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PM plays down impact of dam suspension on ties

Sep 06. 2017
File photo: Prayut Chan-o-cha (L) and Hun Sen (R)
File photo: Prayut Chan-o-cha (L) and Hun Sen (R)
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Prayut to visit Cambodia today but postponed project ‘not on agenda’ for bilateral talks.

PRIME MINISTER Prayut Chan-o-cha has defended his decision to suspend the Bt40-billion Stung Nam hydropower dam project, saying mishandling the venture would affect relations with Cambodia where he will hold a joint Cabinet meeting today. 

“We should not broaden the issue. Prime Minister Hun Sen aims to develop Cambodia, and Thailand will develop our own country. If there are any [mutual benefits] we will not [halt the project], otherwise we will put it on hold. This is the nature of international relations,” Prayut said yesterday.

The premier suspended the project because the 24-megawatt hydropower dam would generate expensive electricity and require a huge investment to divert fresh water from Cambodia’s Koh Kong province to supply the Eastern Economic Corridor (EEC).

The dam would supply about 300 million cubic metres of fresh water annually, which would mainly be diverted to industrial and service users in the EEC special economic zone covering Rayong, Chon Buri and Chachoengsao provinces.

According to a memorandum of understanding signed with Cambodia, Thailand agreed to buy electricity from the Stung Nam project situated near the border at the relatively high price of Bt10.75 per unit, while the country would also receive about 300 million cubic metres of fresh water free of charge.

The cost of building the dam is estimated to be Bt10 billion, with the electricity it produces costing only about Bt2.6 per unit, and three cubic metres of water being used to produce each unit of electricity.

While the fresh water released from the dam would be free of charge, Thailand would need to build a 200-kilometre pipeline to transport it, which would cost an additional Bt30 billion.

“Indeed, Cambodia is very kind to us as they would give us free water, but we have to invest a lot to take the water, therefore we must think about that,” Prayut said. 

“We have to calculate this based on national interest, not the personal interest of any individuals,” he said, suggesting he was not familiar with the investor. “If I make a decision, the Cabinet does not need to consider [the project].” 

The government in Phnom Penh commissioned Steung Meteuk Hydropower Co to work on the project with the Electricity Generating Authority of Thailand. There has been no Cambodian reaction so far to Prayut’s decision. 

Critics have said the project should be presented in a more transparent manner since the separate prices of electricity and fresh water were not clear, but hidden in the electricity tariff that was set at Bt10.75 per unit, compared to the average power tariff of less than Bt4 per unit in Thailand.

‘Reasonable price’

Prasert Sinsukprasert, deputy chief of the National Energy Policy Office, reiterated yesterday that the premier had decided to suspend the agreement due to conflicting information about the project, its cost and the water supply. 

Earlier, the Ministry of Agriculture and Cooperatives concluded that the project was not necessary as the country would have sufficient water resources over the next decade. Prasert said fresh water in Thailand would satisfy demand for 12 years, but the industrial and agriculture sectors in the Eastern region might need more water in the next 50 years. 

“Consultations between the Water Resource Department and Irrigation Department could not reach a consensus over domestic demand and the supply of fresh water,” he said. “It would be better to study more.” 

The electricity cost of Bt10.75 per unit might appear expensive, but if the value of the free water was factored in, the price was reasonable, he said. “With such a formula, the electricity would be Bt2.6 per unit and the water just Bt2.8 per cubic metre.” 

Energy Minister Anantaporn Kanjanarat said his ministry would comply with Prayut’s instruction and the national strategic plan for water management. “Cooperation with Cambodia on this matter is a loose cooperation without a timeframe, so we can implement it when it is necessary,” he said. 

Prayut will pay a one-day official visit to Phnom Penh today for the 3rd Thailand-Cambodia Joint Cabinet Retreat meeting. He planned to emphasise strengthening cooperation in border development, labour, trade and investment, connectivity, and regional and international frameworks. 

During the visit, Prayut and his Cambodian counterpart Hun Sen plan to witness the signing of two documents on a joint declaration regarding the meeting and the Agreement for the Avoidance of Double Taxation, according to a press statement.

Deputy Government Spokesperson Lt-General Werachon Sukhondhapatipak said energy-related agendas, including the power plant, would not be raised today.

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