Thai Utility Commits to Purchase Power from Xayaburi Dam

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Bangkok, Thailand – Thai Senators are investigating whether the Electricity Generating Authority of Thailand (EGAT) violated the Thai government’s instructions by signing an agreement to purchase power from the controversial Xayaburi Dam before it is approved by the Mekong River Commission’s member governments. Members of the Thai Senate Subcommittee on Good Governance on Natural Resources and the Environment agreed yesterday to send a letter to EGAT demanding a copy of the power purchase agreement (PPA).

“A high-ranking official from the Ministry of Energy said in a Senate hearing that the PPA for Xayaburi Dam was signed on October 19,” said Thai Senator Surajit Chiravet, member of the Senate Committee on Corruption Investigation and Good Governance Protection. “The project is now included in Thailand’s Power Development Plan.”

Thailand’s National Energy Policy Council (NEPC), which is chaired by the Prime Minister and relevant Ministers, has the authority to select and approve all power import projects.  In a meeting on 30 December 2010, the NEPC instructed EGAT that before it could commit to purchasing electricity from the Xayaburi Dam, the project had to be decided and approved in compliance with the 1995 Mekong Agreement.  Under the Agreement, mainstream dams can only proceed once member countries reach consensus through its “prior consultation” process.

At last week’s MRC Council Meeting, the Ministers of Cambodia, Laos, Thailand, and Vietnam announced plans to conduct a joint study on the impacts of the proposed Mekong Mainstream Dams through the MRC framework.  The Ministers did not announce a decision on whether the Xayaburi Dam can proceed, nor did they announce a formal close to the “prior consultation” process between the governments, which is a prerequisite to the project moving forward. There are broad expectations among the public, governments, and MRC Development Partners that construction on the Xayaburi Dam will be delayed pending completion of the study.

“The major concern with the signing of the PPA for the Xayaburi Dam is that it likely violates the resolution of the NEPC, which requires the project to comply with the 1995 Mekong Agreement.  It is obvious that the four member governments have not reached a consensus on the dam.  While there is no regional mechanism to ensure compliance with the Mekong Agreement, Thai authorities need to comply with Thai laws, even though the project is located outside of Thailand,” said Senator Surajit. “The impacts of the Xayaburi Dam will be devastating regionally, particularly on fisheries and agriculture for all riparian countries.”

“By moving under the radar of the Mekong River Commission, Thailand and Laos have threatened the spirit of regional cooperation and the integrity of the 1995 Mekong Agreement.   While it’s no surprise that the dam builder Ch. Karnchang has lobbied extensively for the dam to proceed, it’s completely unacceptable that the Thai government would bow down to the project developer over the interests of its own people,” said Ms. Piapoorn Deetes, Thailand Campaign Coordinator for International Rivers.

“The Thai people are strongly opposed to this dam and have yet to be adequately consulted.  Before fueling any further backlash from the public and neighboring countries, Thailand should cancel its plans to purchase electricity from this dam.  Furthermore, an investigation should be ordered into how the agreement was able to proceed without adherence to the criteria set by the NEPC,” continued Ms. Deetes.

A study released last week demonstrated that power from Xayaburi and other mainstream dams was not needed to meet Thailand’s energy needs, and that cheaper and cleaner options exist that would lower electricity bills and reduce greenhouse gas emissions.  Laos has yet to announce whether they will commit to stopping construction on the Xayaburi Dam while additional study is carried out by the four member countries.

Read the National Energy Policy Council’s December 30th, 2010 Resolution on the Xayaburi Dam’s PPA in Thai language