Pestech awarded $100M transmission line contract

A view of the Stung Tatai hydropower dam after its inauguration in 2015. Heng Chivoan

Pestech awarded $100M transmission line contract

Phnom Penh Post | 10 April 2017

Malaysian-owned power infrastructure provider Pestech (Cambodia) Ltd has been awarded a contract to build a 230-kilovolt transmission line valued at $100 million to connect Koh Kong province’s Stung Tatai hydropower dam to Phnom Penh, according to a filing on the Malaysian stock exchange.

The deal, which was originally awarded to Alex Corporation in February of this year, allows the company to eventually complete a 220-kilometre line that cuts through the largely untouched Southern Cardamom Mountains.

Victor Jona, director-general of the Ministry of Mines and Energy, said that the Pestech line will become the second dedicated line to transfer electricity from the Stung Tatai hydropower dam while also connecting additional power facilities in the area.

The Stung Tatai dam was constructed by the China National Heavy Machinery Corporation for $540 million and began producing electricity in late 2015.

“When we have an additional transmission line, distribution will be more reliable,” he said. “Once completed, there will not be as many power outages as before and it will provide a secure electricity source to fulfill the demand of the industrial sector.”

According to the filing on the Malaysian stock exchange, Pestech will undertake the design, engineering, manufacturing, installation, testing and commissioning of the line for Alex Corporation. The project will commence within three months with construction expected to last three years.

While Jona confirmed that the contract between Alex Corporation and the government is under a build, operate, transfer (BOT) agreement, he could not provide further details. However, according to documents released by the Council of Ministers in late February, the deal would be under a 25-year BOT agreement.

Mey Kalyan, senior adviser at Supreme National Economic Council, said that while an additional transmission line would improve reliability to end consumers, the government needs to do more to improve “quality electricity” to keep up with its lofty Industrial Development Plan that aims to boost industrial diversification.

“The creation of coal power plants and hydropower plants with more transmission lines adds something, but it is not enough to meet the needs of manufacturers,” he said. “We should also think about building power stations next to special economic zones to give investors more confidence and reliability.”