Dung Quat not as capital hungry as first thought

The government yesterday reported to the National Assembly that rough calculations showed that the

project, built between 2005 and 2009 at the Dung Quat Economic Zone, might use less investment capital than it was estimated initially.

“The refinery will likely be more effective. The investor will submit specific reports to the National Assembly about the project’s capital after its accurate balance-sheets are completed in December, this year,” the report stated.

However, another government report released in late last month revealed that the real investment capital for the project was VND10 trillion ($500 million) lower than initially estimated.

The government said that the project’s investment capital had been revised up from $1.5 billion in 1997 to $2.501 billion in 2005 and to $3.053 billion in 2009. It was due to fluctuations in construction material costs, exchange rate and an increase in the project’s related works.

Minister of Industry and Trade Vu Huy Hoang said that the project had greatly benefited the country, especially the central region.

He said the refinery was operating well with its whole designed capacity. Its high-quality products met 30 per cent of local demand, helping Vietnam be less dependent on foreign oil product imports.

By the end of September, 2010, the refinery churned out 5.5 million tonnes of products, of which 5.3 million tonnes were marketed locally, with total revenue of over VND25 trillion ($1.25 billion), of which VND3 trillion ($150 million) was contributed to the state budget.

The refinery directly employs about 1,400 people and indirectly brings employments to dozens of workers in the sectors using its products.

Quang Ngai province’s gross domestic product (GDP) grew by 11-14 per cent per year in between 2005-2008. However, in 2009, the local GDP grew by 21 per cent thanks to the refinery.

The province’s budget collection was VND529 billion (more than $26 million) in 2005, VND1 trillion ($50 million) per year in between 2006-2008 and VND6.4 trillion ($320 million).