designing the
survey questions are outlined below:
1. First the hypothetical scenario must be clearly defined, stating both the good and bad
impacts of the project to the population/respondents.
2. A scenario example relative to the Sungai Sepang project. “The state of Selangor
suffers from severe water shortages during the dry season and at times of drought.
This shortage of water causes disruption to the water service both for industries and
household. This amounts to X million in losses annually. The government is
proposing to build a new dam and reservoir, over an area called Taman Seri Serbau,
which is essentially a palm oil plantation plot, with Sungai Sepang flowing through it.
The proposed dam will disrupt the flow of Sungai Sepang downstream, and divert the
water into a water storage reservoir, a man made lake approximately 2km x 2km”.
3. Attitudinal questions: The next stage seeks the respondents attitudes to general
issues, concerning the good, then to the good in questions. For our scenario, we will
have to get the respondents attitude towards the asset in question.
a. For matters of dam decommissioning:
i. Asset 1: Reservoir biodiversity
ii. Asset 2: Recreation area
b. We can hence ask questions that reflect the attitude of the respondent to:
i. Asset 1: How would you feel about the removal of a manmade lake
that has ecosystems, such as secondary forests and a fish and bird
population, developed in it?
ii. Asset 2: Which is more important to you,
1. A palm oil plantation with a river running, undisrupted through
it, albeit with the possibility of agricultural nutrients running
through it?
2. A recreation area for public use, created around a reservoir
that will be established in the aforementioned palm plantation,
resulting in the removal of the palm oil plantation plot, and a
dam to be built to divert the water from the river into the
reservoir?
It becomes a little tricky here to find out the use of the reservoir as a recreation area, as at
the time of interview, the reservoir is yet to be established. We can however find the
willingness to pay for the establishment of a recreational area around the reservoir to find out
the value of the recreation area at present.
Therefore, now focusing on the good in question in present, the biggest asset in question is
the Sungai Sepang, and the disruption to its flow patterns. Hence we must find out how
much the Sungai Sepang is worth to the population of Selangor.
One way to establish the users and non users of the river:
1. Do you know Sungai Sepang?

2. Do you visit the river often? (i.e. once to twice a week or more?)
3. What is the main purpose of your visit to the river?
4. Do you come here alone or with family, friends?
When valuing the environment, we must establish the goods and services provided by the
river, at its current state, and define how that will change, and consequently how much
respondents are willing to pay to avoid the change to the asset. Now considering the biggest
asset in the picture is the river:
Goods and services provided by the river in its current state:
 Aesthetic value
 Recreation value
 Income value
 Biodiversity value
To value aesthetic value, we have to identify the features of the river’s aesthetic that will
change:
 Level of river downstream:

o Change in level will make the river much shallow than it was previously.
 Flow-rate of the river:

o The flow regime of the river will be altered significantly, causing the flow to be
slow moving.
 Quality of river water:

o Studies show that the quality of water post catchment will be affected, as well
as water just before the dam.
o Eutrophication upstream behind the dam wall.
Sample questions and question design are as follows :
i) How much are you willing to pay to preserve the quantity of water flowing in
Sungai Sepang?
For other assets:
Recreation value:
i) Do you fish in the Sepang River? Yes/No
ii) Do you use the Sepang River for recreational activities? Yes/No
If both yes or one yes, respondents draw utility from the Sepang River.
Then we may ask:
i) How much are you willing to pay / year to be able to use Sungai Sepang for
recreation? If a reservoir lake is established by Sungai Sepang, where fishing
can be done in the lake, as well as recreation, how much will you be willing to
pay to still use Sungai Sepang?
Income:
i) Does your livelihood depend on the existence of Sungai Sepang in its

undisrupted form? Yes/No
Questions: How much are you willing to pay to ensure that a dam will not be built in Sungai
Sepang?
Biodiversity value:
Again, instead of classifying the biodiversity into its specific groups; we try and get the WTP
for the resource as a whole. A scenario sample as follows is wrote out describing the impact
or change on the environmental goods and services, followed by a WTP question:
“The construction on a dam in Sungai Sepang will have an impact on the population of fish in
the river downstream from the dam, as well as loss of biodiversity down in the delta
downstream. How much are you WTP /year to ensure that the biodiversity of the river system
is not compromised?”
.
We have to remember that we are trying to find the non-use value, or environmental goods
and services that are not actively traded in the market place. This in addition to use values,
such as the loss of the palm oil plantation plot and others should give us the total cost of the
environmental impact.
The last part of the survey will be to elicit socioeconomic characteristics of the respondents.
This information is used to test whether the WTP answers conform to theoretical
expectations: a minimum list of such characteristics such as age, sex, interests, income and
education. Other factors deemed important should also be analyzed (Arrow, et al., January
1993). Similar methods of using weighting systems, such as the importance of the existence
of a particular goods and service to an individual, rated from a scale of 1 to 5, for a more
accurate WTP are studied and added with the survey.
.
4. CVM Questionnaire
The Sepang River is a river flowing in between two of thirteen states in Malaysia, namely
Selangor and Negeri Sembilan.
1. Have you heard of Sepang River before?
YES NO
2. How often do you visit Sungai Sepang? (Please check one.)
□ Never □ Rarely □ Seldom □ Often
Note: Questions 1 & 2 is about establishing users and non-users of the river.
If you choose No or Never on questions 1 and 2, please skip question 3 - 10.
Please let us know the importance of water quality as you fill the following questions.
3. How would you rate the following qualities of Sepang River to you? (Please skip this
question if you don’t know or choose not to answer)
Not Important Mildly Important Important Very Important
Fishing 1 2 3 4
Scenery 1 2 3 4
Drinking Water 1 2 3 4
Crop Irrigation 1 2 3 4
Navigation 1 2 3 4
4. How often do you participate on the following activities at or in vicinity of Sepang

River?
Never Rarely Seldom Often
Fishing 1 2 3 4
Farming 1 2 3 4
Note: Questions 3 & 4 establishes the goods and services provided by the river in its current
state in terms of:
 Aesthetic value
 Recreation value
 Income value
 Biodiversity value
If you choose Never or Rarely on question 4 for Fishing or Farming, please skip
question 5 - 10.
A possibility to the presence of the dam is that there could be a loss of the fish population
and biodiversity, mostly downstream to the river.
5. Do you fish at Sepang River as your primary income, daily consumption or for
recreational? (Please check those that apply)
□ Primary income
□ Daily Consumption
□ Recreational
6. How much would you be willing to pay for an additional of x fish species caught in a
day?
__________
7. How much would you be willing to pay for an additional of y fish species caught in a
day?
__________
Note: Questions 5 through 7 would be to estimate and correlate the value of good based on
the type of fishing activity of the respondent..
Throughout the operation of the dam, the nutrient cycle is altered and the nutrient component
of the water would not be evenly distributed along the river flow. If one of the uses of the river
water is for crop irrigation, there would be a possibility for a reduction in plants nutrient, thus
affecting the output/yield and/or income.
8. Do you farm at Sepang River vicinity as your primary income or daily consumption?
(Please check those that apply).
□ Primary income
□ Daily Consumption
9. How much area of soil do you currently use for farming purpose?
__________
10. How much would you be willing to pay for an additional yield of x crop if there was an
increase in the soil quality?
__________
The state of Selangor has the largest population in Malaysia, accounting up to 5.79 million
population based on the year 2013. The sole dependency of water supply from the Selangor
Dam has caused problems as the growth of population as well as industrialization demands
for more water. During the previous dry and drought seasons, the water which can be
supplied from the existing dam was unable to meet the demand, thus causing losses almost
two third of whole Selangor population totaling up to x million Ringgit. The government
acknowledges this and proposes that a new dam to be built at Taman Seri Serbau, which at
its current state is a palm oil. The proposed location can be seen below.
Upon completion, the dam would be able to solve the shortage of water in the State of
Selangor by catering 60 000 million liters of water, apart from that the reservoir will also be
concurrently used as a recreation area for the public. The reservoir area can be used for
activities such as fishing, and water sports; e.g. jet-skiing.
However, the construction of the dam would bring several impacts throughout its lifetime.
The major environmental impacts would be caused by water flow regime alteration and could
affect soil and vegetation, fish and diversity, and changes to nutrient and pH value.
Note: This is a detailed description of the project and all its impact and benefits
If an additional of RM x was added to water price, several technologies could be adopted,

operated and maintained to reduce the environmental impacts that could likely happen, while
ensuring a healthy quality and quantity of water supply to the State of Selangor.
Please answer the following questions honestly
11. If the increase in price will be RM x per liter, would you support this program?
YES NO
12. What is the maximum amount of price addition that your household would be willing
to pay?
_________________
If your answer to question 12 was zero, please respond to question 13 and skip
question 14.
13. Why would you not contribute to the program? (Please check only one.)
□ This program is not important to me

□ I am on limited budget
□ I do not think that I should be responsible for this program
□ I do not support any new government programs
□ Other, Please specify _______________________________
14. Why would you contribute to the program? (Please check only one.)
□ This program is important to me

□ I do think that I should be responsible for this program
□ I do support a good cause
□ Other, Please specify _______________________________
The reservoir has an expected working life of 50 years, by the end of which the reservoir will
have to be decommissioned. The decommissioning process involves either the removal of
the reservoir and dam, thus restoring Sungai Sepang to the original state. The other
available action is to keep the reservoir, maintaining it as a recreation area for the public
indefinitely.
To maintain the reservoir as a recreation area indefinitely, substantial equipment and

manpower will have to be employed, and this will incur significant costs. However, equipment
can be purchased now to consistently produce a good quality if water in the reservoir, hence
reducing costs for more expensive treatment of water in the reservoir in 50 years. Moreover
the higher quality of water in the reservoir also translates to a safer recreational environment
for the public’s use when the reservoir is still in use.
A reservoir and dam will be built next to Taman Seri Serbau, repurposing a palm oil
plantation plot, on which the reservoir will be built.
15. Please state how much are you willing to pay, as an extra cost per m3 of water
consumed,so that SYABAS can invest in equipment to clean the river water before it
is deposited into the reservoir?
_________________
The reservoir with a clean supply of water in it can then promote the propagation of various
lentic species, or a lake ecosystem. Fish can be introduced to encourage recreational
fishing, and facilities can be established around the reservoir to accommodate for jogging
and picnicking.
16. How much are you willing to pay, as an extra cost per m3 of water consumed, for
SYABAS to establish an eco-recreational area around the reservoir?
_________________
PERSONAL INFORMATION
Please note that the information that you provide is completely anonymous and will be used
for statistical purpose only.
1. □ Male □ Female
2. Age : _____ years
3. How far is your home location from Taman Seri Serbau?
□ Within x km
□ x – y km
□ Over y km
4. In the last year, how often did you visit Sepang River?
□ 0 visit
□ 1 – 10 visits
□ over 10 visits
5. Please check the highest education that you have received.
□ Elementary
□ High School
□ University
6. On average, how much is your household monthly income?
□ Less than RM900

□ RM900 – RM1800
□ RM1800 – RM3200
□ More than RM1800
Thank you for your cooperation. Please return this survey in the envelope provided.
5. Scope of Work
Further work is required by future environmental consultant and opinion pollsters to complete
the environmental valuation of this project. The methods outlined here can be applied by the
opinion pollsters, and third party data collectors. The collected data should be analyzed by
qualified statisticians, and corresponding WTP values can be determined. The following sub-
sections highlight the summary of scope of work to be done by both parties.
5.1: Scope of Work for Environmental Consultant
1. Identification and agreement of stakeholders, including:

a) Federal government officials
b) State government officials
c) Municipal Council
d) Residents
e) Proponents – e.g. government officials
f) Opponents – e.g. environmentalists
2. Compliance to regulations, codes and standards, including:

a) EIA regulation
b) Noise guidelines
c) AWWA (American Waterworks Association) or similar standards for water systems
management.
d) Environment Quality Act
e) Town and Country Planning Act
f) Water Services Commission Act
g) Department of Occupational Safety and Health Regulations.
h) Water Act
i) Fisheries Act
3. Studies to conduct in order to carry out the proposed valuation methods:

a) Study of existing production yield for opportunity cost calculations
b) Net GHG Quantitative Analysis
c) Noise survey
d) Sediment load
e) CV survey
f) Fish and fish diversity
5.2: Scope of Work for Opinion Pollsters
1. Seek guidance of a professional sampling statistician for determination of sample type and
size. An accurate target population should be determined as well, for this scenario it is
recommended the target population be the population of the State of Selangor. The sample
frame population is crucial and should be able to accurately describe the water rates paying
population of Selangor. It is recommended samples taken from all the large population
zones in the State of Selangor. A full sample must be chosen to avoid two particular types of
bias, non-response error, and sampling error. The sample probability selection should be
random across all the population frame that pays the water rates. (Pearce, et al., 2002).
2. Ensure that survey is designed to minimize non-responses. The survey should first be tested
with a focus group to ensure that is able to elicit the required WTP data accurately, and test
for non-responsiveness (Pearce, et al., 2002).
3. Use willingness to pay rather than willingness to accept. Willingness to pay is always used
because it is conservative, and produces accurate WTP values as opposed to WTA values
(Arrow, et al., January 1993). The willingness to pay should be underestimated, rather than
overestimated. The lower end estimate of the values should always be considered, and
different regression analysis’s should be run to see the variable that provides the most
conservative estimates of WTP.
4. Accurate description of project is required. Accurate description of the environmental

resource in question and the changes that will happen to it is required to equip the
respondents with the complete knowledge of the scenario. An accurate and adequately
detailed description will produce more accurate WTP bids as well as reduce non responses
(Arrow, et al., January 1993) (Harris, et al., July 2013).
5. Pre-testing of photographs must be carefully explored. If photographs are used for the
purposes of eliciting WTP, these photographs must first be tested to ensure that the images
are able to supply adequate amounts of information to the respondents.
6. Provide no-answer option in the questionnaire so that interviewee is not forced to answer
any of the question, but need to carefully elicit the reason.
7. Provide yes/no follow-ups to the questions. Follow up questions, besides helping to clarify
the motives for and validity of responses, can also be used to test the credibility of the
scenario (Pearce, et al., 2002).
8. Pre-testing for interviewer effects to be done to ensure interviewee answers without bias
from interviewer. Interviewers should always approach the questioning from the most
neutral standpoint, and should actively avoid trying to influence the respondents. An
interviewer script should be prepared beforehand so the style of questioning, and word
selection is predetermined (Pearce, et al., 2002).
9. Face-to-face personal interview is recommended to be performed to answer the survey.
Face to face data collection is the most effective manner to get accurate data, followed by
mail, and lastly using email or electronically (Arrow, et al., January 1993).
6. Conclusion
The deployment of Sungai Sepang dam project will have numerous environmental costs and
benefits which will have social, physical and environmental impacts. There are 3 impacts that
have been identified during construction stage (deforestation, noise pollution, net GHG), 5
impacts during operation stage (flooding, nutrient and pH value, fish and fish diversity,
salinity intrusion, erosion and sedimentation), 3 impacts if reservoir is decommissioned
(ecosystem, aesthetic, soil and silt) and 3 impacts if reservoir is preserved (recreational area,
silt, tourism).
In total, four environmental valuation methods have been proposed to monetize each of the
identified burdens, which are Avoidance Cost Method, Hedonic Cost Method, Opportunity
Cost Method and Contingency Valuation Method. The advantages, limitations and
disadvantages of each method have been outlined.
Each of the valuation methods has different way of conducting the analysis or survey. For
estimating GHG emissions using Avoidance Cost Method, a Net GHG Analysis need to be
conducted first. For quantifying noise pollution, a Noise Survey need to be conducted prior to
using Hedonic Cost Method. Meanwhile, a CV survey is required for conducting Contingent
Valuation Method.
The summary scope of work for future environmental consultant and opinion pollsters have
also been proposed in the final part of the report.
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Aging. Brazil : Backhuys Publishers, 1999.
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Anderson, L.S and Ruffner, G.A. 1987. Effects of Post-Glen Canyon Dam Flow Regime on the Old
High Water Line Plant Community along the Colorado River in Grand Canyon. Colorado :
National Park Service, 1987.
Arrow, Kenneth, et al. January 1993. Report of the NOAA Panel on Contingent Valuation.
January 1993.
Assessment of salinity intrusion in the James and Chickahominy Rivers as a result of simulated
sea-level rise in Chesapeake Bay, East Coast, USA. Rice, Karen C, Hong, Bo and Jian, Shen. 2012.
s.l. : Elsevier, 2012.
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2015. [Cited: 11 3, 2015.] http://www.hydro.org/why-hydro/other-benefits/.
Beaulieu, Jake J, et al. 2014. High Methane Emissions from a Midlatitude Reservoir Draining.
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Bergkamp, Ger, et al. November 2000. Dams, Ecosystem Functions and Enviromental
Restoration. South Africa : World Commission On Dams, November 2000.
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investments-next-year-says-ahmad-said.
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http://www.zambiatourism.com/destinations/lakes/lake-kariba.
Cabinet, Australian Government: Department of the Prime Minister and. July 2014. Research
Report: Environmental Valuation and uncertainty. Canberra : Office of Best Practice Regulation,
July 2014.
Cave, Christi. 1988. Stream Biology and Ecology. [Online] 1988. [Cited: 10 3, 2015.]
http://chamisa.freeshell.org/dam.htm.
Changes in Water Quality After the Construction of an Estuary Dam in the Geum River Estuary
Dam System, Korea. Jeong, Hoon Yoon, Yang, Jae Sam and Park, Kyeong. November 2014.
Coconut Creek : Journal of Coastal Research, November 2014.
Collier, Michael, Webb, Robert H and Schmidt, John C. 1996. Dams and Rivers: A Primer on the
Downstream Effects of Dams. s.l. : U.S. Geological Survey, 1996.
Corrigan, Jay R, Egan, Kevin J and Downing, John A. July 2007. Aesthetic Values of Lakes and
Rivers. Iowa, Ohio : s.n., July 2007.
Dams, World Commision On. 2000. Dams and Development: A New Framework For Descion
Making. London : Earthscan Publications Ltd, 2000.
Design Considerations in the Continuous Concrete Buttressing of Existing Concrete Gravity Dams.
Anderson, N and Vitharana, N. 2013. s.l. : Institute of Professional Engineers of New Zealand,
2013.
Environmental Valuation and Decision Making for Water Project Investment and Operations:
Lessons from the FERC Experience. Shabman, Dr.Leonard and Stephenson, Dr.Kurt. March
2007. s.l. : Visiting Scholar Program, March 2007.
Eyre, N. 2005. Method for Estimation of Physical Impacts and Monetary Valuation for Priority
Impact Pathways. Externalities of Energy “EXTERNE” Project, 2. 2005.
Frankel, Max. 2012. Climate Progress. [Online] 8 9, 2012. [Cited: 11 3, 2015.]

http://thinkprogress.org/climate/2012/08/09/663881/study-reservoirs-may-produce-20-times-
more-methane-than-normal-during-water-drawdown/.
Geoview. 2001. Sungai Sepang Data. Geoview Malaysia. [Online] 2001. [Cited: 11 3, 2015.]
my.geoview.info/sungai_sepang.
Ghubaju, S.R. 2007. Impacts of damming on the aquatic fauna in the Nepalese rivers. Food and
Agriculture Organization of the United Nations. [Online] 2007. [Cited: 9 23, 2015.]
http://www.fao.org/docrep/005/y3994e/y3994e0i.htm.
Han, Sang-Yong, Kwak, Seung-Jun and Yoo, Seung-Hoon. September 2007. Valuing
environmental impacts of large dams construction in Korea : An application of choice
experiments. s.l. : Elsevier, September 2007.
Harris, Johnathan M and Roach, Brian. July 2013. Environmental and Natural Resource
Economics: A Contemporary Approach. London : M.E.Sharpe, July 2013.
Kumar, Arun and Tormod, Schei. Dec 2009. Intergovernmental Panel on Climate Change
:Hydropower. s.l. : Intergovernmental Panel on Climate Change, Dec 2009.
LakeNet. 2004. Lake Profile : Kariba. LakeNet. [Online] 2004. [Cited: 11 3, 2015.]
http://www.worldlakes.org/lakedetails.asp?lakeid=8360.
Lakes and Reservoir in Malaysia: Management and Research Challenges. Sharip, Zati and
Zakaria, Salmah. 2008. Seri Kembangan, Selangor : World Lake Conference, 2008.
Lim, Chia Ying. 2015. The Star. [Online] 6 15, 2015. [Cited: 11 2, 2015.]
http://www.star2.com/living/living-environment/2015/06/15/once-dead-sepang-besar-river-
comes-back-to-life/.
Lytle, D. and Poff, L. 2004. Adaptation to natural flow regimes. s.l. : TRENDS in Ecology and
Evolution, 2004.
McCully, Patrick. 2007. Hydrologcial Effects of Dams. International Rivers. [Online] International
Rivers, 2007. [Cited: 9 21, 2015.] https://www.internationalrivers.org/hydrological-effects-of-
dams.
Nam, Thuen 2, et al. 2014. Methane Emissions due to ebullition in Tropical Reservoir. 2014.
Panggang, Jenahak. 2014. Aku Suka Memancing. [Online] 08 18, 2014. [Cited: 11 3, 2015.]
http://jenahakpanggang.blogspot.my/2014/08/rumah-rakit-sungai-sepang.html.
Pearce, David and Ozdemiroglu, Ece. 2002. Economic Valuation with Stated Preference
Techniques : Summary Guide. London : Queen's Printer and Controller of Her Majesty's
Stationary Office, 2002.
Recreational and Aesthetic Value of Water Using Hedonic Price Analysis. Lansford , Notie H and
Jones, Lonnie L. 1995. 20(2):341-355, s.l. : Western Agricultural Economics Association, 1995.
Scott, Susanna. 2009. How Lakes Differ. The Lake Scientist. [Online] Miami University, 2009.
[Cited: 11 3, 2015.] http://www.lakescientist.com/lake-facts/how-lakes-differ/.
THE H. JOHN HEINZ III CENTER FOR SCIENCE, ECONOMICS AND THE ENVIRONMENT. 2004. Dam
Removal: Science and Desicion Making. Washington D.C. : The Heinz Centre, 2004.
University, Heriot Watt. 2015. Economics of Renewable Energy. Edinbrugh : Heriot Watt
University, 2015.
Valiela, Ivan, Bowen, Jennifer L and York, Joanna K. October 2001. Mangrove Forests: One of
The World's Threatened Major Tropical Environment. s.l. : BioScience, October 2001.
Ya, Nurul Asyikin, et al. 2014. Fish diversity in Sepang Besar estuary – a preliminary analysis.
s.l. : International Journal of Advances of Agricultural & Environmental Engineering, 2014.
ZULZAHA, FARAH FAZANNA. 2015. The Star. [Online] 1 12, 2015. [Cited: 11 3, 2015.]
http://www.thestar.com.my/Metro/Focus/2015/01/12/More-than-just-a-beach-Bagan-Lalang-
offers-a-quick-and-easy-escape-from-the-city/.
Reflection on the Assignment
The Assignment, sitting back after putting the final report draft in pdf, has taught me a lot of
things. Principally, it has thought me the importance of establishing a good team chemistry, and
working with each other’s strengths and weaknesses. We were able to draw from prior project
and research experience that we had, and we able to quickly synthesize a plan. Once we had a
plan, the sheer tenacity of my teammates made me want to keep up with them. Indeed we
were each motivating the other, and it simply showed as each person were able to pull their
weight. The process of putting together the report was extremely enjoyable, despite some
moments of utter frustration and swearing. The process of putting it all together required me to
cycle back and forth between literatures, and this gave me, and the team , a clear idea of how
best to deliver the report. As we shared all the information that we collected, we began to
realize that we had done a mountain of work, and will run out time to put it together. However I
believed we needed this amount of information, as it not only will help our understanding, but
also enable us to paint a very clear picture of how to carry out an environmental valuation. We
recollected, and pressed ahead. Having 3 people working through the pile of information is good
as it enabled us to specialize in a particular period of the lifecycle of the dam. I proposed that
the original resources that are there must be valuated, as the change in the river will cause a
decrease in utility downstream, and this cost must be quantified. I proposed a visit to Sungai
Sepang, and to the proposed construction site to get an actual feel for the place, and since we
are all adventure hungry, we embarked on the mission. It was a rewarding and eye opening
experience to see the actual site, as it negated my previous assumption that Sungai Sepang is
polluted and has no value to the population surrounding it. I met an adorable fat monkey which
belonged to one of the fishing boat operators, and met an old uncle who gets to sit on a wooden
platform overlooking the river, tucked in mangrove forests, drinking wine and watching his fish
farm and the river. He instantly gave me a fresh perspective on how I should consider a new
career path. All in all, I enjoyed working with Abang and Nikesh, as we have spectacular
chemistry and synergy, and I would look forward to working with them again.
Minutes of Meeting
DATE : 3rd October 2015
VENUE : Seminar Room 5, HWUM
TIME : 16:00 hrs – 17:00 hrs
NO NAME ATTENDANCE INITIAL
1 Arvindran Subramanian (chairman) / ARS
2 Abang Ashaari Abdul Rahman / AAAR
3 Nikesh Haresh Shamdasani / NHS
NO AGENDA REMARKS
1.0 Group Assignment General Discussion
2.0 Other Matters
NO MATTERS DISCUSSED PIC DATELINE
1.0 Group Assignment General Discussion
1. The group assignment’s problem statement was info

discussed in detail.
2. The team agreed targets for the milestone

activities as follows: All
a. Literature review – 2 weeks

All 17/10/15
b. Report writing – 1 month
All 17/11/15
c. Presentation slides – 1 week
All 24/11/15
3. Team agreed to perform preliminary literature

reviews and discuss on key impacts next week.
All 10/10/15
2.0 Other Matters
The group will be officially named as Doublemint Info

Dam (dmd) Consultants.
Prepared by: Approved by:
Abang Ashaari Abd Rahman Arvindran Subramanian

DATE : 10th October 2015
TIME : 16:00 hrs – 17:00 hrs
1 Abang Ashaari Abdul Rahman (chairman) / AAAR
2 Arvindran Subramanian / ARS
NO AGENDA REMARKS
1.0 Literature Review of Key Impacts
2.0 Other matters
1. The group’s literature review findings of key info

impacts are as follows:
Physical environment:
a) Modification of water regime and flow

b) Physico-chemical properties of water
Biological environment:
a) Aquatic wildlife and habitats

b) Bird life, terrestrial wildlife and habitats
c) Vegetation
Human environment:
a) Socio-economic impacts
b) Impacts on public health and safety
c) Impacts on hunting and fishing
d) Impacts on recreational uses
e) Heritage impacts
f) Impact of rivers with a modified flow and
diversion canal
g) Impacts of power lines and related
structures
2. Upon clarification with client, the key impacts

shall only focus on environmental impacts, and not
on socio-economic burdens.
info
2.0 Other Matters
1. It’s agreed that the approach of the team would Info

be to do the whole report using the dam’s lifecycle,
i.e. construction, operations and decommissioning.
2. It’s agreed that the team will perform each stage

of the lifecycle and share information of all findings
Info
and reports found. The delegation of work is agreed
as follows:
a) Construction – AAAR
b) Operations – NHS
c) Decommissioning – ARS
Arvindran Subramanian Abang Ashaari Abd Rahman

TIME : 16:00 hrs – 17:00 hrs
1 Nikesh Haresh Shamdasani (chairman) / NHS
NO AGENDA REMARKS
2.0 Literature Review on Methodologies
3.0 Other Matters
1. The group’s key impacts are further refined info

according to dam lifecycle as follows:
Burdens during construction stage:
a) Deforestation activities
b) Noise pollution to the environment
c) Net GHG emissions
Burdens during operation stage:
a) Flooding
b) Erosion & Sedimentation
c) Nutrient & pH Value
d) Salinity Intrusion
e) Fish & Fish Diversity
Alternative 1: burdens if reservoir is

decommissioned:
a) Ecosystem
b) Aesthetics
c) Soil and Silt
Alternative 2: burdens if reservoir is preserved:
a) Recreational area
b) Silt
c) Tourism
info
2.0 Literature Review on Methodologies
1. Various environmental valuation methods were Info

presented. Among them are as follows:
Environment Intended Type of Value

al Valuation Application
Methodology
Info
Eco-Costs ‘99 Product design Marginal
prevention
costs
Ecoindicator99 Product design Physical
damage
functions
Ecotax 2002 Swedish LCA Political

willingness to
pay: taxes
Ecovalue08 Swedish CBA, Stated

LCA, SEA and preference
other tools. methods
EPS2000d OECD Expressed WTP

inhabitant
1998
ExternE/NEED Policy making Damage costs

S/EcoSense in energy and avoidance
Web sector costs
LIME Product Expressed WTP

design,
environmental
efficiency
analysis,
environmental
accounting
2. It’s agreed that the team will find the most

suitable method for each key impact based on own
judgement and discuss next week.
All 24/10/15
3.0 Other Matters
N/A
Abang Ashaari Abd Rahman Nikesh Shamdasani

TIME : 16:00 hrs – 17:00 hrs
1 Arvindran Subramanian (chairman) / ARS
NO AGENDA REMARKS
1.0 Key Impacts
2.0 Methodologies
3.0 Other Matters
1.0 Key Impacts
1. The group’s key impacts findings are shared. The info

findings are as follows:
Burdens during construction stage:
a) Deforestation activities:
Burdens Impacts
Construction
Deforestation Deforestation of:
a) impounded area
b) site office and

laydown area
c) temporary road
diversion
Noise pollution Noise pollution to

housing and facilities
adjacent to
construction site
Net GHG GHG emissions to

environment.
Operations
Flooding Possibility of flooding

downstream of Sungai
Sepang
Nutrient and pH Value Lower nutrient and

pH value downstream
of Sungai Sepang
Fish and Fish Diversity Lower fish population

downstream of info
Sungai Sepang, while
higher population in
reservoir.
Salinity Intrusion Lower water level at

downstream of
Sungai Sepang
causing sea water to
intrude further
upstream, causing
salinity intrusion.
Erosion & Change of erosion

Sedimentation and sedimentation
due to change of
river regime.
Alternative 1: Decommissioning of Reservoir
Ecosystem Disturbance of
established
ecosystem inside the
reservoir.
Aesthetic Diminish established

aesthetic value of the
reservoir.
Soil and Silt Built-up of soil and

silt once reservoir is
removed.
Alternative 2: Preservation of Reservoir
Preservation of Able to maintain

recreational area recreational area for
public consumption.
Silt Able to maintain silt

condition.
Tourism Continue to attract

tourism activity at
the reservoir.
2.0 Methodologies
1. The team has decided to implement the following Info

methodologies based on best method judging on
the end-point impacts. The results are as follows:
Burdens Impacts
Construction Info
Deforestation Opportunity Cost Method
Noise pollution Hedonic Cost Method

using dB(A) costing
approach
Net GHG Avoidance Cost Method
using Net GHG analysis
Operations
Flooding Contingency Valuation

Method
Nutrient and pH Value Contingency

Valuation Method
Fish and Fish Diversity Contingency

Valuation Method
Salinity Intrusion Contingency Valuation

Method
Erosion & Contingency Valuation

Sedimentation Method
Alternative 1: Decommissioning of Reservoir
Ecosystem Contingency Valuation

Method
Aesthetic Contingency Valuation

Method
Soil and Silt Contingency Valuation

Method
Alternative 2: Preservation of Reservoir
Preservation of Contingency Valuation

recreational area Method
Silt Contingency Valuation

Method All 24/10/15
Tourism Contingency Valuation

Method
3.0 Other Matters
It’s agreed for the team to perform site visit next

week to Sungai Sepang for site survey.
Nikesh Shamdasani Arvindran Subramanian

TIME : 16:00 hrs – 17:00 hrs
1 Abang Ashaari Abdul Rahman (chairman) / AAAR
NO AGENDA REMARKS
1.0 Site Survey Results
2.0 Other Matters
1.0 Site Survey Results
1. The group visited Sungai Sepang area to perform info

site survey of the project area. The findings are as
follows:
Fish farming in Sungai Sepang, which mainly breed
Siakap and Kerapu. Fish are sold to nearby
restaurants as income.
Fishermen’s boats berthing by the river bank

indicate fishermen rely on Sungai Sepang water
way to the Selat Melaka.
info
Mangroves are present along the Sungai Sepang
riverbanks.
Crustaceans and molluscs can be observed washed

up by the river banks.
Oil palm plantation at the proposed impounded area
with crops fully grown.
1 temple was observed located on the proposed

impounded area while another 2 on the proposed
site office and laydown area.
2.0 Other Matters
To proceed with final report and final presentation Info

preparations.
Arvindran Subramanian Abang Ashaari Abdul Rahman

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―( Norman Maclean, A River Runs Through It and Other Stories)

— (Lloyd Axworthy, Foreign Minister of Canada, 1999 News Conference)

“Of all our planet's activities—geological movements, the reproduction and

— (Richard Bangs & Christian Kallen, River Gods)

“Choosing to save a river is more often an act of passion than of careful

— (David Bolling, How to Save a River: Handbook for Citizen Action)

— (William C. Clark, April 1988 Speech in Racine, Wisconsin)

Executive Summary: .................................................................................................................... 6

1 : The Lifecycle and Impacts of the Sungai Sepang Dam ............................................................. 7

1.1: Aesthetic Value: .......................................................................................................... 9

1.2: Recreation Value ...................................................................................................... 10

1.3: Income Value ............................................................................................................. 11

1.4: Biodiversity Value ..................................................................................................... 12

1.5: The Dam Lifecycle : Construction Phase ............................................................. 13

1.5.2: Noise pollution to the environment ................................................................ 15

1.5.3: Greenhouse Gas emission ............................................................................... 15

1.5.4: Pollution to the downstream of the river ....................................................... 15

1.6: The Dam Lifecycle : The Operation Phase........................................................... 16

1.6.1: Erosion and Sedimentation ............................................................................. 16

1.6.2: Nutrient and pH Value ....................................................................................... 17

1.6.3: Fish Diversity and Salinity Intrusion .............................................................. 17

1.6.4: Flooding ............................................................................................................... 17

1.7: The Dam Lifecycle: The decommissioning of the Dam ..................................... 18

2: Environmental Impact Valuation. .......................................................................................... 23

2.1: Opportunity Cost Method ........................................................................................ 23

Advantages, limitations and disadvantages ........................................................... 23

2.2: Hedonic Cost Method............................................................................................... 24

2.3: Avoidance Cost Method .......................................................................................... 24

Advantages, limitations and disadvantages ........................................................... 25

2.4: Contingency Valuation Method .............................................................................. 25

Advantages, limitations and disadvantages ........................................................... 25

3: Survey/Analysis Design .......................................................................................................... 26

3.1: Noise Survey Design ................................................................................................ 26

3.1.1: Magnitude of noise emissions ........................................................................ 27

3.1.2: Variation of noise as a function of time of day ............................................ 27

3.1.3: Analysis of intermittency ................................................................................. 27

3.1.4: Analysis of tonal content ................................................................................. 27

3.2: Net GHG Analysis Design ....................................................................................... 28

3.2.2: Post-impoundment Considerations ............................................................... 29

3.2.3: Measurement Techniques ................................................................................ 29

3.3: Opportunity Cost Analysis Design ........................................................................ 31

3.4: CV Survey ................................................................................................................... 32

3.4.3: Survey Design ............................................................................................................. 34

4. CVM Questionnaire ........................................................................................................... 37

5. Scope of Work ....................................................................................................................... 42

5.1: Scope of Work for Environmental Consultant ................................................................ 42

5.2: Scope of Work for Opinion Pollsters .............................................................................. 43

Works Cited .............................................................................................................................. 46

Reflection on the Assignment.................................................................................................... 51

∑ Costs of Environmental Resource Change + ∑ Costs of Impacts of Constructing the Dam

∑ERC + ∑IC + ∑OC + ∑DC - ∑BG = TEC or TEB(if negative)

Figure 1: Impression of dam & reservoir design and river diversion

Figure 2: Picture of Heron in Sungai Sepang (Bernama, July 2013 :Pic 1)

Changes to the Resource:

1.2: Recreation Value

Figure 3: Fishing charter boats awaiting hire.

1.3: Income Value

Figure 4: Fish farms in Sepang River

Change to the Resource:

1.4: Biodiversity Value

Figure 5: Shellfish along the banks of Sungai Sepang

Change to the Resource: