Capital-starved projects becoming a waste

April 09, 2011 | 10:26
Sourcing investments for building waste-water treatment systems is a headache to relevant management agencies.
illustration photo

According to Ministry of Planning and Investment’s Department for Economic Zones Management statistics, 127 operating industrial zones (IZs) are yet to have in place waste-water treatment facilities currently, making up 40 per cent. Of which 40 IZs have been brought online with urgent needs to build such necessary facilities.

Industrial zones alone have dumped into the environment around one million cubic metres of waste water per day, said general director Le Duc Bao at Seen Technologies Corporation, which specialises in providing the market with waste-water treatment systems.

Bao estimated by 2015 Vietnam would need around VND20-VND30 trillion ($966.1 million-$1.44 billion) worth in investment capital to build waste-water treatment facilities at IZs, irrespective of around VND2 trillion ($96.6 million) to offset these facilities’ operating costs.

The figure was based on the assumption that with an average annual industrial production growth of 15 per cent by 2015 Vietnam’s IZs would dump out around two million cubic metres per day and approximately VND10million -VND15 million ($483-$724) was required to treat one cubic metre of waste water on average.

“This [huge capital amount] represents a big challenge in capital as well as corporate social responsibility towards IZ developers,” Bao said.

Pursuant to Decision 43/2009/QD-TTg dated March 19, 2009, Decision 126/2009/QD-TTg dated October 26, 2009 and Decree 151/2006/ND-CP dated December 20, 2006, industrial zones’ waste water treatment facilities were one among those benefited from government’s target credit sources as well as preferred loans.

Many IZs found it difficult to source sufficient investments for building waste-water treatment facilities due to limited credit sources. Consequently, up to 90 per cent of existing waste-water treatment facilities at IZs were built with enterprises’ disposable capital.

Reality shows that lots of IZs got access to preferred loans from Ministry of Natural Resources and Environment’s Vietnam Environmental Protection Fund (VEPF) to build their waste-water treatment systems.

Thus far, 23 IZs sourced capital to build waste-water treatment plants from VEPF, making up over 45 per cent of the fund’s capital sources, said VEPF’s director Nguyen Nam Phuong.

The customers could source up to 70-75 per cent of total investment capital with 10-year term loans from VEPF at a favourable interest rate of 5.4 per cent per year, Phuong said, adding that IZ’ waste water treatment was one of five priority investment areas at VEPF.

Under prime ministerial Decision 1929/QD-TTg and Decision 1930/QD-TTg dated November 20, 2009 approving Vietnam’s water supply and drainage development orientations to 2025 with a vision towards 2050, by 2015 all Vietnam’s IZs must have in place waste water treatment systems, otherwise they will be obliged to stop operating.

According to Ministry of Planning and Investment’s Department for Economic Zones Management, Vietnam is currently home to 260 industrial zones (IZs), economic zones and export processing zones covering over 71,000ha in total area. Of them, 173 IZs are on-going and other 87 are in site clearance and construction stage.  Of the former, 105 IZs already have waste water treatment systems in place, making up 61 per cent of total. Other 43 IZs are involved in building these facilities which were slated to come online in the near term.

By Tu An

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