Ch Karnchang signs Xayaburi project deal

The contractor yesterday informed the Stock Exchange of Thailand that its subsidiary, Ch Karnchang (Lao) Co, had signed a Bt51.8-billion engineering, procurement and construction contract for the Xayaburi hydroelectric power plant with Xayaburi Power Co.

Established in 2010 with initial capital of Bt800 million, Xayaburi Power is a subsidiary of Ch Karnchang. It holds a concession for the 1.28-gigawatt power project, which is estimated to cost Bt115 billion.

Ch Karnchang’s stock closed at Bt8.10 yesterday, unchanged from the previous closing price. It hit Bt8.30 per share during the day.

Plew Trivisvavet, chief executive officer of Ch Karnchang, said construction was scheduled to commence on March 15 for completion in 96 months. When it starts up, 95 per cent of the output 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 (MRC), comprising 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”.

Because of the massive risk and impacts associated with the Xayaburi and other Mekong mainstream dams, a strategic environmental assessment published in October 2010 by the MRC recommends that decision-making on these dams be deferred for 10 years.

Last December, the four governments met again and agreed to postpone the decision over Xayaburi until a joint study on the trans-boundary impacts of the Mekong mainstream dams was carried out.