Egat wants China, Burma to join in huge power project

Published on Nov 16, 2002

The Electricity Generating Authority of Thailand (Egat) will invite the governments of China and Burma to jointly develop a multibillion-dollar hydroelectric scheme on the Salween River in Tak province.

Higher profit margins from the low-cost electricity generated by the Salween scheme and extending the life of existing power stations will enable Egat to save US$1.75 billion (Bt76 billion) over the next 15 years. It also means that the company will not have to build greenfield plants or buy electricity from private producers.

Egat governor Sitthiporn Ratanopas said he would again raise the issue of the Salween project with high-ranking Burmese energy officials during his trip to Rangoon next Thursday and Friday. While Egat is prepared to finance the whole project at an estimated cost of $5.5 billion, it would welcome a partnership with the governments of China and Burma.

"The total amount of water in Burma's Salween River is twice that in Bhumipol Dam, so a dam built across it could produce a lot of electricity at much lower cost. Cost per kilowatt-hour of power generated from the Salween project would be $0.02, or half what we currently pay for electricity from the Nam Tuen project in Laos," he said.

Egat will acquire all output from the 5,000-megawatt power plant as there is no demand for electricity on the Burmese side of the river. The scheme will be built along the border in the Mae Sareng district of Thailand's Tak province.

"The project would be totally owned by the governments of Thailand, Burma and possibly China with no investment from the private sector," Sittiporn added.

Egat is considering a public issue of five-year debentures in two tranches to finance the project in addition to the Bt20 billion in cash it currently holds. The board yesterday agreed in principle to the proposal, and it will now be considered at the government level.

The Egat board also approved the extension of the life span of 10 retired power stations in Rayong, Bangpakong and Bangkok with a combined capacity of 2,8000MW. The move is expected to save Egat at least $203 million over the next 15 years.

Through renovating and reconditioning existing power plants, Egat will save 30 per cent on the cost of building completely new facilities. For example, the cost of developing a new gas turbine is $400,000 compared to only $120,000 to recondition an old one, Sittiporn said.

With the renovation of retired power stations, Egat will not need to expand its production capacity again until 2009. The assumption is based on existing power development analysis that forecasts Thailand's electricity demand will grow 6.3 per cent over the next 10 years to a maximum 16,661MWs.

Nareerat Wiriyapong

THE NATION

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