Members of a network of people from eight provinces along the Mekong River demonstrate at Ch Karnchang
Ch Karnchang is confident it will earn a return of 10 per cent on its investment in the Bt76-billion Xayaburi hydroelectric project in Laos.
The mega-project, with construction beginning this year and estimated to be completed by 2020, is vital for the future success of the company, chief executive officer Plew Trivisvavet told the annual shareholders' meeting yesterday.
Xayaburi Power Co was granted a 29-year concession from the Laotian government and Ch Karnchang should earn gross profit estimated at 12-13 per cent per year on its 30-per-cent ownership of this company, he said.
Other shareholders are Natee Synergy Co, a subsidiary of PTT, which holds 25 per cent, Electricity Generating Co (Egco) with 12 per cent, the Laotian government with 20 per cent and others with the remaining 13 per cent.
Ch Karnchang will invest close to Bt30 billion gradually over the period of construction.
The company will try to avoid the problems it encountered when it managed the construction of the Bt2.4-billion Nam Ngum 2 power project in Laos, he said. That project earned a disappointing 5 per cent, down from its projected 10-per-cent profit, because of increased construction costs due to the unforeseen rapid rise of the price of oil from US$60-$70 to $140 per barrel during its construction in 2009.
Ch Karnchang's construction backlog totals Bt141.3 billion. Besides Xayaburi, the company is constructing the Purple Line of the mass-transit project under the first contract. Covering the Bang Sue-Bang Yai section, it has a total value of Bt13.97 billion, of which Bt5.28 billion remains outstanding.
The Blue Line under the second contract has a total cost of Bt9.98 billion and the extension of the Blue Line, which will be the fifth contract, is expected to cost Bt4.67 billion.
Also the company is constructing a tobacco plant at Wang Noi, Ayutthaya province, with an expected cost of Bt4.6 billion.
Ch Karnchang is expected to earn profits from other current projects this year with a combined value of Bt15 billion.
The company will perform even better in the coming years, Plew said.
Shareholders approved a dividend payment of Bt0.25 per share for the last half of 2011 on top of the dividend for the first half of Bt0.10. The total dividend for 2011 was Bt0.35 or 20.85 per cent of the share's average cost.
The dividend payments for last year will cost the company Bt578 million.
