EGAT upbeat on Hatgyi prospects

Key Issues: 

The Nation 17 December 2008

By Watcharapong Thongrung

The Electricity Authority of Thailand targets early next year to set up the joint venture to develop the Hatgyi dam construction project on the Salween River of Burma.

Egat governor Sombat Santijaree said yesterday that the feasibility study and the environmental impact assessment had been completed and the project would yield a high return while bolstering the country's energy security.

Next, Egat, the Burmese government and Chinese state enterprise Sinohydro Corp will enter into tripartite negotiations on forming the consortium to manage the 1.4-gigawatt plant.

According to the Energy Ministry's preliminary plan, Egat will hold 45 per cent of the joint venture, Sinohydro 40 per cent and Burma 15 per cent.

The average production cost will be Bt1.60 per kilowatt per hour. The project will promise a return on investment of 19 per cent.

China will fully finance the total cost of construction, estimated at about US$1.4 billion (Bt49.4 billion), with project loans.

The plant will sell its output to Thailand and is expected to start feeding energy into the national grid in 2015 or 2016.

The electricity from the project is expected to be offered at a low price, since the power-purchasing agreement will be settled on a government-to-government basis.

However, the project has been opposed by non-governmental organisations on concern that it will violate human rights, given that part of the project lies in an area occupied by minority groups in Burma.

According to the NGOs, Sob Moei village in Mae Hong Son is expected to be affected because the dam will block the Salween River that runs into Burma and will induce flooding in Sob Moei and other villages in the area.