Sunday, August 10, 2008

RATCH may delay overseas ventures


Ratchaburi Electricity Generating Holding Plc (RATCH), the country's largest private power producer, may delay the operations of four joint-venture electricity projects outside Thailand by at least one year due to skyrocketing construction cost.

Managing director Narong Sitasuwan said construction costs had risen by 25-30% because of shortages of materials for its projects in Laos and Cambodia since early this year, which would trim its return on investment and project finance.

The plants include the 440-megawatt Nam Ngum 3, in which Ratchaburi and Marubeni of Japan each hold 25%, the Thai contractor MDX 27% and the Laotian government 23%. Also affected is the 140-MW Nam Bak hydropower plant in which RATCH holds 25%, the Thai construction company Ch. Karnchang (CK) 50% and the Laotian government 25%. Both plants are scheduled to come online in 2014.

Also delayed could be the 1,653-MW Hongsa Lignite coal-fired plant in Laos, scheduled for a 2013 startup. RATCH and the SET-listed miner Banpu Plc each hold 40% and the Laotian government 20%.

In Cambodia, the company and Egco Plc each hold 35% in the 3,660-MW Koh Kong coal-fired plant, and Italian-Thai Development Plc 30%. It is scheduled to begin producing electricity in 2016.

The Cambodian venture could be further complicated by the current standoff between Cambodia and Thailand over disputed land near the Preah Vihear temple.

Mr Narong said that two other hydropower plants in Laos were still on schedule, including the 615-MW Nam Ngum 2, in which RATCH and CK each hold 25% and the Laotian government 50%, It is scheduled to open in 2013.

''Fortunately, the construction of these two projects was already 60% completed before electrical steel prices jumped due to a supply shortage,'' he said.

At a meeting of Asean and East Asian energy ministers in Bangkok this week, Laos proposed a 16.6% increase in the costs of power sales to the Electricity Generating Authority of Thailand (Egat) to cover higher construction costs of its hydropower plants.

Ratchaburi is also in pre-construction preparation for the 390-MW Xe Pien Xe Nam Noi hydropower plant, due to open in 2016. The power purchasing contract has not yet been negotiated.

Mr Narong said said revenue for all of 2008 should exceed the 46 billion baht reported in 2007, as there were no more maintenance shutdowns planned this year.

RATCH reported a first-half consolidated net profit of 2.97 billion baht, down from 4.19 billion a year earlier, due mainly to maintenance shutdowns.

RATCH shares closed yesterday on the Stock Exchange of Thailand at 39 baht, unchanged, in trading turnover worth 43.97 million baht.

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