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EVN refuses 13 power plant projects, why?   2008-09-23 - Tien phong

The Electricity of Vietnam has refused to implement 13 power projects named in the power plant development plan, a decision that has been described by Tran Viet Ngai, Chairman of the Vietnam Energy Association, as a ‘wise move’.


Ngai said that if the slow investment rate seen in the last few years continues, Vietnam will still face electricity shortages in coming years. At the current investment rate, Vietnam will not have a development level like the present Thailand’s for 30 years more.


Previous power plant development plans had short-term visions of five years only. Do you think that the current plan has reasonable changes in comparison with the previous ones?


Under the latest plan, we need to have 30,000 MW more in 2010-2015, including 26,000MW of coal-run thermopower plants. However, the problem lies in the tardiness of projects’ implementations. Pha Lai 2 thermopower project, for example, was initially planned to built within three years, but in fact, it took eight years to finish the construction. Uong Bi expanded plant, which was initially planned to be implemented within three years, took six years.


While Vietnam is seriously lacking electricity, EVN has announced it will not implement 13 projects. What is your comment about EVN’s move?


I think EVN has made a wise move. I don’t agree with the opinion that EVN only undertakes good and profitable projects, while refusing ‘thorny’ projects. In fact, the 13 projects are really good projects with high feasibility.


I think there are three reasons that EVN has refused the 13 projects. First of all, it cannot arrange hundreds of thousands of billion VND for the projects, which have the total capacity of 13,000 MW. Second, the technical works for the projects will be very heavy.


It would not be so easy to do all 13 projects. Meanwhile, Vietnamese engineers are only keen on hydropower plants, while they are not experienced in thermopower plants.


Third, if undertaking the projects, EVN would have to deal with a lot of complicated works. Moreover, it is not so easy to ensure coal supplies to run the plants. Vietnam will have to import coal to run power plants by 2010.


EVN has already learnt a lesson from building the 600MW Pha Lai 2 power plant. It took four years to draw up the project, arrange capital, clear land for construction, and another six years to build the plant.


Even EVN, the group which is responsible for developing power plants, is incapable of undertaking the projects. How will the target of 30,000 MW by 2015-2020 be reached, then?

I think that if domestic investors cannot undertake the projects, we need to call for foreign investment. I believe that a lot of foreign investors are interested in the power sector as it can bring profit to them.


However, there are three challenges for foreign investors. First, the regulations on bidding. Second, they have to negotiate about power prices with EVN, while EVN always wants to buy electricity at low prices. And third, complicated procedures in Vietnam.


In the latest news, the Vietnam National Oil and Gas Group (PetroVietnam) has sent a document to the Prime Minister, asking for permission to implement the 13 power projects EVN has refused to undertake.


These are the 1,200 MW Duyen Hai 2 thermopower; Duyen Hai 3.1; Duyen Hai 3.2; Soc Trang 3.1; Soc Trang 3.2; Vinh Tan 3.1; Vinh Tan 3.2 (1,000 MW for each); Vung Ang 3.1; Vung Ang 3.2; Hai Phong 3.2; Hai PHong 3.3; Quang Trach (1,200 MW for each); and 600 MW Hai Phong 3.1.


EVN said that it cannot arrange capital for the projects as commercial banks have refused to give loans after considering that the inflation rate is high while the electricity price is low, fearing that EVN cannot pay debts.

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