From Bulbapedia, the community-driven Pokémon encyclopedia.
The Gaiva Dam (Japanese: オオツゴウダム Ōtsugō Dam) is a failed construction project that was supposed to be built on the outskirts of Fuchsia City.
Whenever construction crews tried to move in to build the dam, their trucks would always be destroyed by Diglett. In a last-ditch effort, the foreman of the project summoned Pokémon Trainers from all around to try to exterminate the Diglett. These Trainers included Gary and Ash.
Gary was the first to try and get rid of them. However, when he threw his Poké Ball, his Pokémon refused to come out. He tried again, and the same thing happened. Soon, every Trainer began throwing their Poké Balls, but none of their Pokémon would come out.
Later that night, Ash and his friends noticed the Diglett were on the move. They followed them, and discovered that Diglett and Dugtrio were the keepers of the forest. Dugtrio would plow the ground while Diglett would plant the trees. The foreman realized then that if the Gaiva Dam was completed, the entire forest would be destroyed, leaving the Pokémon without a home. It was then he decided to abandon the project.
The unfinished dam was abandoned by the construction crew, and was later destroyed completely by Team Rocket after yet another failed attempt to steal Ash's Pikachu.
Pokémon seen near Gaiva Dam