Egat firms to team up abroad
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THE ELECTRICITY Generating Authority of Thailand and its three subsidiaries will team up as "Egat Group" to invest in the electricity business overseas together.
The three units are Egat International (Egati), Ratchaburi Electricity Generating Holding (Ratch) and Electricity Generating (Egco).
Phongdit Photchana, president of Ratch, said last week that Egat would take the lead exploring opportunities, especially in Myanmar and Laos. Once it clinches a deal, it will discuss with the three units what stake each will invest in the projects.
This way there may be no need to dissolve Egati. Working overseas together as Egat Group would create unity in group investment.
Egat has hired Boston Consulting Group to study the regulatory constraints of Egati and find ways to enhance its flexibility in making overseas investments. The study is likely to be finished soon. The board has no plans to dissolve this subsidiary and would continue to use it as its overseas investment arm.
Earlier some Egat executives proposed that Egati be mothballed given its lack of flexibility to make investments, as it has to strictly comply with state enterprise regulations. One such rule requires that Egat submit proposed investment projects for Cabinet approval, which can take time.
Egati has been positioned to focus on projects under government-to-government collaboration, while Ratch and Egco have focused on other the potential projects. But they have never joined forces as a team to invest together.
In the past four years Egati has invested in only one project, the Nam Ngiep 1 hydropower plant in Laos, in which it holds 30 per cent. Japanese firm Kansai owns 45 per cent and Lao Holding State Enterprise 25 per cent. The 289-megawatt plant, which cost Bt27 billion, will start feeding power to the grid in 2019.
Egat has also thought of consolidating the operation and maintenance business units of Ratch and Egco with its own to become one company, which will pitch for overseas projects. The consolidation will help boost its efficiency in securing contracts.
Ratch has agreed with the idea but all want to discuss the plan further.
Sakul Pochanart, senior executive vice president for strategy and asset management at Egco, said the company is ready to follow Egat’s policy but they all have to jointly discuss the fine points.
