Thai firm strike 17.5 Baht ($700 mi

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Subject: Thai firm strike 17.5 Baht ($700 million) deal 


FIRM STRIKES 17.5-BILLION BAHT (US$ 700 million) DEAL WITH RANGOON

January 24, 1994
Sasithorn Ongdee
The Nation (Bangkok)

Onk Mining and Construction Co, a little-known Thai logging firm
with business interest in Burma, has landed a deal with Rangoon for
building hydro-electric dams, roads and a prot there, at a combined
cost of Bt 17.5 billion (700 million U.S. dollars), according to
the firm's chairman, Krin Pongpatchote.

  The memorandum of understanding recently signed calls for the
implementation of four projects.  Two ar the building of dams at
Nam Ruak and Nam Kok with an annual capacity of 25 and 100
megawatts respectively.  These sites are in Shan State, the easter
area of Burma bordering Thailand.  The projects will require a
combined investment of about 10 billion baht (400 million USD) and
will supply electricity to Burma and Thailand.
  The Nam Ruak Dam will also provide irrigation for 16,000
hectares, flooding an area of 900 square kilometers, the Nam Kok
supplying water for irrigating 64,000 hectares from a 2,920 square
km catchment area.
  It will take about 6-8 years to complete construction of the two
dams.  He said Rangoon is expected to sign the joint venture
agreement with the company by March this year.  Both sides are
still negotiating details of the agreements.  Shan State
Development General Trading Co Ltd, a Burmese state-owned firm
responsible for this project has already issued a letter of intent
for ONK to undertake construction.
  Krin said his company will hold the majority stake in these two
projects.  Japanese trading giant Kanematsu (Thailand) Co Ltd,
Works Consultant and Service Corp, First Federal Banking Corp and
American Product Distribution Co (Wisconsin) have been invited to
hold shares in these projects.
  Should they become partners, they will be expected to provide
capital, machinery and specialists to implement the construction,
with each holding an equal stake.
  Burma will buy 10 per cent of the electricity output generated by
both dams, the rest would be sold to the Thailand Electrical
Generating Authority.
  ONK Mining and Construction has held talks with the Egat governor
and other officials on this planned ale of electricity to Thailand,
where demand is growing rapidly.  Egat last week in principle
agreed to buy  the power, according to Krin.  Both sides will
conduct field trips to the sites to survey possible power
transmission routes across the border.
  Another deal is to build the 350-km road from Mong Yai to
Kengtung in Shan State at a cost of about 4.5 billion (112 million
USD).  This project will be completed in 3-4 years.  The last
project is to build a commercial port at Thilawa, 65km from Rangoon
at a cost of Bt 2.12 billion (55 million USD).
  Krin said all four projects will commence about the same time. 
Earlier other Thai companies such as Loxley (Bangkok) Co. West
Group and firms affiliated with Thai politicians approached Rangoon
from similar deals, but none was successful, he claimed.
  Although ONK Mining and Construction is not well-known in
Thailand, it is an active firm in the international logging
business.  Registered here with a capital of Bt 500 million, it
originally was a building contractor.  The company now has 5-6
subsidiaries, mostly involved in logging in Burma.