Laos will ask Bangkok-based Ch. Karnchang Pcl to pay for a review of a $3.8 billion hydropower dam on the Mekong River after downstream countries called for a delay to further study environmental concerns.
The Thai-financed Xayaburi hydropower plant is the first of about 10 dams the government plans to build on the mainstream Mekong, which runs from China’s Tibetan plateau through Myanmar, Thailand, Laos, Cambodia and Vietnam. Ch. Karnchang’s shares fell 2.4 percent to 8.05 baht as of the lunch break, set for its lowest close since March 21.
“We are delaying the project but not permanently,” Daovong Phonekeo, deputy director general of Laos’s Department of Electricity, said by phone today from Vientiane, the capital. “We are just discussing the process and then requesting the developer to finance the additional review.”
Laos agreed on April 19 to delay the dam after Vietnam, Cambodia and Thailand said the project may disrupt fish catches and rice production downstream. The Mekong and its tributaries provide food, water and transportation to about 60 million people in those four countries.
Ch. Karnchang, Thailand’s third-biggest construction company by market value, owns a 57 percent stake in the 115 billion baht ($3.8 billion) project. The company hasn’t received a request from Laos to finance the review, Supamas Trivisvavet, an executive vice president, said by phone today.
“At this moment, we haven’t heard,” she said. “But I think it’s the Laos government acquiring the independent consultant to do the review.”
Giant Catfish
A technical review last month by the intergovernmental Mekong River Commission found that the dam may lead to the extinction of species like the Mekong giant catfish. “Gaps in knowledge” mean the full extent of the downstream impact on fisheries is hard to estimate, it said.
Laos wants its own study to verify the findings of the commission’s work, which served as the basis for riparian countries to object to the dam, Daovong said.
The cost of the review “depends on how many experts we have to hire,” he said. The timing should be “something like” six to 12 months, he said.
“It will not take 10 years,” Daovong said. Vietnam recommended last month that all planned hydropower projects on the Mekong be delayed for 10 years.
Thailand agreed in December to buy 95 percent of the electricity from the plant, which will have a capacity of 1,285 megawatts. PTT Pcl (PTT), Thailand’s biggest energy company, has a 25 percent stake in the project, while Bangkok-based Electricity Generating Pcl (EGCO) owns 12.5 percent, according to company filings.
Failure to build the dam may hinder the efforts of Southeast Asia’s smallest economy to use its resources to boost incomes for its 6 million citizens who comprise Asia’s youngest population. Hydropower and mining projects are set to underpin gross domestic product growth that may reach 7.7 percent this year, the Asian Development Bank said in an April 7 report.
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