Despite the completion of the construction of Yadana pipeline to bring natural gas from Burma to a Thai power plant at Ratchaburi, the delivery of the gas has again been rescheduled. The pipeline has been built amidst strong outcry from human rights activists and environmentalists.

The main reason for the rescheduling has been delays in the installation of the combined-cycle units at the Ratchaburi power plant of the financially-strapped EGAT (Electricity Generating Authority of Thailand). Mitsui and General Electric, the two contractors of this mammoth 5,000 megawatts power plant, have failed to deliver the main parts of the combined-cycle units. The first unit was supposed to be completed in July 1998.

Fierce protests against the privatization of the plant have come from EGAT’s union, which accused the government of selling national assets in order to pay its huge debts. These debts, coupled with the gloomy financial status of EGAT, have reportedly prompted the two contractors to delay installing gas turbines for the Ratchaburi plant. Since the financial crash took place two years ago, EGAT’s debt servicing has been much hindered. It causes concerns over debt defaults among EGAT’s construction contractors.

According to Thai Post, EGAT announced on 16 July 1999 that the delivery of the Yadana gas should take place in early 2000 despite the fact that the first combined-cycle unit is now 80% completed. Reuters had earlier this month quoted the general director of natural gas section of PTT (Petroleum Authority of Thailand), owner of the controversial Yadana project as confirming that the first unit of the Ratchaburi plant would be ready to consume gas by August 1999.

EGAT cited the expensive price of the Burmese gas as the main hindrance to the commencement of the delivery. Since last year, EGAT has been subjected to strong criticisms from the local media and the public in general for its chronic increases of the price of electricity. These price hikes have occurred even though EGAT’s exchange losses have significantly decreased, as the Baht has become somewhat stronger, and there has been a slight recovery in power consumption in 1998 and 1999 as compared to 1997, when the economic slump began. To begin receiving the gas from Burma now means an inevitable increase in the price of electricity.

EGAT has complained several times that the Yadana gas costs substantially more than the price of gas purchased from other local sources, and also that the gas is of lesser quality than what was initially claimed.

PTT (Petroleum Authority of Thailand), during the peak of the protest against its Yadana project, had always asserted that the gas from Burma was cheaper and of higher quality. The Yadana gas reportedly costs 3 USD per one million BTU at the point of delivery at the Thai-Burmese border, with the price rising to 3.48 USD at Ratchaburi plant in Thailand. According to EGAT, natural gas from local sources causes around 2 USD per one million BTU at the site of power plant.

To avoid public outrage and political repercussions, EGAT decided to start receiving the gas in early 2000, when the first 700 megawatt-thermal-unit is completed. Because the first thermal unit consumes cheaper bunker oil is completed, EGAT can share the costs of oil and gas, and avoid having to increase the price of electricity at the moment.

PTT has been desperate to see the Ratchaburi plant receive the gas. According to the take-or-pay purchase contract signed with the Yadana consortium, PTT has to pay money in advance based on the agreed gas delivery schedule regardless of whether or not it actually takes the gas.

The first delivery should have taken place by the 1st of August 1998. Up to this August, PTT was supposed to pay about 8,000 million Baht (app. 200 millions USD) to the consortium without receiving any gas, though so far it has still withheld the payment. PTT cited the delay of the completion of the power plant as a force majeure (or circumstance beyond its control) upon which it can withhold payment, though this argument was rejected by the Yadana consortium.

In the meantime, the ongoing trials of Sulak Sivaraksa, a human rights campaigner who joined the sit-in protest in the forest to block the gas pipeline’s construction , and was arrested in March 1998, have exposed more lies by PTT. Sulak's charge was based on the Petroleum Act, which was promulgated by a dictatorial regime over 20 years ago. The Act authorizes PTT to sue anyone who obstructs its exploration and production efforts. Sulak’s opposition stemmed from his concern over the terrible human rights and environmental impacts associated with the pipeline’s construction.

A great variety of plants and wildlife, including wild elephants and the hog-nosed bats, have been found to inhibit the pristine forests of Burma and Thailand along the pipeline route. A field survey last March by the Kanchanaburi Conservation Club, a local environmental group, revealed severe environmental destruction caused by the pipeline’s construction including deforestation, soil erosion, and impacts of the living patterns of wild life.

With respect to human right abuses, the Yadana project has involved the widespread use of forced labor of ethnic minorities who live along the 60 kilometer-route in Burma. These ethnic peoples have also suffered extrajudicial killing at the hand of the Burmese army.

These abuses have been investigated and publicized by many groups including the ILO (International Labor Organization) and Earth Rights International, a non-governmental organization. The ILO recently issued a resolution barring Burma from attending ILO forums, and condemning Burmese labor practices.

In front of the judge, Mr. Sompong Tantisuwanichkul, the chief engineer of PTT for the Yadana project, denied charges that PTT had often violated the mitigation requirements of the Environmental Impact Assessment (EIA) in order to speed up construction and cut costs. The chief engineer also denied the charge that PTT had extensively used explosive materials to entrench the ground, and that PTT worked at night, though a great deal of evidence has been induced to the contrary. It was stipulated in the EIA that no work was allowed at night because it would disturb wildlife. The EIA also said that explosive materials were not to be used or could be used when it is most necessary.

To provide stronger evidence of environmental damage associated with the pipeline construction, the judge has allowed video presentation to be made in the next hearing.

Report by Pipob Udomittipong

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