Thailand's EGAT Wants China and Burma to Join in Huge Hydropower Project by Phairath Khampha 20 November 2002 The Electricity Generating Authority of Thailand (EGAT) decided it would invite the governments of China and Burma to jointly develop a multibillion-dollar hydroelectric scheme on the Salween River in Tak province. It also will invite Italian-Thai Development Plc. and international engineering consulting firms to submit expressions of interest for the big project. ITD would be invited because of its involvement in the Nam Theun 2 Hydropower Project in Laos. Higher profit margins from the low-cost electricity generated by the Salween scheme and extending the life of existing power stations would enable EGAT to save US$1.75 billion (Bt76 billion) over the following 15 years. It also means that the company would not have to build greenfield plants or buy electricity from private producers. EGAT governor Sitthiporn Ratanopas again raised the issue of the Salween project with high-ranking Burmese energy officials during his trip to Rangoon on November 20 and 21. While EGAT was 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 Salween project was discussed at the recent Asean Summit in Cambodia where energy ministers agreed the project would go ahead. The Burmese government encouraged ASEA members to develop basic infrastructure in Burma. Under the existing plan, the dam was due to start supplying electricity to Egat by 2013 but the board wanted an earlier delivery date, said Sitthiporn Rattanopas, Egat's governor. The dam would produce 5,000 megawatts of electricity, according to a study by Energy Power Development Corporation of Japan. "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 will pay for electricity from the Nam Thuen 2 project in Laos," he said. Although the dam would be located in Burma, the generating units would be installed in Thailand, making it easier for Egat to secure low-interest loans to fund the project. EGAT would 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 would 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 was considering a public issue of five-year debentures in two tranches to finance the project in addition to the 20 billion baht (US$1 = 42.3 baht) in cash it currently holds. The board on November 15 agreed in principle to the proposal, and it would 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 was expected to save EGAT at least $203 million over the following 15 years. Through renovating and reconditioning existing power plants, EGAT would 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 would not need to expand its production capacity again until 2009. The assumption was based on existing power development analysis that forecast Thailand's electricity demand would grow 6.3 per cent over the following 10 years to a maximum 16,661MWs.