A Thai dam-building company has said it is prepared to work with and employ KhmerRouge to build three dams in Koh Kong province.

The company, MDX Power Plc., is on the verge of signing a Memorandum of Understandingwith Cambodian Deputy Prime Minister Ing Kieth on the dam-building project.

It is understood the deal - which is not part of the Mekong River Commission plans- has yet to be struck.

Ing Kieth and Defence Minister Tea Banh have already held talks in Bangkok with MDXand the Thai Department of Energy Development and Promotion (EDP).

The three dams will be on the Stung Menam river in Koh Kong, near the Thai provinceof Trat.

The $440,000 dams will be used to generate electricity for both Thailand and easternCambodia, and to irrigate Thai orchards.

The Royal Thai property and investment management company, Crown Property Bureau,has recently bought a 10 percent stake in a subsidiary of MDX Power Plc, called MDXLaos Co. MDX Laos is investing in hydro-electricity projects in Laos.

In an article on Nov 6 in The Nation newspaper in Bangkok, the paper quoted an interviewwith the powerful Dr Prathes Sutabutr, who is the director-general of EDP. The Nationsaid EDP was "keen" on the project.

The Nation asked Prathes about the difficulties of working in the remote Cambodianjungles and mountains, specifically citing the fact that it is an acknowledged KhmerRouge stronghold.

"General Tea Banh, who is in charge of Koh Kong province, has sought to assureus about security," Prathes was quoted by the paper as saying.

"We can talk not only with the Cambodian government but also with the KhmerRouge. We can ask them to become employees and join in the construction.

"I think the Khmer Rouge can talk with us, the Thais, the authorities concerned.General Tea Banh will understand this," Prathes said.

The Nation also quoted MDX Power Plc senior vice-president, David Michael, saying:"We are not so concerned about security.

"It would be an issue if the project was deeper inside Cambodia. Also, the Thaimilitary is active in the region, and we hope they can help us."

Prathes, responding to a question whether Ing Kieth was willing to "make a dealwith the Khmer Rouge", said: "I don't know but I hope so."

When asked by The Nation whether MDX Power Plc would be willing to pay the KhmerRouge, Prathes replied that he did not know yet.

Under an anti-Khmer Rouge law, the United States has the ability to impose toughsanctions on any "group or country" that is proved to be aiding the outlawedrebel group.

It is understood that the law has recently been widened to include not only militaryassistance, but "commercial" interests as well.

Thailand in the past has heatedly denied official complicity with the Khmer Rouge- though in some areas, particularly logging - conclusive proof has been broughtto light of Thai assistance. Though some commentators have noted a drop-off in Thaisupport to the Khmer Rouge - particularly in military, cross-border matters - loggingcomplicity is still considered a huge problem.

A spokesman from the U.S. Embassy said that he could not comment on the Nation'sarticle because he did not know how reliable it was, whether Prathes was correctlyquoted, what he meant, nor whether it was speculative or hypothetical.

However, "if this project is in fact implemented we would have to see how itwould be effected by U.S. law," he said.

Neither Ing Kieth nor Tea Banh could be contacted for comment at press time.