Power purchase agreement for Pak Beng dam signed: EGAT

The announcement at the hearing held in Chiang Rai province on Friday left the participants stunned as they did not realise that the agreement has already been signed while the parties concerned are still gauging public views over its go-ahead

The National Human Rights Commission on Friday invited the parties and state agencies concerned to share information in regard to the impacts of the dam, the third planned to be built on the Mekong River section in Laos, less than 100km away from the Thai-Lao border in Chian Rai’s Wiang Kaen district. 

According to Transborder News, which attended the meeting, the latest update about the dam was told by the Electricity Generating Authority of Thailand’s representative (EGAT) almost at the end of the day after the parties concerned had been discussing the impacts and mitigation measures and had not yet settled with solutions.

EGAT’s representative informed the meeting that the power purchase agreement for Pak Beng dam was signed on September 13, or only a week or so after the new government took office. The contract will last 29 years with the commencement set in 2033, or 10 years from now.

EGAT’s representative also insisted that the agreement has far advanced from the previous power purchase agreements of the other Mekong dams. It will be accompanied by mitigation measures for possible transboundary impacts and the dam developers must study them before going ahead with the construction plan. There will also be a reparation fund created to compensate for any loss due to the dam construction and operation, the representative from EGAT was reported as saying. At least 45 million baht will be set for the fund in the first year of the operation and this will increase over time, the representative pointed out. 

Another representative from the Energy Policy and Planning Office under the Energy Ministry said Thailand needs to purchase electricity from hydropower from its neighbours because it’s considered as “clean energy”. This will help Thailand to achieve its greenhouse gas emission reduction target, the representative from the EPPO said. 

Thailand and Laos, he added, have a sub-panel to help coordinate on the matter and an MOU to guide a scope of action taken by concerned parties. The MOU clearly states that Thai companies must co-develop the project, power purchase rates must be “reasonable”, and the project must come up with mitigation measures for possible impacts including transboundary ones, while responsibilities will be shouldered by the dam developers.

Pak Beng, the representative further pointed out, has already passed the prior consultation required by the Mekong River Commission. 

Pak Beng dam

The Pak Beng dam project is the first in the cascade of 11 hydropower projects on the lower section of the Mekong River, and the third proposed to the Mekong River Commission for the 6-month prior consultation process, after the Xayaburi and Don Sahong dams.

According to the project documents submitted to the MRC by Lao PDR in late 2016, the dam site is located in Pak Beng District, Oudomxai Province. It’s about 530 km downstream from the Jinghong Dam on the Upper Mekong River in China, 180 km from Chiang Saen District in Thailand (around 100 km from the Thai-Lao border in Wiang Kaen district), and 174 km upstream of Luang Prabang and 258 km from the Xayaburi dam. 

The project was first developed by Datang (Lao) Pak Beng Hydropower Co., Ltd. with an investment worth around US $2,372 million to build a 912-MW run-of-river dam with a total storage capacity of 559 million cubic metres at a normal water level of 340 metres. It is meant to supply up to 10% of the power produced by the project to Électricité du Laos (EDL), and the surplus power will be supplied to Thailand, according to the documents.

The project officially entered the prior consultation process in late December 2016, which was then completed in June 2017. Technical reviews among technical experts were held alongside national and regional consultations. The Water Resources Department, an organiser of the activities, was reported to hold four national meetings, but none were organised in Chiang Khong and Wiang Kaen districts, which are potentially affected by the dam the most. The fourth, which was held in Chiang Saen district, was merely a conclusion session of the first three consultations, according to the Supreme Administrative Court’s ruling document last year.

Hannarong Yaowalers, a president of the non-profit Thai Water Partnership promoting sustainable water management in the region, had told a meeting of local representatives in Wiang Kaen district late last year that his organisation had participated in a few consultations and technical review sessions and learned that the information regarding the dam project and its impacts especially the backwater effects was shortly briefed to the participants, and no responses were given to them when they raised concerns.

“No developer representatives were present at the meetings, so nobody there could give clear explanations to the participants,” said Mr. Hannarong.

The potential dam impacts at that time had been left unaddressed to the residents concerned before they realised that it progressed with the power purchase agreement endorsed in mid-last year.

“The problem is no information is available. Nobody tells us about the dam operations; to what extent it would restore the water and to what extent it would discharge it,” Kamnan Rewat Shinakhai of Tambon Muang Yai, who also attended the locals’ meeting had said, suggesting that the scope of its impacts were kept unknown as such. (Read: SPECIAL REPORT: Mekong residents and local agencies left in the dark about Pak Beng dam on the Lower Mekong)

At the meeting of the National Energy Policy Council chaired by former PM Gen Prayut Chan-o-cha on May 6 last year, it resolved to assign EGAT to proceed with a power purchase agreement with the developers of the project. It’s part of the package endorsement by the NEPC on three Mekong dams; Luang Prabang, Pak Lay, and Pak Beng. (Read: Power purchase deals endorsed for Luang Prabang and Pak Lay dams on the Mekong amid locals’ bids to seek “legal rights” for better protection of the river)

EGAT told one of the parliamentary committees requesting the explanations that it was at that time in negotiation with the developers to revise some conditions as recommended by the State of Council, and could not disclose the details of the agreement. It was not in a position to hold or suspend the proceedings of the deal either, EGAT had said.

According to the notes of the NEPC’s meeting as checked by Bangkok Tribune, the developer of the Pak Beng project is Pak Beng Power Co., Ltd. (PBPC). It’s a joint venture registered in Lao PDR, with China Datang Overseas Investment Co., Ltd. holding 51% of the shares, and a Thai company, Gulf Energy Development Public Company Limited holding 49% of the shares. The contract will last 29 years.

Pianporn Deetes, a regional campaign director for the US-based International Rivers, said the agreement signed recently has reflected a clear signal of ignorance against the public pleas for accountability and transparency of the project from the state agencies concerned and those in power. The fact is power reserve of the country is well beyond what is needed, and this, in turn, costs Thai people more than what is supposed to. 

“This dam is not needed for Thailand, whose prosperity is it subject to?,” Ms. Piangporn was quoted as saying by Transborder News.

Niwat Roykaew, Chairman of Rak Chiang Khong Conservation Group, has written a petition and submitted it to PM Srettha Thavisin and Energy Minister, asking them to review the decision on PPA signing and scrap it as this is deemed unfair to the local residents, who have been pursuing for the explanations but never recieved clear answers from the governments.

“We call on the new PM to review the decision and scrap the PPA (to purchase power from Pak Beng). The government should pay heed to people’s voices and respect their rights as they are the ones who live the closest to the dam and would be among the first groups of people who could be affected by it. 

“There are still unclear explanations about its transboundary impacts as much as mitigation measures whereas we need no more electricity in the system, under which all Thais are shouldering its excess reserve,” Mr. Niwat was quoted as saying by Transborder News.

As rechecked from EGAT’s Power Purchase Agreement Division by Bangkok Tribune, it’s confirmed that the power purchase agreement of the dam was signed on September 13 with the commencement date set on January 1, 2033.