June 2, 2012
The SET-listed Ch Karnchang Plc (CK), one of the country’s largest contractors, remains committed to the Xayaburi hydroelectric dam in Laos despite the project having been officially halted.
“The Lao government will ultimately make the final decision on whether the project will go ahead, but we want to wait for all stakeholders in the Greater Mekong Subregion to agree with it,” said Aswin Kongsiri, chairman of the CK board.
He said the company, which has been granted a concession to develop the 1,280-megawatt project on the Mekong River, has so far yet to start construction.
“We have thus focused on project preparation, mainly financing and the environmental impact report,” said Mr Aswin.
One of 11 planned dams along the Mekong River, Xayaburi faces strong opposition from environmentalists and some members of the four-nation Mekong River Commission, especially Vietnam.
Laos postponed construction of the dam last month.
Xayaburi Power, 30% owned by CK, Thailand’s third-largest construction company by market capitalisation, has signed an 85-billion-baht loan agreement with six banks and also a 29-year power purchase agreement with the Electricity Generating Authority of Thailand (Egat).
“Egat remains committed and is very keen to buy electricity from Xayaburi, as hydropower is very cheap,” said Mr Aswin.
He is optimistic the US$3.8-billion project can be completed within eight years as planned, by 2020, if construction begins in the next four or five months.
“We’ve added some spare time based on our previous experiences in the Nam Ngum and Nam Theun projects,” said Mr Aswin, referring to two other projects in Laos.
At the World Economic Forum, Mr Aswin said huge infrastructure projects such as power plants normally take a long time to develop.
This is especially true when the investment is in another country and requires approval from the local government and non-profit organisations.
Italian-Thai Development’s Dawei port project in Myanmar, for example, will need a long time to take shape.
Basic infrastructure such as roads, electricity and railroads require massive capital expenditures, and normally governments invest.
“It will take some time for Dawei to generate revenue,” said Mr Aswin.
CK shares closed yesterday on the SET at 6.75 baht, down 10 satang, in trade worth 14.1 million baht.