Preliminary work on the Xiaonanhai hydroelectric dam began on March 29th, outlined by the Shanghai Daily article above. While technically only a preliminary permit has been issued, with plans to 'fully consider other impacts' (including conducting an environmental assessment), due to China’s unique policy-making process this means the dam is likely to go ahead.
[Editors note: the controversies with the Xiaonanhai dam, a long-time worry of environmentalists in China, have been reviewed here
among other places.]
The official process of hydropower development is that after a feasibility study is approved only preliminary work may commence: this work is known as santongyiping (三通一平). The project is not to officially begin until an Environmental Impact Assessment (EIA) is completed and approved. However, the tens of billions of RMB (billions of USD) invested into this preliminary work would represent a significant risk to the State-Owned Enterprise (SOE) that undertakes the project [editor’s note: the implication in the article is that once a project begins it's unlikely that it will be reassessed]. The former President of the Three Gorges Corp. Lu Youmei (the enterprise responsible for the Xiaonanhai dam) has stated that this is an important flaw in China’s policy-making process for hydroelectric projects.