Cambodia-Thai Hydro Deal Signing Faces Delay

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A $100 million electricity and fresh water deal for a joint-venture between Cambodia’s LYP Group and the Electricity Generating Authority of Thailand (Egat) will not be signed as expected when Prime Minister Hun Sen meets his Thai counterpart General Prayut Chan-o-cha today for bilateral talks, the Bangkok Post reported yesterday.

cambodia thailand hydro project deal signing delay
Prime Minister Hun Sen will meet Thailand’s Prime Minister Gen Prayut Chan-o-cha today at the Cambodia-Thailand Joint Cabinet Retreat in Phnom Penh. KHMER TIMES / REUTERS

The newspaper said Gen Prayut had been due to witness the joint investment contract signing ceremony to invest in the Stung Nam hydro project and to buy power from Cambodia. The delay also comes amid mounting criticism over unusually high prices in the proposed contract.

The order to delay the purchase came after the Thai Royal Irrigation Department said it can supply sufficient raw water to the country’s Eastern Economic Corridor without water from the Cambodian hydropower project, according to the Bangkok Post.

The Third Cambodia-Thailand Joint Cabinet Retreat is scheduled to be held at the Peace Palace in Phnom Penh today and tomorrow and will discuss bilateral issues ranging from development cooperation to border development, and trade and investment.

LYP chief Ly Yong Phat told Khmer Times that the delay in signing the deal was due to the time constraints by both sides which could not process the documents on time. “We got around 20 days for preparation of some relevant documents to submit to many concerned ministries of both countries,” he said.

“We really wanted all documents to be ready for signing and witnessed by both prime ministers but the time was too short for the preparations. We need to deal with many other relevant ministries and our partners also have to do the same.”

The Stung Nam project is a small power project with a capacity of 24 megawatts and Thailand’s main interest is not in power supply but water. The dams can supply as much as 300 million cubic metres of water per year, the Bangkok Post said. Under the plan, Egat International, a subsidiary of Egat, will hold a 50 per cent stake in the project.

In 2015, Thailand made plans to invest in the project with Cambodia to obtain power and water to feed the ambitious EEC project, covering the eastern provinces of Chon Buri, Rayong and Chachoengsao. Under the initial purchase plan, Egat will buy electricity from the Stung Nam project at a cost of 10.75 baht ($0.32) per kilowatt hour.

Prasert Sinsukprasert, deputy director-general of the Energy Policy and Planning Office under the Thai Energy Ministry, was quoted by saying that Prayut had ordered agencies concerned to delay the purchase contract until the Agriculture and Cooperatives Ministry  studied whether the water supply to feed the EEC zone is sufficient over the long term. He said the Agriculture Ministry could come up with a Plan B to develop a large reservoir in the eastern part of Thailand that could provide raw water to the EEC area.

Somkiat Prajamwong, deputy director-general of the Royal Irrigation Department, was quoted that Thailand’s EEC zone would not need water from the Stung Nam project for the next 10 years. The department has a 10-year water management plan for the EEC area, which includes increasing the capacity for water storage by at least 500 million cubic metres.

Prasert expected it would take some time for a decision to be made on the project since the government would have to wait for a clear answer from the Royal Thai Irrigation Department on whether Thailand needs raw water from Cambodia.

Yong Phat said that although both sides had not reached an agreement for the meeting between both prime ministers tomorrow, both companies were still working on the project. “We are not ready to sign on the memorandum of understanding  during the meeting between our prime ministers but our project is still going on as we keep working with our partners,” he said.

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