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dam-l LS: NEPO agrees to IPO of Ratchaburi and NT2 purchases

The Nation / 27 April 2000

Power plant IPO on schedule

   THE Ratchaburi power plant initial public offering will be launched in
September as scheduled, the National Energy Policy Office (Nepo) informed
the supreme national energy board yesterday.
   The share offering is expected to raise Bt50 billion and the Ratchaburi
power plant offering is set to be the largestever privatisation arrangement
for the Thai energy sector, as well as being the largest stock market
listing since the start of the 1997 economic crisis.
   Nepo secretary-general Piyasvasti Amranand, who reported on the progress
of the privatisation plan to the National Energy Policy Committee yesterday,
said the IPO price was also expected to be good because the power plant is
already up and running and generating income.
   "The investors will have a good idea of how much revenue the Ratchaburi
power plant could generate," the official explained.
   But to ensure the success of the stocklisting, Piyasvasti said the
Ratchaburi Power Company will need to wrap up its negotiations for
electricity sales and natural gas purchase contracts with the Electricity
Generating Authority of Thailand (Egat) and the Petroleum Authority of
Thailand.
   The Ratchaburi power plant, which uses natural gas as its main fuel, is
facing difficulties in agreeing its gaspurchase contract with the PTT. The
petroleum authority is urging Ratchaburi and Egat to share some of the
burden for its failure to take the full contractual amount of gas from the
gas producers by adding a takeorpay condition in the gas sales contracts to
be agreed with the power producers.
   But Piyasvasti said the gas sale contract for the Ratchaburi power plant
should be similar to those that the PTT inked earlier with other independent
power producers and should not include the takeorpay clause.
   "Regarding its problem with the gas producers, the PTT should work it out
with Egat not the Ratchaburi Power company," said the Nepo chief.
   During yesterday's meeting the national energy board also gave its
approval for Egat to buy electricity from the Laobased Nam Theun II dam
project at a price of US4.219 cents per kilowatthour. Egat would guarantee a
minimum purchase from the project of 5,354 million kilowattshour per annum
over a period of 25 years. Nepo did not submit its plan to the energy board
to introduce an electricity trading market or the socalled "power pool" as
was previously scheduled. Piyasvasti said Egat had asked Nepo to delay the
plan submission to allow the power agency's board of directors' time to
review plans to cope with the expected competition from the "power pool".

BY Watcharapong Thongrung
The Nation

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