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Question mark over $150m power station

Question mark over $150m power station

W ITH a splash of television and media coverage, a Memorandum of Understanding

(MoU) has been signed between the Royal Government of Cambodia and Intercore,

Inc, an American company to construct a 106 Mega-Watt power station together

with a transmission and distribution network for Phnom Penh.

The proposed

power plant dwarfs in generating capacity the city's existing generating

stations and could provide most of Phnom Penh's power needs.

However

there is a major, less public obstacle to be overcome. Though other reports put

the deal at $150 million dollar over 10-15 years, the money has neither been

committed nor has it been found.

Another US company, The Wing Group, is

charged with the task of finding the money. According to George Jackovice, of

The Wing Group, finding investors will depend on the success of the Royal

Government in creating an environment which will inspire confidence among

international sources of investment capital.

"We have told the Royal

Government that a legal and accounting framework needs to be established before

we can go to find the financing, so we can create some interest in the finance

community," Jacovice said.

"Right now Cambodia does not have a credit

rating. I don't know of another country without a credit rating," he

added.

"If Cambodia wants a credit rating it will have to create this

framework. The Cambodian government needs the confidence of the international

finance community. I can't create it, and I know that the Cambodian government

knows this," Jackovice said.

Don Cornell, the Intercore's president is

optimistic. "The Royal Government understands the importance of the project and

the importance of creating the rule of law and a legal environment conducive to

inspiring confidence and to securing investments. They are fully commited to the

effort."

Jackovice said after the ceremony that he would leave Phnom Penh

to begin canvassing potential investors. Cornell said that he would start on the

technical side.

The two firms involved in the project, Don Cornell's

Intercore and The Wing Group, have years of experience in their

fields.

The Wing Group is a US company that has been involved in finding

funding for major power projects in China, India and Kuwait. A recent project

was the financing of the massive, 1800 Mega-Watt Teesside plant in England. The

Wing Group's sole interest is in finding funds for power

plants.

Intercore Inc. has its home offices in St Petersburg, Florida.

Intercore's plan is big: three 35 Mega-Watt generators, 22 miles (35 km)

of high voltage transmission line and three to four sub-stations are

planned.

The 110 KV power line will run from north of Boeng Kak, to the

west and south of the city in a large semi-circle. "We cannot put power lines in

front of the Royal Palace, so transmission lines will run radially inward from

the 22 mile semi-circle around the city."

Two of the generators will be

gas turbines, the third will be steam driven. Waste heat from the gas turbines

will power the third generator. "Using a stag-cycle will be much more

efficient," Cornell explained.

"We want to put in a central generator

that has some size and that has some longevity. We are looking at 25 years,"

Cornell said.

Jackovice and Cornell say that neither company has links to

the United States government. "But Ambassador Charles Twining and the US

government fully backs the project. The US wants to see Cambodia take off,"

Cornell said.

Cornell envisages future power plants in Cambodia's major

cities which use the same technologies as the 106 MW plant, and thus will

require the same spare parts, and the same training for its managment and

maintenance. For him the project is just the first step in electrifying the

entire country.

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