Hongsa Lignite power project proceeds in Laos as planned

Construction News Laos

Hongsa Lignite power project in Laos is proceeding as planned despite the court case against its major shareholder, with commercial operation scheduled to start in 2015.

Banpu Plc, one of Asean’s leading coal companies, was ordered by Thailand’s Civil Court last month to pay 33 billion baht to Siva Nganthavee for the latter’s opportunity loss over the 1,878-megawatt power plant in Laos.

Banpu holds 40% of Hongsa power plant with equal shares belonging to Ratchaburi Electricity Generation Holding Plc, Thailand’s largest independent power producer (IPP), and the rest owned by Lao Holding State Enterprise.

Voravudhi Linananda, managing director of Hongsa Power Co, said yesterday that the court ruling involved only one of the project’s shareholders and has had no direct impact on the company.

Hongsa Power is registered in Laos and is beyond the jurisdiction of Thai courts, said Mr Voravudhi.

“The Laotian government is not worried about the case,” he said.

Mr Siva and his group filed a case against Banpu in 2007 and alleged the latter misled them into entering a joint agreement to secure information about the group’s coal mine contract and a feasibility study for the Hongsa project.

Banpu has denied the allegations and vowed to appeal against the verdict.

Construction of the US$3.71-billion coal-fired power plant in Hongsa district, Xayaburi province, has progressed by 20%.

The company expects a commercial operation date (COD) in early 2015 for the first two power generators and another generator in 2016.

The power plant is set to supply 1,400 megawatts (MW) of electricity to Thailand, 100 MW to Laos with the remaining 378 MW for internal use.

Mr Voravudhi said that the Lao government has promoted Hongsa Lignite as a project that takes good care of local communities and the environment with positive recognition from neighbouring countries.

Around 14.3 million tonnes of lignite will be used each year to produce electricity under the 25-year concession.

Source: http://www.bangkokpost.com/business/economics/316095/hongsa-proceeds-as-planned

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