Putting an end to long-delayed thermal power and port projects

Tan Tao Investment and Industry Corporation (ITACO)’s $2-billion Kien Luong 1 thermal power plant and $800-million Nam Du deep water seaport projects located in Kien Giang province, will have their investment certificates revoked due to the long delay in construction.

Deputy Prime Minister Trinh Dinh Dung has assigned the Ministry of Industry and Trade (MoIT) to collaborate with relevant ministries and the Kien Giang People’s Committee to complete the procedures to revoke the two projects, according to newswire Dantri.

Licensed in January 2008, ITACO planned to develop Kien Luong power and port complex under the build-own-operate (BOO) format on an area of 555.9 hectares. The project includes an industrial park, an urban area, a deep water seaport, and a power plant with a total generation capacity of 4,400 megawatts.

According to plan, the construction of ITACO’s Kien Luong complex was expected to start in 2009 and be completed in 2018. However, ITACO could not keep the plan on track for the deadline to launch commercial operations in 2018 due to the group’s troubles in mobilising funds for the project.

In 2013, to address the investor’s problem and get the project back up and running again, the Vietnamese government allowed ITACO to modify its investment model from BOO to build-operate-transfer (BOT), so that it could receive government guarantees to realise the project.

In 2014, ITACO sought partners to establish a consortium to implement the project. Leading French energy company EDF and Korean Samsung and Hyundai groups have expressed to join. Previously, the Kien Luong 1 thermal power project was also considered by UK investor Graham Bell & Associates Limited. However, ITACO declined to disclose the official partner.

It was not until December 2015 that the silence was finally broken, when ITACO and MoIT signed a memorandum of understanding on developing the BOT project, paving the way for its resurgence, following six years of financing trouble.

Under the latest MoU, Kien Luong 1 was scheduled to start generating power by February 2025. The plant would have two generators with the combined capacity of 1,200MW, representing a total investment capital of more than $2.4 billion. However, the project has yet to take a single step forward.

The Kien Giang People’s Committee has proposed the PM to withdraw the license of the project for numerous reasons. Notably, the investor had delayed starting the construction, thus it was withdrawn from the government’s adjusted master plan on electricity development in the 2011-2020 period with orientations to 2030.

Besides, the province is concerned about the environmental pollution caused by using coal for its operations, hampering the development of tourism in the province.

In addition, local residents heavily protested handing over agricultural fields to the investor due to the long delays. They were hoping that they would be provided with jobs once the plant comes into operation. However, the project has yet to be implemented, leaving locals hanging.

Regarding Nam Du deep water seaport, in July 2010, ITACO and Royal Haskoning Vietnam Co., Ltd. signed an engineering consultancy agreement for the project. Accordingly, the construction of the project with the total investment capital of $800 million would be divided into two phases.

The first phase was expected to be implemented in 2010-2013, allowing the port to accommodate vessels of up to 80,000DWT. In the second phasebetween 2014-2022, the port could deal with 150,000-200,000DWT vessels.

However, to date, the port project is still immobile.

by Ha Vy / VIR