Ch Karnchang signs construction contract for Xayaburi dam

The Nation 17 April 2012 

Despite current rows over the future of Xayaburi hydropower project, Ch Karnchang Plc has made another move to make the project materialised.

The company on Tuesday informed the Stock Exchange of Thailand that its subsidiary, Ch Karnchang (Lao) Co Ltd, had signed the Bt51.8 billion-worth contract for the engineering, procurement and construction of the Xayaburi hydroelectric power project with Xayaburi Power Co Ltd.

Established in 2010 with initial capital of Bt800 million, Xayaburi Power is a subsidiary of Ch Karnchang. It is the concessionaire for the 1,285-megawatt power project, which is estimated to cost a total investment of Bt115 billion.

As of 4.15pm, Ch Karnchang’s share price was Bt8.15, 0.62 per cent or Bt0.05 up from the previous closing.

In the filing to the stock exchange, the construction is scheduled to start on March 15 for completion in the next 96 months. Ninety five per cent of the power would be sold to Thailand.

The project faces stiff protests from environmentalists who fear that the dam above the Mekong River would affect the ecological system and millions of villagers. The Mekong River Commission, consisting of four countries - Laos, Thailand, Vietnam and Cambodia, in 2010 agreed to subject this mainstream dam to approval by the region’s governments through a regional decision-making process called the "Procedures for Notification, Prior Consultation and Agreement" (PNPCA).

Due to the massive risk and impacts associated with the Xayaburi and other Mekong mainstream dams, a Strategic Environmental Assessment report published in October 2010 by the MRC recommends that decision-making on these dams be deferred for 10 years.

In December 2011, the four governments met once more and agreed to postpone the decision over Xayaburi until a joint study on the transboundary impacts of the Mekong mainstream dams was carried out.