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Edison Thai affiliate sets up compensation fund

Gulf Power Generation (GPG), 40% owned by Edison Mission, a unit of US-based Edison International, is establishing a $3.3 million (150 million baht) fund to compensate villagers for any impact of a controversial coal-fired power scheme in southern Thailand.

Creation of the so-called contingency and emergency fund forms part of the Thai-US joint venture’s attempt to get the $700 million project in Prachuab Khiri Khan off the ground. The fund is intended primarily to reduce long-standing opposition from residents.

GPG managing director Sarath Ratanawadi described the fund as the first of its sort ever established by a company in Thailand. The fund underscores the firm’s conviction that its proposed Bor Nok power plant is safe and environmentally friendly and not the hazardous and polluting facility some opponents have portrayed.

“The creation of the fund reflects our sincerity and commitment,” he said.

Though Sarath noted many villagers are pleased with the presence of the fund, the Southeast Asia office of the environmental group Greenpeace recently asked the Thai government to abandon plans to build coal-fired power stations and switch to clean energy sources.

The fund will be managed by a tripartite committee, consisting of two members each from state agencies, villagers, and the company. The tripartite will assess any compensation claims against the plant and order corrective action.

Meanwhile, GPG insiders said the company has quietly taken steps to move forward with the project after the Thai cabinet removed a major hindrance. Furthermore, GPG won a reprieve from the Electricity Generating Authority of Thailand (EGAT) to defer startup of contractual power sales from the project to October 2004 for the first phase and April 2005 for the second stage.

Sources said GPG has clinched initial contracts, including the main turnkey lump sum deal with contractors. No details were provided.

“All the action is being geared towards laying the foundation stone of Bor Nok towards the end of this year,” the source said.

Some have suggested moving the site of the plant away from the Prachuab Khiri Khan coastline and switching from coal to natural gas. But Sarath said the company could only do so if the government compensated it for the 2-3 billion baht which GPG has put into the project so far.

Thailand’s Gulf Power Generation (GPG), 40% owned by a unit of US-based Edison International, is establishing a fund to offset any potential problems from a proposed coal-fired power plant.