Tata coming back for another bite of the cherry

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“Tata Power has received a letter from the government of Vietnam that allows the company to pursue feasibility studies for Long Phu 2 power project,” a Tata Power representative told VIR via email last week.

The company refused to provide detailed information including investment cost. However, the firm  said it “shall now take up the next steps expeditiously” after receiving the Vietnamese government’s letter.

The government’s approval in principle is the first step that Tata Power has reached to develop this project, which it proposed to invest in January. Tata Power started showing its interest in this project in early 2012, after a visit to Vietnam by Menesh Dave, head of Tata Power business development for ASEAN. The Long Phu 2 is also the first Tata Power’s interest in this market.

Long Phu 2 will be one of three thermoelectricity plants in Long Phu thermoelectricity centre planned by the government through 2025. The first plant, Long Phu 1, is built by the state-run PetroVietnam which is scheduled to start commercial operation in 2015.

According to the nation’s electricity development master plan,  Long Phu 2 would comprise two 600-megawatt turbines.

Tata Power’s preparations indicate that Tata Group still eyes Vietnam as a destination for investment, despite the deadlock of a $5 billion integrated steel project in Vung Ang Economic Zone, central Ha Tinh province.

In 2007, Tata Steel proposed the steel project to Vietnamese government and it has been stuck since then as the investor and local government failed to reach an agreement related to site clearance cost.

However, so far Tata Steel had not yet taken a decision on whether it would consider moving the project from Vietnam, said Indronil Sengupta, chief executive of South East Asia Projects at Tata Steel Limited.