Local authorities, government in heated dispute over thermal power project

In a statement released last week on the province’s website, the provincial committee stated that it had once again put the Kien Luong power plant and the Nam Du seaport on an investment blacklist indicating that their investment certificate should be revoked.

The statement came after the Ministry of Industry and Trade (MoIT) announced in October that the government had agreed to give Tan Tao three additional months to study the possibility of transferring the power project from build-operate-own to build-operate-transfer. Such a move reflects the local authority’s loss in confidence in Tan Tao to finance the project as the private investor has been delaying the projects since 2008.

“The investor does not have enough ability and has not yet implemented the project on time, despite the deadline being extended many times,” the MoIT said in the statement.

Early this year, Tan Tao told the provincial committee that the construction delay was due to a deadlock with the government over the lack of a guarantee and undertaking agreement.

The MoIT confirmed that the Vietnam government would not sign a guarantee and undertaking agreement, which is why they have proposed the change to a build-operate-transfer model.

An anonymous source at Kien Giang Provincial Department of Planning and Investment said the provincial committee wanted to bring foreign money into the equation. “We want to attract foreign investors,” he said.

That desire could become reality following news that in May, the UK’s Graham Bell and Associates officially sent a document to the Kien Giang Provincial People’s Committee expressing their interest in investing in the Kien Luong power plant.

Tan Tao gained approval from the government to build Kien Luong electricity centre in 2008. It was due to be one of the largest power plants in the country, capable of producing up to 5,200MW. The power plant and the accompanying deep seaport of Nam Du is estimated to cost about $7 billion.

According to the government’s electricity master plan to 2020, the first phase of the Kien Luong power plant in southern Kien Giang province, is due to go operational by the end of this year. However, Tan Tao has yet to begin construction on the project, having only carried out site clearance.