Philippine developer drops plans for 7-MW Suawan

Hedcor Tamugan Inc., a hydro developer subsidiary of the Philippines’ Aboitiz Power Corp., has abandoned plans to build the 7-MW Suawan hydroelectric project due to delays in securing permits for the project.

Hedcor Tamugan won bidding for a 12-year power supply agreement with Davao Light &Power Co. starting in August 2009. (HNN 10/4/07) A total of 400 million kWh was to be supplied by the 34.5-MW Tamugan hydropower complex in Davao del Sur Province. Tamugan was to include three run-of-river plants, 20-MW Tamugan, 7.5-MW Panigan, and Suawan.

Hedcor said plans for Suawan would be dropped due to escalation of construction costs.

�The cost escalation, which resulted from delays in securing permits for the Suawan plant, has rendered the Suawan plant economically unfeasible to build,� Aboitiz said in an August 14 statement to the Philippine Stock Exchange.

Aboitiz said the reduced capacity of the Tamugan complex would not affect the group’s ability to fulfill its power contract.

Hedcor President Rene Ronquillo told the government’s Philippines News Agency the company hopes to secure water permits for the remaining plants once it reaches a compromise with the Davao City Water District. However, he said continued delays and cost escalations might force Hedcor to abandon the other two projects.

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