Prayut puts Cambodia hydropower deal on hold

Prayut puts Cambodia hydropower deal on hold

Water need in doubt as energy price stuns

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. (Bangkok Post file photo)
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. (Bangkok Post file photo)

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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