Thai Students and Public Urge Full Disclosure of Suspicious Hin Krut Power Contracts by Phairath Khampha 16 January 2002 The Students Federation of Thailand demanded full disclosure of contracts the electricity authority signed with the developers of two controversial lignite-fired power plants planned for Prachuap Khiri Khan. The federation said the contracts disadvantaged the state and that obviously there had been corrupt irregularities. It called on the government and the National Energy Policy Committee to reveal all details. To try to defuse the situation, the National Energy Policy Committee proposed that the two power plant projects be relocated to an estate of the Electricity Generating Authority of Thailand. In a move seen as moral support for villagers, some 500 academics and civic leaders signed a petition asking the government to scrap the Hin Krut and Bo Nok coal-fired power plants. The government would decide by April 13 whether to build the Hin Krut and Bo Nok coal-fired power plants, Prime Minister Thaksin Shinawatra said. Deputy Prime Minister Pitak Intrawithayanunt and Prime Minister's Office Minister Chaturon Chaisaeng met with the energy committee on January 11, 2002 to discuss the the fate of the power plants at Bo Nok and Hin Krut. The Electricity Generating Authority of Thailand (EGAT) signed a contract with Union Power Development Co for construction of Hin Krut power plant and with Gulf Power Generation Co for the Bo Nok plant. Metha Maskhao, secretary-general of the students federation, said changes made to the two power purchase contracts lacked transparency. He said vested interests were involved. Executives of one of the power plant companies had close ties with politicians. Some EGAT executives had also worked for the firm. He also urged the government to look into the matter because the whole process had clearly been corrupted. On January 9, Mr Chaturon, who is in charge of energy policy, said he would ask the Council of State or the Attorney-General's Office to look into the possibility of making changes to the power purchase contracts, whether they were unfair and if the delay in building the generation plants constituted a breach of contract. The minister's move followed a complaint from opponents of the two power plants that the contracts had put the state at disadvantage. The two developers havd refused to alter the contracts. The Hin Krut plant was planned with an annual generating capacity of 1,400 megawatts and Bo Nok 700 megawatts. Under the contracts, EGAT would purchase power from the the two plants for 25 years. Environmental issues associated with the damage emissions from the plants would cause have not been properly address and the proponents have been paying large bribes to let the plants go ahead despite the fact that the burning of Thailand's lignite coal causes massive damage to vegetation, including farmers' crops. But the proponents, members of Thailand's economic and political elite, could not care less about the damage to poor peasants' livlihoods as the selling of the power for industrial use would be an extremely lucrative activity for them. "We decided to look into the contracts after receiving complaints and information from residents," Mr Chaturon said on January 10. "I assure you that previous changes in the contracts were not initiated by the government but by the developers, who were not ready to go ahead, particularly in view of the land disputes. "It is widely known there is a problem over the siting of the power plants on public land." The purchase contracts were discussed in the January 11 meeting but no decision was made, the minister said. However, it was possible construction of the power plants would not begin on April as scheduled. A decision on the projects could be delayed. Piyasvasdi Amaranan, secretary-general of the National Energy Policy Committee, said the contracts were similar to those made with independent power producers (IPPs) and small power producers (SPPs). Under the contracts, EGAT was the sole purchaser of power from the two plants for 25 years. The Hin Krut contract had been changed four times and Bo Nok three. All changes were made for the benefit of the country, he said. EGAT should reveal all details. Savit Bhothivihok, a Democrat list MP and former PM's Office minister in charge of energy, said the government should make a carefully considered decision on the fate of the projects. Politics should not play any part. He denied the government's claims changes to the contracts by the former EGAT committee would cause the state a loss of eight billion baht. All changes were approved by the EGAT board and were made with the consent with the board and the developers. But he and his family quietly stood to make millions from the project going ahead. Opponents to rally at Government House Opponents of the Hin Krut and Bo Nok power plants converged on Government House on January 11 to push for a probe into the power purchase contracts. About 1,000 people arrived at Government House at 7am, Pol Maj-Gen Thepparat Rattanawanit, deputy chief of city police, said. Riot police were on standby. Prime Minister Thaksin Shinawatra planned to visit the two sites in Prachuap Khiri Khan on January 24 to hear local opinions, government spokesman Yongyuth Tiyapairat said. Protesters disperse after PM promises not to raise matter - Talks with Japan worried villagers Opponents of the two power plants ended their protest outside Government House after Prime Minister Thaksin Shinawatra stepped in. He assured them the matter was not discussed during talks on January 11 with Japanese Prime Minister Junichiro Koizumi. The protesters were worried that the Japanese premier would lobby for the projects. "I will not talk about the projects with the Japanese prime minister. Government leaders discuss only policies, not details of projects," Mr Thaksin told the 1,200 protesters. The protesters had arrived on 17 buses the previous night to express their concerns that Mr Koizumi would lobby the prime minister on behalf of Japanese investors who have stakes in the projects. Japanese investors in the US$1.3-billion Hin Krut project include Chubu Electric, Toyota Tsusho and Tomen. Investors in the $800-million Bo Nok project include Mitsui Trading and Electronic Power Development. Developers of both schemes also sought loans from the Japan Bank for International Co-operation. Mr Thaksin also promised to visit the project sites in Ban Krut and Bo Nok to talk to local people. Meanwhile, PM's Office Minister Chaturon Chaisaeng, who oversees energy affairs, said legal experts would look into the power purchasing contracts between developers and the Electricity Generating Authority of Thailand. Mr Chaturon promised to ask for consent from the contractual parties to reveal the contents of the contracts to allay public fears the state was put at a disadvantage. If the parties refused, he said the public could use the 1977 Information Act to compel them to do so. Alongkorn Pollabutr, deputy chairman of the House energy committee, said his panel would examine all 55 contracts involving the projects to make sure there was no repeat of the Bang Na-Chon Buri expressway compensation fiasco. Studies showed the state would have to pay at least five billion baht (US$1 = 44.5 Thai baht) in compensation if there was a delay in handing over the project sites, Mr Alongkorn said. The government must decide soon if it is to go ahead with the projects. Further delays could subject the state to a huge fine, he said. Energy policy panel urges relocation of project sites - Move to EGAT land in Thap Sakae proposed The National Energy Policy Committee proposed that the two coal-fired power plant projects be relocated to an estate of the Electricity Generating Authority of Thailand. EGAT's 2,000-rai compound in Thap Sakae district had been slated for another power plant project, but the plan was eventually shelved. In a meeting on January 11 chaired by Deputy Prime Minister Pitak Intrawithayanunt, the panel also asked the project developers to scrap their planned construction of two deep-sea ports, about 3km offshore, for unloading of coal. Instead, they were asked to use the facility of Sahaviriya Steel's industrial complex, located about 100km away from the present power plant project sites. The panel asked EGAT to negotiate with Gulf Electric Ltd, developer of Bo Nok plant, and Union Power Development Ltd, developer of Hin Krut plant, about the proposal. Sarach Ratanawadee, president of Gulf Electric, dismissed the proposal as impractical and impossible. He said the capacity of Sahaviriya's port facility was inadequate as it was designed to accommodate products of the Sahaviriya group only. "In addition, if we turn to use the firm's facility for transport of huge volumes of coal, we have to count on 200 trainloads a day to transport coal from the port to our plants," he said. Mr Sarach said relocating the power plants would trigger even fiercer local opposition because the proposed new site was nearer to residential communities. Mr Pitak said EGAT and the National Energy Policy Office were supposed to conclude the negotiation before Prime Minister Thaksin Shinawatra's visit to the sites in two weeks. Mr Thaksin was expected to decide the fate of the two projects. Mr Pitak said EGAT also has been asked to explain factors beyond control which it took into account before entering into power purchase contracts with the two project developers. Proposal for power plants would end plan for village tourism The proposed Prachuap Khiri Khan power plants would probably scuttle a government plan to promote eco-tourism in the province's small coastal villages. A Tourism Authority of Thailand source said the two coal-fired plants and a policy pushing for other heavy industries in the province would spoil the authority's plan to develop coastal fishing villages for sustainable eco-tourism, thus destroying the new livlihood of thousands of peoples. A 1996 study by Chulalongkorn University's Environment Research Institute into developing the province for tourism included the villages of Bo Nok and Ban Krut as having tourism potential. However, Bo Nok was also the proposed site for the 734 megawatt power plant, and the 1,400 megawatt plant planned for Ban Krut. The tourism study warned heavy industry would spoil the peaceful atmosphere which attracted tourists. In 1991, a steel manufacturing plant was built in the province as the first part of a plan by the National Economic and Social Development Board to develop the area as a hub for heavy industry so that local potentiates and other members of Thailand's economic and political elite could make more money. These people need more power to build more automated factories, hence why the power plants were proposed in the first place. The proposed power plants incited fierce opposition from local villagers who want to protect the area for tourism, sustainable agriculture and fishery, their only livelihood. Owners of many of the new industrial facilities admitted that because there is more and more industrial automation, most of the local people would not benefit from industrialisation of the province because there was no need to hire much local labour. The source said Ban Krut was listed by the tourism authority as a prominent "passive destination" similar to the quiet beaches of Phangnga province and those found in national parks. "A passive destination has a peaceful surrounding and well-preserved nature which is a magnet for attracting peace-loving middle-class foreign tourists, particularly Europeans," the source said. "Local villagers could make money from such tourists as long as they can preserve the nature of the area." The Ban Krut local administration was to get 40 million baht in 2002 from the government's 58 billion baht economic stimulus package to develop tourism. According to the tourism authority, Wat Tang Sai at Ban Krut attracted both domestic and international tourists thanks to its location on a 180m cliff overlooking the beach. The temple is also famous for its architecture, designed by royal court architect M.R Mittraroon Kasemsri. A leading power plant opponent and Ban Krut Environment Club head, Jintana Kaewkhao, said Her Majesty the Queenin 2001 gave the wat [Buddhist temple in Thai] 15 million baht to finish its pagoda. Ms Jintana said the proposed power plant would damage the beautiful landscape which tourists were fond of. Academics urge government to scrap two projects In a move seen as moral support for villagers, some 500 academics and civic leaders signed a petition asking the government to scrap the Hin Krut and Bo Nok coal-fired power plants. The petition also asked the government to inspect contracts signed with the power plant developers by the Electricity Generating Authority of Thailand. "These signatures represent moral support for local villagers," said Somkiat Pongpaiboon, a lecturer at the Rajabhat Institute in Nakhon Ratchasima. "Without them, no one would have found out that the state struck deals with private investors without considering the public interest." In the wake of the corrupt dealings made by EGAT with the power producers, academics helding briefings at universities in four regions - Chulalongkorn University in Bangkok, Rajabhat Institute in Nakhon Ratchasima, Prince of Songkhla University in Songkhla and Chiang Mai University. The petition was initiated by Nithi Iewsriwongs, former professor at Chiang Mai University. Decision in two months, says Prime Minister The government would decide in two months whether to build the Hin Krut and Bo Nok coal-fired power plants, Prime Minister Thaksin Shinawatra said. Mr Thaksin said the government had inherited the problem, but would not shirk from a decision. "We will attach importance to the livelihood of local villagers. I heard new environmental protection technology is relatively safe but I have to see it for myself." Meanwhile, the House and Senate committees on energy decided to back the power plants. Senate energy committee head Kamnuan Mohprasit said Thailand could face an energy shortage in four or five years, given annual increases in consumption of 1,200 megawatts. "For the sake of national security, the committees have decided to support the projects. Nevertheless, the government will be obliged to look after community interests and contain any environmental and social impacts," said the senator. House energy committee chairman Suravit Khonsomboon said sulphur dioxide emissions could be kept to a "low and controllable" level and would not seriously pollute the area. The decision did not please the Senate committee on the environment, which wanted the plants built elsewhere. Meanwhile, the Students Federation of Thailand and 17 educational institutes said they wanted Mr Thaksin to give details of who would build the plants and for how much. Scrapping the projects would be in the public interest, they said. Decision by April 13 Thousands of protestors and supporters turned out to debate the plants with Thailand's Prime Minister. Songkran (Thailand's traditional New Year day) was set to be the deadline for the decision on the three controversial projects in the south:the Bor Nok and Ban Krut power plants, and the Thai-Malaysian gas pipeline, Prime Minister Thaksin Shinawatra said on January 25. "I will try to make decision as fast as possible but not later than Songkran [April 13]," he said after his visit to the sites of the two coal-fired power projects in Prachuap Khiri Khan province. The fate of each project would be considered separately. They would either be scrapped, postponed or given the go-ahead, Thaksin said. The prime minister said the principles he would use in making the decisions were: "The benefit of the country, especially economically, not destroying local ways of life and the environment. "Not 100 per cent will agree with my decisions but the majority will. And I expect conflicts between opponents and supporters will end," he said. The premier, Deputy Prime Minister Pitak Intrawityanunt and PM Office Minister Chaturon Chaisang arrived at Bor Nok beach in the morning at 8.30am on January 25 where 3,000 Bor Nok power plant opponents had gathered. The protestors voiced concerns over the corruption, non-transparent processes and an incomplete and unacceptable environmental impact assessment (EIA) report. They said the impact assessment, prepared by a Canadian engineering consulting firm based out of Vancouver, had been obviously written in order to ensure the project would go ahead and was politically siding with the developers. Several professors of environmental studies agreed and Prime Minister Thaksin suggested this might be true and would look into it. The protestors symbolically burnt a copy of the report with garlic and salt to demonstrate their strong opposition. "We have been opposing it [Bor Nok] for seven years. It's long enough for us to learn all about the project. No one can influence us. We just want the prime minister to listen and stop the project," leader Anan Phongphattanasakul said. A seafood lunch was served to Thaksin and his team at the beach, to show the importance of the fishing industry in the area. Later, about 2,000 Bor Nok supporters of the project, led by Prachak Sornchalerm, told the prime minister they believed the project would lead to further economic development. The first 154 million baht fund for village development had reached them even though construction had not begun "If the government considers coal power dirty, all coal plants in the country should be closed," Prachak said. The project's managing director, Sarath Rattanawadee, again insisted on 4 billion baht in government compensation if the project was scrapped, as it had been legally approved. In the afternoon, Thaksin's Ban Krut visit began with a meeting with power plant supporters at the project site about 2pm. Thaksin later met opponents who gave him reasons why the project should stop, including an incomplete EIA report preapred by the Canadian firm; a non-transparent process; illegal use of public land; the unacceptable environmental impact on fisheries; and pollution. "We did our best to tell him everything. If he still decides to continue with the project, we have a final plan for him," leader Somkit Sondhi said. PM Thaksin admitted to reporters the decision-making was like to unlock a timebomb but he would try to finish it within 45 days. A group of neutral and scientific experts might be used to finalise the decision and double check the environmental impact data of both groups, he said. He said he knew a Thai-speaking Canadian engineer working for a Richmond, Canada engineering firm who would be consulted to see if his firm could do an independent review of the environmental issues, the data collected and of the impact assessments. (1 US Dollar = 44.09000 Thai Baht)