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Chinese make move
MDX, Ratchaburi face threat in huge power schemes
The Nation (Thailand). November 21, 2007
http://nationmultimedia.com/2007/11/21/business/business_30056827.php
In china's quest for energy security, Chinese companies have
penetrated into the power-generating business in Burma and Laos, a
move which could threaten the presence of Thai companies operating in
the countries.
Agence France-Presse reported that the semi-official weekly Myanmar
Times said on Monday that a Chinese power company had joined the
Tasang Dam project in eastern Shan state on the Salween River, the
longest undammed river in Southeast Asia, taking up a 51-per-cent
stake.
Quoting a Burmese official, the paper said Thai company MDX's stake
was now reduced to 24 per cent, with the government holding 25 per
cent. MDX declined to confirm the report.
An MDX official also told the news agency that it was considering
reducing its stake in the controversial hydropower project, the
biggest in the military-run country.
"We are looking for a business partner to go ahead with the project,
and we are considering reducing our stake," the official said on
condition of anonymity.
MDX has invested about US$6 billion (Bt203 billion) in the Tasang Dam
project.
The Thai company has held an 85-per-cent stake in the project, with
the rest owned by Burma's military government, which is under global
pressure over its deadly repression of pro-democracy protests in
Rangoon in September.
Agence France-Presse also quoted state media as reporting in April
that the Tasang Dam's construction began in March. With a capacity of
7,110 megawatts, the project is scheduled for completion in 2022.
Thailand is expected to receive 85 per cent of the electricity from
the hydropower dam, with the rest going to Burma.
Three more dams on the Salween near the Thailand-Burma border are in
the pipeline, mostly backed by Chinese state-owned energy companies.
The US and Europe have imposed economic sanctions against the junta
due to its human rights abuses and the ongoing detention of democracy
leader and Nobel peace laureate Aung San Suu Kyi.
But energy-hungry neighbours like Thailand, China and India are keen
to exploit the country's abundant natural resources, including energy,
natural gas and timber, throwing an economic lifeline to the military
junta.
Meanwhile, in Laos, a Chinese company has also shown interest in
joining Ratchaburi Electricity Generating Holding, Banpu and the Lao
government in the $2.6-billion Hongsa Lignite power project.
Ratchaburi and Banpu Power will hold 40 per cent each in the project
while the Lao government will take up 20 per cent. Ratchaburi would
also invest in another joint venture with Banpu to develop a coal mine
in Laos, which would supply the power plant. The firm and Banpu would
each hold a 37.5-per-cent stake in the joint venture, while the Lao
government would hold the rest, the statement said.
In the case of investment from the Chinese company, Ratchaburi's stake
in the power plant and mining venture would be reduced to 30 per cent
and 28.125 per cent, respectively, Ratchaburi said in a statement.
Deputy managing director Thawat Vimolsarawong said recently that
equity participation from the Chinese company was a condition of the
Lao government. He had no knowledge of the name of the Chinese
investor.
The Hongsa plant is expected to begin selling power to the Electricity
Generating Authority of Thailand in March 2013. With a 40-per-cent
stake in the project, Ratchaburi's combined capacity would increase
from 661 megawatts to 5,160.
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