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DAM-L LS: Thailand delays power purchases from Laos (fwd)

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Date: Fri, 13 Jul 2001 11:19:19 -0700 (PDT)
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Subject: LS: Thailand delays power purchases from Laos
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061501 ELECTRICITY / THAI INVESTORS GLUM -- Thailand suspends power deal 
halfway (BKK Post)

Support for Laos 'cannot be burden'

Saritdet Marukatat

Thailand will meet only half its commitment to buy electricity from Laos, 
suspending additional purchases until demand and economic growth make the 
deals worthwhile, Prime Minister Thaksin Shinawatra said yesterday.

Industry observers saw the announcement as a blow for the Laotian 
government, which relies heavily on hard currency from power sales to 
Thailand to fund development.

Mr Thaksin told Thai investors in Vientiane that the government would put 
on hold talks to buy electricity from Laos beyond the Nam Thuen 2 
hydropower project.

Nam Thuen 2 will supply 900 megawatts of electricity to Thailand and bring 
the total power purchase from Laos to 1,500 megawatts. The power comes from 
three projects.

Previous governments had committed Thailand to buying 3,000 megawatts. The 
decision prompted Thai investors to seek permission to build dams in Laos 
in the hope of selling their output to Thailand.

Despite suspending the purchases, Mr Thaksin told his Laotian counterpart 
on Wednesday that Thailand would still honour all agreements with Laos. 
Yesterday, he repeated the message, but added that Thai support "will not 
be a burden on Thailand".

The Nam Thuen 2 project is sponsored by a consortium of investors including 
the Electricity Generating Plc (Egco) and Italian-Thai Plc.

Mr Thaksin's remarks brought relief for an Egco representative at the 
meeting but drew grim looks from other Thai investors in the Laotian power 
industry. The Nam Nguem 3, Nam Thuen 3 and Hongsa Lignite projects all have 
Thais as major or minor shareholders.

Sithiporn Ratanopas, the managing director of Egco, praised the Thaksin 
government for making clear Thailand's strategy on power investment in 
Laos. He expected Egat and investors in the Nam Thuen 2 project to agree on 
pricing next month and officially sign the deal in December. The dam could 
begin generating power in 2007.

Other Thai investors tried to persuade Mr Thaksin to continue negotiations 
with Laos to buy more electricity, citing job creation for Laotians and 
Thais, imports of construction materials from Thailand and benefits from 
lower retail power prices.

Sukit Ngan-dhavee of the Hongsa Lignite project asked Mr Thaksin whether 
other projects, including Hongsa's, had "missed the train".

"I'm straightforward," Mr Thaksin said. "Yes, you've already missed the 
train now. But it doesn't necessarily mean there won't be a new one in the 
future".

Although Mr Thaksin gave no guarantee on their future, he said: "We will be 
fair".

Meanwhile, Thailand and Laos yesterday agreed to revive a committee aimed 
at settling business disputes. Foreign Minister Surakiart Sathirathai said 
the team, which had stopped work two years ago because it had been 
ineffective, would reconvene immediately after a meeting of the 
Thai-Laotian joint commission in Chiang Rai in September. He said more 
transport firms would be allowed to operate between the two countries, in 
order to reduce costs. Trade would be encouraged by acceptance of local 
currencies.

There are about 150 Thai traders and investors in Laos.

© Copyright The Post Publishing Public Co., Ltd. 2001

http://www.bangkokpost.com/today/150601_Business17.html


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