Thailand's Egat trims capital spending plans


By an OGJ Online Correspondent

BANGKOK, May 8 -- The Electricity Generating Authority of Thailand (Egat) will cut capital outlays almost 15% between 2003-2006 under revisions to its long-term investment plan.

Capital spending in the period would be trimmed to 144 billion baht ($3.18 billion US) from 170 billion baht, said senior officials of the Thai state power utility which controls 75% of the country's combined installed capacity.

The 14.79% reduction is largely in line with Egat's new directive to narrow the kingdom's total generating reserves to no less than 15% above domestic demand. The reserve margin had been set at 25%.

The new policy is also meant to support the Thaksin Shinawatra Administration's goal of reducing costly imports of capital goods. State enterprises, including Egat, are among the largest foreign exchange losers.

Egat officials pointed out that the amount of procurement of import content in the 2003-2006 could be cut by 3.5 billion baht, representing 4.99% of total capital outlay planned in the period.

For 2003, the proposed reduction is 1.6 billion baht; 3.9 billion baht for 2004; 7 billion baht for 2005; and 12.5 billion baht for 2006.

Egat said it will immediately curtail capital outlays for 2001 and 2002 by 1.7 billion baht. As a result, its investment for 2001 drops by 1.2 billion baht to 28 billion baht, or a 4.11% cut. The projects that will be most immediately affected in 2001 are construction of the Surat Thani power plant and installation of flue gas desulfurization equipment at Units 4-7 of the lignite-fired Mae Moh power complex. Payment will be postponed to 2002.

For 2002, Egat sources said cuts will be in the magnitude of 478 million baht, reducing the investment for the year to 20.8 billion baht. The cutback , aimed at import content, will have the most bearing on the Surat Thani power plant project and the ninth phase transmission line expansion scheme.

The Petroleum Authority of Thailand already said the reduction policy may force a delay in a 3 billion baht gas pipeline project to serve the Surat Thani power project. The 20-in., 80-km transmission line was originally set to come onstream in 2003 with a gas throughput capacity of 150 MMcfd.

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