Laos denies pushing ahead with controversial dam

(Reuters) - Laos is not pushing ahead with the construction of a controversial $3.5 billion hydropower dam on the Mekong River in defiance of an agreement with neighboring countries, official media reported on Friday.

In recent weeks, environmental activists have said Ch Karnchang Pcl, the main developer of the 1,260 megawatt Xayaburi dam on the river Mekong, was carrying on with work on the project, which Laos agreed to suspend last December.

Campaigners say the dam would harm migratory fish and the livelihood of fishermen, and last week Cambodian villagers demonstrated against it.

Viraphonh Viravong, Laos' deputy energy minister, said the government had kept its promise, though geological sub-surface surveying was being carried out in the Mekong valley.

"We plan to invite development partners and Mekong River Commission member countries to visit the project site so they can see the actual development for themselves," he told the Vientiane Times daily.

"The Xayaburi project will develop one of the most transparent and modern dams in the world," he added.

The dam has come under fire from activists, people living along the river and some neighboring countries because of what they saw as an inadequate environmental impact assessment.

Viraphonh said the government had subsequently hired two independent consultants who had advised it to modify the construction plans for the dam.

The changes would ensure that 85 percent of fish would be able to pass through the dam, in line with Mekong River Commission guidelines, he said.

Vietnam, normally Laos's biggest ally, and Cambodia, have both called for the project to be suspended pending further studies.

Cambodia's National Mekong River Commission said last week that Laos had violated a 1995 agreement requiring prior consultation before starting any project on the Mekong.

(Reporting by Amy Sawitta Lefevre in Bangkok; Editing by Alan Raybould and Daniel Magnowski)