PRIME MINISTER Prayut Chan-o-cha.
PRIME MINISTER Prayut Chan-o-cha.

Prayut suspends Bt40-bn Cambodian dam project

politics September 06, 2017 01:00

By THE NATION

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PM orders reassessment of water demand related to Stung Nam deal.



PRIME MINISTER Prayut Chan-o-cha, who is scheduled to visit Cambodia tomorrow, has ordered a suspension of the Bt40-billion project to buy electricity and fresh water from Cambodia’s Stung Nam hydropower scheme.

Prasert Sinsukprasert, deputy chief of the National Energy Policy Office, said the premier wanted the Agriculture and Agricultural Cooperatives Ministry to review the country’s demand for fresh water over the next decade before going ahead with the controversial Cambodian project.

According to a memorandum of understanding signed with Cambodia, Thailand agreed to buy electricity from the 24-megawatt Stung Nam hydropower project situated near the border at the relatively high price of Bt10.75 per unit, but the country would also get about 300 million cubic metres of fresh water free of charge.

The fresh water supply is meant to serve the Eastern Economic Corridor (EEC) programme, which is expected to have a huge demand for fresh water for industrial and other uses.

Prasert said the Agriculture Ministry had to present a credible forecast that there would be sufficient fresh water for various uses in the long term after the Irrigation Department argued that the fresh water supply would be sufficient for the next 12 years.

The Cambodian project could have been affected by inaccurate water demand forecasts, especially regarding the Agriculture Ministry’s projections, Prasert said.

There have been five inter-ministerial meetings that concluded that the EEC mega-investment programme and Eastern provinces would need a combined 12,000 million cubic metres, with a projected shortfall of 6,000 million cubic metres.

As a result, the Stung Nam hydropower project was seen as one of the solutions to boost the water supply.

He said the EEC special economic zone was crucial to the country’s growth over the next several decades, so the government had to ensure that there would be enough fresh water resources.

Regarding the high electricity price of Bt10.75 per unit, he said the figures were based on a feasibility study conducted by the Electricity Generating Authority of Thailand (Egat).

The cost of building the Stung Nam Dam is estimated between Bt9 billion and Bt10 billion, with the electricity produced by the hydropower dam costing about Bt2.6 per unit, and three cubic metres of water used to produce each unit of electricity. 

‘Power prices unaffected’

The price of one cubic metre of water is estimated to be Bt2.8, resulting in the combined price of Bt10.75 per unit of electricity.

Annually, about 300 million cubic metres of fresh water were supposed to be delivered to Thailand.

The water supply was to be transported across the border to Thailand’s eastern province of Rayong where the EEC special economic zone will be situated. Besides the Bt10-billion dam, construction of a water transport system covering the length of about 200 kilometres would cost an additional Bt30 billion.

Prasert said the high electricity price was unlikely to affect the electricity pricing system in Thailand since fresh water would be sold to private companies operating in the EEC special economic zone to cover the high power costs.

In addition, the amount of electricity from the project would be relatively small, as Egat usually buys power from countries such as Laos at a lower price.

Prayut will pay a one-day official visit to Phnom Penh tomorrow 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.