SUMMARY: "On January 4, Poloff and Econoff met with Mr. Damrong Kriakruan, the Burma desk officer at the Thai MFA. Damrong confirmed press and NGO reports that the state-owned power company EGAT Plc has signed a memorandum of agreement (MOA) with Burma,s Ministry of Electric Power on December 9, 2005 to conduct a joint two-year feasibility study with respect to construction of a dam on the Salween (Thanlwin) River at Hat Gyi inside Burma,s Karen State. Consistent with EGAT,s strategy of securing access to low-cost electric power from neighboring nations, the project is envisioned as one of five hydroelectric power projects involving Burma. The MFA expressed its awareness of the sensitivity of projects involving Burma and asserted that the MOA involves completion of the above feasibility study only. EGAT apparently has yet to obtain long-term financing for actual construction. Thus, the reason for conducting the study now is to allow Thailand to keep its energy supply options open. The Embassy expects both EGAT and Thailand,s energy bureaucrats to pursue the development of electric power generating capacity in cooperation with Burma because they expect any potential outcry to be less bothersome than the opposition certain to arise in response to large-scale power generating projects within Thailand. Poloff commended ASEAN on their decision to send the Malaysian FM to visit Rangoon to check up on Burma,s progress with "democratic reform", and also for making a request to meet with ASSK. Damrong noted that Burma had not responded to official Malaysian requests to set dates for the visit, and suggested that Burma,s response to Malaysia vis--vis a proposed meeting with ASSK might be seen as a gauge of how willing Burma is to cooperate with ASEAN." END SUMMARY