Xayaburi project to supply power on schedule

The project, which started construction in 2012, has raised concerns by many groups on its potential impacts on the environment and communities.   
“Today, things are under control. Six months ago, I would not have had as much confidence to speak out like this,” said Somkuan Watakeekul, adviser to the board of directors of CK Power. The Xayaburi project is the responsibility of CK Power, a 30-per-cent-owned subsidiary of Ch Karnchang.
Speaking at a presentation during a press visit to the project in Laos last weekend, he said the first phase of the construction was completed and the group would move into the second phase after the river diversion.
He said the group had added seven spillway gates for safety and four low-level outlets for sediment flushing as requested by the Laotian government, which added 10 per cent to the project’s Bt115-billion budget.
“The group will have to negotiate with the Laotian government asking for compensation for the higher costs resulting from its requests,” he said.
Of the total budget, about two-thirds or Bt78 billion is covered by project financing with five commercial banks and the Export-Import Bank of Thailand and the remainder by the company’s working capital.
Somkuan noted that the Bt115-billion total investment cost included Bt26 billion in interest if the project stays on schedule. However, should it be delayed by as much as a year for any reason, that would push up the interest costs to Bt30 billion.
He said Xayaburi was the first mainstream run-of-the-river hydropower project (that is, not utilising water storage) that would have no impacts on neighbouring countries, providing a 500-ton navigation lock, fish-passing facilities and sediment passage.
He added that there were only 15 villages with 617 families affected, compared with other projects with more than 1,000 families affected. However, the group has done the resettlement work step by step with allocation of land, houses, infrastructure, and public facilities as well as special assistance for early stages of relocation. 
Moreover, the newly modified dams provided for the navigation of 500-ton ships all year around and fish passage blended with natural conditions, Somkuan said. 
Located in northern Laos, the Xayaburi project is the most advanced of 11 large hydropower projects with an estimated capacity of 10,209MW planned for the Lower Mekong Basin. The project is expected to generate 1,258MW of electricity, around 95 per cent of which will be exported to Thailand.
The Xayaburi project is the only one under construction, while the remaining projects are still in the planning stages.
The Ch Karnchang group has a power purchase contract with the Electricity Generating Authority of Thailand for 29 years at Bt2.20 per unit based on estimated supply of 7 billion units a year. The project’s return on investment is estimated at about 12-13 per cent annually.
Somkuan said the could increase the river’s flow rate to 5,000 cubic feet per second, higher than the current estimate of 4,000 cubic feet per second.