"We held the groundbreaking ceremony today," Rewat Suwanakitti, the deputy managing director of Xayaburi Power, the dam's operator, was quoted as saying by The New York Times Wednesday. "The Lao authorities told us that we could begin construction."
Rewat said Wednesday's ceremony was attended by senior officials from the Laotian government and diplomats from Vietnam and Cambodia.
Laos Prime Minister Thongsing Thammavong had told The Wall Street Journal on Tuesday that the project was awaiting further study.
Last December Cambodia, Laos, Thailand and Vietnam -- the countries that comprise the Mekong River Commission -- decided to delay building the dam pending further studies on the sustainable management of the Mekong River, including impacts from mainstream hydropower development projects but no timeline was set for completion of such studies.
Thai construction company CH. Karnchang has for the last two years been carving roads through the jungle to the remote site and setting up equipment.
The U.S. State Department said Monday that it was concerned that construction is proceeding on the project before impact studies have been completed, noting that the members of the MRC haven't reached consensus on whether the project should proceed.
"The extent and severity of impacts from the dam on an ecosystem that provides food security and livelihoods for millions are still unknown," the department said in a statement.
California water rights group International Rivers says Laos' promise to cooperate with neighboring countries had never been genuine.
"The project has always continued on schedule and was never actually delayed," the group's Southeast Asia policy coordinator Kirk Herbertson told the BBC. "Construction on the project is continuing now because the wet season has ended, not because the environmental studies are completed."
The Xayaburi, the first of 11 proposed dams on the lower Mekong, is expected to produce lucrative electricity revenues for Laos.
About 95 percent of the dam's 1,260-megawatt capacity is intended for export to Thailand, which is financing the project. Thailand would operate the dam, turning it over to Laos after 30 years.
Laos Deputy Energy Minister Viraphonh Virawong said concerns about fish migration and sediment flow had been addressed through modifications to the original design of the dam, at a cost of more than $100 million.
"I am very confident that we will not have any adverse impacts on the Mekong River," the minister told the BBC. "But any development will have changes. We have to balance between the benefits and the costs."