A DEAL to complete the construction of the powerful Kamchay hydrodam in Kampot province is on the verge being clinched.

The $120 million project - due to be completed by 1998 - will be capable of generating 120 MW, more than twice Phnom Penh's current minimum needs. However the bulk of the electricity is intended for the larger settlements in the southern provinces and many consumers will be getting power for the first time.

Two Canadian companies Hydro-Quebec and Pommerlau will sign a build-operate-transfer (BOT) contract for the work in January, having signed a Memorandum of Understanding in April, said Rithivith Tep, economic advisor to First Prime Minister Norodom Ranariddh.

Hydro-Quebec are project leaders and will carry out the design and engineering work. Construction work is being contracted out to Pommerlau for the dam across Stung Kaoh Sla, 25 km north of Kampot town.

The new dam will be loosely based on a design produced by the Russians in the late 60s. Ten percent of the work on the dam was completed by the Soviets before the war forced them to abandon it.

Currently four Hydro-Quebec engineers are working in Cambodia and Canada on a pre-feasability study for the dam based on the Russian design and they are due to complete it this month. The $500,000 study is being paid for by the CAID (Canadian Agency for International Development) and will serve as a basis for the Ministry of Energy.

Tep, who also manages a company which facilitates links between the Cambodian government and Canadian firms said that other countries were interested in the project. But he added: "Hydro-Quebec is the only company who has worked for Kamchay since 1993. Furthermore I have been told by officials that they already accept to sign a BOT by January 1995." Tep, an expat Khmer, divides his time between Canada and Cambodia.

Under the contract Hydro-Quebec will operate the dam for 15 years and sell electricity to Electricite du Cambodge (EDC), who in turn would recoup the money from consumers. Hydro-Quebec is putting up 33 percent of the $120 million investment, another Canadian energy company, Power Corp, 25 percent, with the rest provided by the Canadian government. Work will begin after the 1995 rainy season.

First Prime Minister Prince Norodom Ranariddh visited the site on Oct 20 and addressed the vital issue of whether sufficient security can be provided, with groups of bandits and Khmer Rouge still operating in and around the province. In a speech to villagers he said they also must play their part in guarding the dam as well as the RCAF, particularly as it was going to be of direct benefit to them.