Thursday, September 7, 2017

Thailand: Prayut puts Cambodia hydropower deal on hold

Thailand: Prayut puts Cambodia hydropower deal on hold

Prime Minister Prayut Chan-o-cha has ordered authorities to delay investment
in the Stung Nam hydropower project and buying power from Cambodia, amid
mounting criticism over unusually high prices in the proposed contract.

The prime minister had originally been scheduled to witness the joint
investment contract signing ceremony between the Electricity Generating
Authority of Thailand (Egat) and its Cambodian counterpart during his visit
to Phnom Penh tomorrow.

The order to delay the purchase came after the Royal Irrigation Department
said it can supply sufficient raw water to the Eastern Economic Corridor
(EEC) zone without the need for water from the Cambodian hydropower project.

The Stung Nam project is in fact a small power project with a capacity of
only 24 megawatts, and Thailand's main interest is not in power supply but
water. The dams can supply as much as 300 million cubic metres of water per
year, a source close to the project said.

Under the plan, Egat International, a subsidiary of Egat, will hold a 50%
stake in the project.

In 2015, Thailand made plans to invest in the project with Cambodia to
obtain power and, more importantly, water to feed the ambitious EEC project,
covering the three eastern provinces of Chon Buri, Rayong and Chachoengsao.

Under the initial purchase plan, Egat will buy electricity from the Stung
Nam project at a cost of 10.75 baht per kilowatt hour (unit).

Authorities have claimed that despite the price, the water from the project
will be provided to Thailand for "free". But critics are not convinced as
the 10.75 baht per unit price is much higher than the price of power in
Thailand, which is around 4 baht per unit.

Prasert Sinsukprasert, deputy director-general of the Energy Policy and
Planning Office under the Energy Ministry, said Gen Prayut has ordered
agencies concerned to delay the purchase contract until the Agriculture and
Cooperatives Ministry has studied whether the water supply to feed the EEC
zone is sufficient over the long term.

"The minister needs to figure out if we need water from this project. If
not, the contract is unnecessary," he said.

He said the Agriculture Ministry, in fact, could come up with a Plan B to
develop a large reservoir in the eastern part of Thailand that could provide
raw water to the EEC area, said Mr Prasert.

He added the ministry's study would lead to a final decision on whether the
Thai government would proceed with its investment of 10 billion baht in the
dams' construction.

Somkiat Prajamwong, deputy director-general of the Royal Irrigation
Department, said yesterday that Thailand's EEC zone would not need water
from the Stung Nam project for the next 10 years.

The department has a 10-year water management plan for the EEC area, which
includes increasing the capacity for water storage by at least 500 million
cubic metres.

The plan includes expansion of existing reservoirs and construction of new
ones.

"Over the next 10 years, Thailand has no need for water from Cambodia to
feed the area, but with expected rapid growth of industrial areas in the
zone, it has to carry out a clear study on water demand over the long run,"
he said.

The 10.75-baht rate for power was estimated by a previous Egat study, based
on construction costs of the 115-kilovoltage transmission line that needs to
be built and the construction of a water pipeline to transport raw water
from the dams in Cambodia to Thailand's EEC.

Mr Prasert expected it would take some time for a decision to be made on the
project since the government would have to wait for a clear answer from the
Royal Thai Irrigation Department on whether Thailand needs to have raw water
supplied by Cambodia.

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Link to Original Article:
http://www.bangkokpost.com/news/general/1318955/prayut-puts-cambodia-hydropo
wer-deal-on-hold


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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com

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