Fish fix adds B10bn to Xayaburi cost
Laotian plant set for completion in 2019
The Xayaburi hydropower plant's construction cost will rise by 10 billion baht with the addition of a system to alleviate effects on fish migration in the Mekong River.
Work is proceeding on the 1,285-megawatt Xayaburi hydropower plant in northern Laos. Developer CK Power has tried to put lingering social and environmental concerns to rest.
The move is aimed at reducing Vietnamese and Cambodian opposition to the 1,285-megawatt project in Laos and assuring the plant's output can feed into the grid as scheduled by 2019.
The 10 billion baht is on top of the 115-billion-baht investment cost of the plant, so developer CK Power (CKP) has negotiated compensation from the Laotian government for the extra amount, said Somkuan Watakeekul, an adviser to CKP's board.
SET-listed CKP last month reached an agreement to buy a 30% stake in Xayaburi Power (XPCL), operator of the Xayaburi hydropower plant, from its parent firm, SET-listed Ch. Karnchang (CK), and the rights offering of XPCL in a deal worth 5.51 billion.
The plan is part of the CK group's business restructuring.
Prasert: Crucial to avoid further delays
The other shareholders in XPCL are PTT subsidiary Natee Synergy (25%), Electricity Generating Plc (12.5%), Electricite du Laos (20%), Bangkok Expressway Plc (7.5%) and PT Construction and Irrigation Co (5%).
"The fish migration system is a crucial part of the project, as the dam is located in northern Laos and is the country's first hydroelectric dam on the Mekong River," Mr Somkuan said.
"Whatever the cost to address the fish migration problem will be, CK must accept, but the Laotian government will find a solution to compensate for the cost overrun."
He voiced confidence the Xayaburi project would finish on time in 2019, adding that CK had solved the social and environmental issues that dogged the plant.
"We've already relocated 15 villages with 617 families affected by the construction to a new location and provided them essential infrastructure such as electricity, roads, water, schools, a market and even careers," Mr Somkuan added.
Prasert Marittanaporn, a senior executive vice-president of CK, said two-thirds of the Xayaburi project's cost was financed with loans from five Thai commercial banks — Bangkok Bank, Krungthai Bank, Siam Commercial Bank, Kasikornbank and Tisco Bank.
It is essential for the project to finish on time, he said.
"For every one-year delay, the cost will rise by about 30 billion baht," Mr Prasert said
The Xayaburi hydropower plant will generate 1,285 MW, of which 1,225 MW will be sold to the Electricity Authority of Thailand and contribute 13-15 billion baht in annual revenue to CK.
CKP plans to buy the Xayaburi project once the dam's construction has been completed.
Separately, CK is seeking to build a hydroelectric project on the Salawin River in Myanmar with power generation of up to 7,000 MW.
The company hopes to have several joint partners and conclude the project within three years.
CKP shares closed yesterday on the SET at 17.40 baht, up 10 satang, in trade worth 37.3 million baht.
CK closed at 29.25 baht, unchanged, in trade worth 267 million baht.