Laos optimistic on Xayaburi despite stumbling blocks

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The Lao government remains optimistic the construction of the Xayaburi hydroelectric dam on the Mekong River can begin at the end of this year’s rainy season and be completed by 2020.

Xaypaseuth Phomsoupha, the director-general of Laos’s Energy and Mines Ministry, said two separate reports from independent consultants found the US$3.8-billion project will cause negligible environmental damage and limited social disruption.

“As such, we do believe Vietnam, Thailand and Cambodia have no reason to block the construction of the project,” Mr Phomsoupha said yesterday.

He made the comments at Euromoney’s Greater Mekong Investment Forum.

He pointed out that Laos will not proceed with the project without agreement from neighbouring countries.

So far, information regarding the dam has been exchanged between members of Mekong River Commission (MRC), an intergovernmental group that focuses on the management and sustainable development of the river.

“No written agreement is required for the project to go ahead, but we cannot do that without addressing the concerns of the neighbouring countries,” he said.

Ch. Karnchang Plc (CK), one of Thailand’s largest contractors, has been granted a concession to develop the 1,280-megawatt project, one of 11 planned dams on the Mekong River.

The construction of Xayaburi was halted due to strong opposition from environmentalists and some members of the MRC.

Mr Phomsoupha said construction has not yet started. Only an access road for transporting major equipment has been built to date.

“If the construction starts at the end of this rainy season, it will take 81/2 years to complete,” he said.

Xayaburi Power, 30% owned by CK, Thailand’s third-largest construction company by market capitalisation, has signed an 85-billion-baht loan agreement with six banks and also a 29-year power purchase agreement with the Electricity Generating Authority of Thailand.

CK executives earlier expressed optimism that the Xayaburi project can be completed as planned by 2020.

Laos hopes to supply a total of 7,000 MW of hydroelectric power to Thailand by 2020.

About the author

Writer: Nareerat Wiriyapong
Position: Business Reporter

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