By Amy Sawitta Lefevre

A Thai court accepted a lawsuit against state-owned Electricity Generating Authority of Thailand (EGAT) and four other state bodies on Tuesday for agreeing to buy electricity from a $3.5 billion hydropower dam being built in neighbouring Laos.

The Xayaburi dam, which will be the first on the main stream of the Mekong River in Southeast Asia, is at the heart of landlocked Laos' ambitions to supply power to the region, with Thailand set to buy around 95 percent of the electricity generated.

Activists say the project threatens the livelihood of tens of millions who depend on the river's resources.

Villagers from Thai provinces near the Mekong petitioned the Administrative Court in 2012 to suspend a power purchasing agreement signed by EGAT and Laos's Xayaburi Power Company Ltd, but the court ruled it had no jurisdiction to hear the case.

That decision was reversed on Tuesday when the Supreme Administrative Court sided with villagers, who are demanding full environmental and health impact assessments.

Shares in Thai builder CH Karnchang, the main contractor for the controversial dam, were down 3.1 percent at 0810 GMT after the decision.

"The villagers are hoping that with this case the court will suspend the power purchase agreement and in the meantime carry out a transboundary impact assessment and further consultations," Ame Trandem, Southeast Asia programme director for the International Rivers group, told Reuters.

"Ultimately, if the court finds the purchase agreement was approved illegally, it could cancel the agreement altogether."

In 2011, member states that make up the Mekong River Commission overseeing the river's development, agreed to conduct further environmental impact assessments before construction proceeded. Laos went ahead with a groundbreaking ceremony in November 2012, signalling the formal start of construction.

Laos, Thailand, Vietnam and Cambodia share the lower stretches of the 4,000-kilometre (2,500-mile) Mekong. Vietnam and Cambodia have urged Laos to halt the dam's construction pending further study.

Related Articles

Features

INDONESIA: Arrested Development

by Nimitt Dixit |

When Indonesia established a carbon trading mechanism last year, the move was welcomed across the board. However, a lack of strong implementing regulations, regulatory uncertainty, and insufficient business incentives have combined to ensure slow-going for the country's carbon trading market.

Features

EXPLAINER: TikTok Set To Restart E-Commerce in Indonesia, but Doubts Persist

by Sarah Wong |

TikTok has been engulfed in regulatory whirlwinds across the world, which have put a dent in its global ambitions. In the United States, the popular social media app owned by ByteDance faces a ban in the United States unless its Beijing-based parent company divests its U.S. operations, and in Indonesia, TikTok had to temporarily quit its e-commerce business as its shopping arm ran into a slew of obstacles.

Features

EXPLAINER: Could proposed India competition rules usher new Era of antitrust regulation?

by Nimitt Dixit |

The Competition Commission of India (CCI), the country’s antitrust regulator, has come out with a draft framework for commitment and settlement of cases, as well as a draft merger control guideline which, when finalised and enforced, are likely to substantially over-haul antitrust regulation in the country.