Ch Karnchang sees way clear for dam

Bangkok Post 23 April 2011

Thailand's second-largest contractor is pushing ahead with the controversial Xayaburi dam in Laos despite concerns voiced by environmental activists.

Ch Karnchang (CK), hopes to sign construction and power purchase contracts for the 110 billion baht project within 30 days.

CK's Chief Executive Plew Trivisvavet said the Lao government has already decided to build the dam, and brushed aside speculation the project could be scrapped amid concerns voiced by other countries in the region about the potential impact on the Mekong River ecosystem.

"We expect to receive an official notification from the Lao government within one to two weeks to carry on with the project," he said at CK's annual shareholders meeting yesterday.

The Mekong River Commission (MRC) has expressed concerns about the possible environmental effects of the Xayaburi project, but acknowledges that the final decision will be made by Laos.

Lao officials for their part have passed on MRC concerns to CK, but the firm says environmental issues have been fully taken into account in the design of the "run-of-river" dam.

"The MRC does not yet have a say on whether the project will proceed or not," Mr Plew said in Bangkok.

The Electricity Generating Authority of Thailand (Egat) is expected to take up 95% of the power generated by the Xayaburi project. CK has committed to sell power from the 1,280-megawatt hydroelectric plant at a price of 2.19 baht per kilowatt-hour.

"We are aiming to sign the power purchase agreement and construction contracts worth 76 billion baht, as well as loan agreements with banks to finance the project, within 30 days. After the signing, we will begin construction immediately," Mr Plew said.

An investigation by last week's Sunday Post found CK trucks and labourers already were working at the site despite the lack of formal approval for the project to proceed.

Mr Plew acknowledged that road construction at the site, located 80 kilometres from Luang Prabang, had already started.

He added that CK would build a new town for villagers in the area, including hospitals and schools.

Of the total project cost, up to 8 billion baht has been budgeted for work to minimise the environmental impact of the dam, including 4 billion baht for fish ladders to enable migration and boat locks.

Somkuan Watakeekul, managing director of South East Asia Energy, the company overseeing the engineering work, said it will pay around one billion baht to 424 households forced to relocate.

He denied reports villagers were being paid compensation of just 450 baht to leave the area.

"We have paid around one billion baht as compensation. It is the responsibility of the Lao government to manage the compensation programme," Mr Somkuan said.

"Apart from fish, the run-of-the-river design will mitigate any impact on other parts of the environment, such as the forest. And money will be spent on improving the well-being of the local community."