Hydroelectric Dam at Koh Kong
Today I am so glad to be here with all of our people to celebrate the groundbreaking ceremony to seal the dam to build the hydroelectric power station at Russeik Jrum Kraom to be built by a Chinese company. I am so glad that this project finally gets started in late 2010 or to be exact it is an achievement to greet New Year 2011.
Our people may have noticed that I have made numerous trips to (the People’s Republic of) China and a number of visits conducted by the Chinese leaders to the Kingdom of Cambodia. Thanks to cooperation in political and various other fields, with the supports of the two Governments, today we all are witnessing this huge hydroelectric power generation project.
While I was in Beijing, the Financial Times ran an editorial ‘Cassava Diplomacy,’ very impressing title. Readers could have thought that the editorial is an insult vis a vis Hun Sen’s visit to the People’s Republic of China. In fact, the editorial, in its depth, has claimed that the cassava diplomacy would in fact bring about progress for thousands (Cambodian) families who grow cassava. The visit is in fact designed for Cambodia to export cassava to China and as this has been the case, we are now working to get other crops on the way too, like corn, for example. The Chinese market of 1.3 billion people is the world biggest. They could be profitable for Cambodia in general, but particularly for Cambodian farmers.
The Right Man for the Job
HE Say Phuthong, the elderly member of the Cambodian People’s Party and who is also here present today, has been the one to offer me support. In his position then as the Head of the Organizing Committee of the Central Committee (of the Cambodian People’s Party) and one of the most influential members in those days, he has told everyone around him that he has been so proud that he has chosen the right man (Hun Sen) for the job.
When I became Prime Minister, I was only 32 years old, whereas other leaders were in their 40s and 50s. His support has been going on for 26 years today since when I was Minister for Foreign Affairs at the age of 27 years old, and Deputy Prime Minister and Minister for Foreign Affairs at the age of 29 years old. Whether one’s action is being addressed as cassava diplomacy or anything else, as long as the result responds to people’s aspiration and need for capital and technology for national development, after a protracted war, that action will do.
(Chinese) Nonstop Investments, Three Types of Capitals
As the world is experiencing large scale financial crisis and economic downturn, it should be noticed that (the People’s Republic of) China has continued to make nonstop investment in Cambodia. As we all know now there are in all five hydroelectric power stations under construction – Komjai, Kirirom III, Stoeung A Tai, Stoeung Ta Tai and the Russei Jum Kraom that we are here to celebrate the sealing of the dam today.
To be frank with you all, as the said crisis arise, I am so concerned many of our projects could be experiencing financial shortfall because (countries or companies who engage in the projects could have had a problem of) financial deficit. It is a good thing for Cambodia that the People’s Republic of China does not suspend any projects in Cambodia at all – whether in grant, low interest loans or private investments. This has indeed enabled Cambodia to go on with its planned development.
There have been three types of capital inflow from China to Cambodia: a) grant, b) no-interest or low interest and buyer’s loan/credit, and c) capital provided by the Chinese Government to reinvest in Cambodia.
Chinese Assistances To Date
During the visit to Cambodia in December 2009, HE Xia Jin Ping, Vice President of the PRC, declared providing Cambodia with 1,200 million USD credit. The Royal Government of Cambodia got 400 million USD for the construction of new infrastructure, especially roads, irrigation system, and electric transmission lines. The Chinese Government has offered the remaining 800 million USD as capital for Chinese companies to invest in Cambodia. As I said (they have been invested in) five hydrop0wer electric plants so far.
Through the visit to Cambodia in November 2010 of HE Wu Bangguo, Chairman of the Standing Committee of the National People’s Congress of China, and my visit in December the same year to the PRC, the two countries have come to signing some 30 contracts, frankly, that will be helping Cambodian in its effort to take off.
As we are in the stage of spending the 400 million USD, the Chinese Government, in the course of my voisit, has offered another loan of 300 million USD, which I think will be used for building 1) a road between Koh Nhek of Mondulkiri through to Ratanakiri, 2) a road between Preah Vihear and Stoeung Treng, together with another bridge across the Mekong River, and 3) the Phase-I Vaiko River Irrigation system in Svay Rieng province, which would require further discussion.
Russei Jum Kraom – The Biggest Electric Power So Far
Take for instance, as is reported by the company and HE Suy Sem, Minister of Industry, Energy and Mines, the Russei Jum Kraom hydroelectric power station to be will produce some 338 MW of electricity, which is so far the biggest electric station among hydropower electric stations under construction in Cambodia. The cost of building this electric dam is about 495 million USD. If it were not for the support of the Government of the People’s Republic of China, I am sure the capital would not have some this fast.
There have been some remarks by so and so as far as this project is concerned. Let me clarify this. As far as the electric power project of Russei Jurm Kraom, for example, is concerned, it is being built in a 35 year BOT (Build-Operate-Transfer) form of investment. The state (of Cambodia) would guarantee only on purchase of electricity and other risk involved but not business corporation. In fact there was a company from a different country that came and asked for the Cambodian state to provide all sort of guarantees in exchange for investment. I told them we would only do it otherwise.
Food and Financial Contribution for WFP to Continue
If the company requires the state to provide such guarantees so that the company could go borrow money for the construction, why else the state could not do itself. You may go back and look at records of the negotiation. Take for instance, the other day, the (WFP) has written a letter to seek for an apology about a remark it has made (about Cambodia’s food security status). When Cambodia is having rice surplus they have said that Cambodian is in hunger. However, because they have sent in an apology letter, I have permitted concerned Cambodian institutions to continue to provide (WFP) our contribution of close to two thousand tons of rice and almost half a million USD.
Power for Phnom Penh and Battambang, Demand always Ahead
The power to be generated from this plant would be transmitted across the province of Pursath, a part of it of course would be given to Koh Kong province, to O Saom, Stoeng Atai, Pursath I and Pursat II before it will go on one line to Battambang and on another line to Phnom Penh. Some may ask why we are producing so much power. I may as well respond that there will not be enough as far as electric power is concerned. In 1995, during my visit to the C4 Electricity in Phnom Penh, I told then Minister of Industry, Energy and Mines HE Pu Sothirak that demand for electricity will always be ahead.
Facing increasing demand for electricity and high price of fuel to generate electricity, we should be looking for alternative sources of energy generation. In 2008-2009, we suffered a big blow for the price of fuel in the world went up to a level that was so hard to mitigate. There was then a consideration by the Ministry of Economy and Finance, in light of high fuel price, to propose consumer price of electricity. I stopped the move and the state continued with subsidy so as to prevent sure-to-be falling through for consumers of all types.
Any price increase (for electric consumption) would lead to instability and unfavorable impact on the people’s livelihood, but also production lines that were in a stage of difficult competition already. In 2008, the State has subsidized some 22 million USD on electric power supply.
We need to be less dependent on fuel so that we could guarantee our energy security from volatile fuel price. It is true that coal is cheap at the moment but we have to be cautious of instable price of coal in the future. The only viable source of energy left in this situation is hydropower plant. It is indeed important to preserve our forest because in absence of forest we also do not have water for both water to run the turbine and irrigation system, but also for benefit from forest carbon purchase.
300 MW for Phnom Penh, 10,000 MW Hydroelectric Possible
This has brought us to a conclusion that we could not go on with diesel power generation anymore. Fund seeking for electric production has commenced and there have been studies that about 10,000 MW of electricity could be generated.
As of now we have six project undergoing and according to the report of HE Suy Sem, some 17 projects have been allowed for feasibility studies. We also have project to study about power generation run by coal in the province of Preah Sihanouk too. As far as Phnom Penh electric consumption is concerned, some 120 MW has been lined from Vietnam to address its daily demand for 300 MW. Vietnam has yet to provide some 50 MW more, making it 170 MW out of the 200 MW contract, according to our contract, but it has been difficult because Vietnam is experiencing lack of water to run the turbines.
If Cambodia produces the amount of electricity as has been studied, 10,000 MW, how does Cambodia plan to make use of it? Let me put this way if we make use only 5,000 MW, we may have extra 5,000 MW for commercial purpose to neighboring countries. As of the moment of speaking we are purchasing electricity from Laos, from Vietnam and from Thailand. With extra power and because geographical conditions of our neighboring countries, we may be able to provide them with our power in the form of two-way trade. For instance, if we could produce electricity from the Stoeung Me Toek, we do not need to line it in for internal supply but sell it to Thailand.
We are also planning to have electric power from the Kirirom II hydropower plant in 2012, from Ta Tai in 2015, from Atai in 2013, and from this Russei Jrum Kraom in 2015.
The Komjai Hydroelectric Plant – Ready by August 2011
According to the Chinese ambassador, HE Pan Guang Xue, the 193 MW Komjai hydroelectric plant will be ready to provide power five months before schedule or around August 2011. I have asked the Minister of Industry, Energy and Mines, HE Suy Sem to give me a report of his organization and management of immediate setup of 70 km long transmission lines from Kompot province to Takeo province with the credit fund from Germany. I have instructed the Ministry to work with the private company that is winning bid of the German loan to work out a speedy construction plan, and in case of necessity, the Electricite du Cambodge (EC) could also mitigate.
For instance the construction plan has been designed for two work groups, but we may work out with them to increase to four or five different groups, with additional cost covered of course. Though it has been contracted that the Konjai hydroelectric dam in Kompot province will provide electricity in late 2011, but if we have a chance of getting it before the stated timeframe, and we do not benefit from it because we do not have the transmission line ready for it to be wired to Takeo, it would be a big loss not only money but also protraction of lack of electricity in Phnom Penh.
It is this thought that I would order for concerned authorities and related provinces and cities of Kompot, Takeo and Kep to make active participation in the construction of the electric transmission lines. I have said in the last Cabinet meeting, in which I decided to give permission for coal-powered electric plant, that where there is car there must be road to drive it in, where there is road there must be care to drive. I mean if we produce electricity, we must have transmission line. If we do not purchase the electricity, we will have to pay for their power. Here we are talking about 338 MW of electric power.
Blueprint of Transmission Lines, Alternative Safety
We are in the process of setting up transmission lines from Russei Jrum Kraom of Koh Kong province to O Saom, and then to Purath province. From there, one line will run through to Battambang province, to the border with Thailand, and then to the province of Siemreap. Another line will run from Pursath in opposite direction to Phnom Penh, and from this line, the power could also be transmitted to Preah Sihanouk province. We have already adopted a plan to run electric line to Kompong Cham province from Phnom Penh. We are seeking fund to set up power line between Kompong Cham and Kratie province. Between Kratie and Stoeng Treng, we have secured loans from India for the construction already.
We also have this segment between Siemreap province and Skun of Kompong Cham province that needs to have power line in order to effectively power the areas around Tonle Sap Lake.
However, we should anticipate cases of interruption of power supply due to force majeure where we need to have an alternate power line, which I listened to the report by HE Suy Sem yesterday already. The alternate power line will seek to run power which is now through O Saom/Pursath alone to run through to Kompong Speu and on to Phnom Penh. This would give us an alternate supply line in case of power outing in one due to all sorts of reason.
Development versus Environmental Impacts
We have reasoned that there is no development that is not having impact on environment and I would suggest any right-mind environmentalists to give us the most appropriate answer. Are there or are their not impacts on environment from drilling for oil under the sea bed, quarrying stone for cement making, mining ground for steel, and building electric dam? Let’s take making tree-sap torch for instance, in order to make a torch they have to cut open a tree to get its sap, would this not be a harmful action on tree?
It is ridiculous that when we are trying to develop our way of life, some people came out and said that we cause environmental problem. When we leave our way of life untouched, they came out and said we do not improve people’s living condition. There has to be a cost for everything. In order to get 338 MW of electric power, we need to seal the dam at Russei Jrum Kraom, whereby a part of forest will be inundated. That is the cost we pay to get 338 MW power.
As far as the Mekong River is concerned, there has been conflicting opinions and I have tasked the Minister of Water Resources and Meteorology, HE Lim Kean Hor, to work out Cambodian position and seek for a common solution in everyone’s benefit. We have maintained our position to oppose any diversion of the river course for whatsoever purpose from its original stream. Country members of the Mekong basin must abide by the rule that, from upstream, water will not be diverted out of the basin for use in other places that would lead to shallow level of water in the lower stream. We have taken absolute stand on this and been against any move by Thailand to divert the water from the Mekong to other area.
In Cambodia, some politicians also had a vision of digging a river that divert water from the Mekong through Kandal to Takeo and to Kompot province which would bring about water diversion from its original course that will create problem for Vietnam. So I am sure every country members must not buy this idea of diverting the water course. It is impossible to get the water in Russei Jurm Kraom, Atai, Ta Tai, etc. to flow back into the Mekong system rather than being heading toward the sea. However, I have asked HE Lim Kean Hor to conduct study on making use of water potential from the hydroelectric dam for irrigation, and this will be applied in all hydroelectric dams, Pursat I, Pursat II, etc.
China’s Help Realize the Four Priority Areas
I would like to express my sincere thank to our Chinese friend for their help so that Cambodia could get to the objectives it has planned. Let me take this moment to address HE Pan Guang Xue that 23 years ago, on behalf of the Party and Government of the People’s Republic of Kampuchea, I have set a long-term policy of four priority areas for Cambodia. They are water, road, electricity and human resources. It is still correct even after 23 years. I think this will be the areas that Cambodia will have to live with for another twenty years.
The Cambodian People’s Party that is leading the Royal Government of Cambodia will continue with the four priorities whereby water irrigation for agriculture will be our primary attention. We have had assistance from China to build an irrigation system in Battambang’s Konghot area, Tonle Vaiko of Prey Veng and Svay Rieng provinces, in Pursath and Stoeng Keo of Kompot. More will come. As of now Cambodia exported 2.4 million tons of milled rice, while it is operating mono-cultivation pattern. We could extrapolate the figure to twice the number, if we change our mono to bi-cultivation pattern.
As far as road is concerned, we have got so much loans from China to build many roads and we will have to celebrate groundbreakings to build some 300 km infrastructures, which includes roads, bridges, railways and ports. Thirdly, as witnessing here today, we celebrate the construction of hydropower electric plant, one among many others, which will eventually contribute betterment of power supply for national development as a whole. Last but not least, in area of human resources development, we are making steady progress in accordance with short, medium and long-term policies.
Through HE Pan Guang Xue, I would like to thank the Government of the People’s Republic of China for the support they have provided Cambodia with including urging investors to come do business in Cambodia. The Chinese Prime Minister, HE Wen Jiabao, the Chinese President, HE Hu Jintao, the Chairman of the Standing Committee of the National People’s Congress of China, HE Wu Bangguo, have been so helpful in encouraging investors from China to Cambodia.
Peace and Stability Are Main Factors
The fact that we have achieved so much is not accidental. We have made great efforts whereas peace and stability are critical factors. Take this place for instance we could not even reach this part of the country, even prior to 1970s, especially when Cambodia was under French rule, not to mention building massive electric plant like this. If Cambodia lacks peace and stability, would anyone in his/her right mind think that China would pour out money and invest in Cambodia? Having said so and as we see importance of the project, we all must share hands in defending what we have gained.
I would also urge all provincial authorities concerned to make efforts in protecting every segment of transmission lines in their areas of responsibility. I would like to take this opportune moment to express my sincere thank for the efforts of the Ministries of Industry and Finance, the Cambodian Development Council, Electricity of Cambodia and concerned institutions, the de-mining team is also included.
Thank to combined efforts we are in the process of putting our policy of electrifying rural areas of Cambodia into reality, which according to our plan, could take us till 2030 to provide electricity to some 98% of rural areas of Cambodia. I would like to take this auspicious occasion to beg for understanding and permissions from spirits who protect the land, forest and mountains to provide safety and health for the construction and for the success for the people of Koh Kong and Pursath provinces as well as in the whole Kingdom./.