The ground-breaking ceremony of Duong River Surface Water Treatment Plant was held successfully on March 9, 2017 in Phu Dong commune, Gia Lam district, Hanoi.This project was awarded an investment certificate by the Hanoi People’s Committee nine months ago.
With the sizeable total investment of $225 million for phase I spreading over 62 hectares of land area for the water treatment plant and 76 kilometres of pipelines, this project is offering thousands jobs for land clearance and investment preparation only.
The ground breaking ceremony of Duong River Surface Water Treatment Plant was an evidence to Hanoi city authorities’ commitment and efforts to create the best conditions for investors in Hanoi.
On his key note speech in the event, Nguyen Duc Chung, chairman of the Hanoi People’s Committee, urged the project to shorten the expected start of commercial operation from 22 to 19 months after the ceremony, to meet locals’ increasing demand for a stable and clean water supply.
At its current rate of increase, Hanoi’s clean water demand is expected to reach 1.5 million cubic metres a day by 2020, while the existing supply can only provide 0.9 million cubic metres a day.
Also, the lion’s share of the current water supply relies on underground water that is not clean, while surface water supply is limited and unstable. In this context, the ground-breaking ceremony of the surface water plant is a strong evidence to Hanoi’s initiative to introduce larger variety to its water sources. This significant water supply project aims to meet the clean water needs of about three million people in 168 communes and 8 districts of Hanoi, Bac Ninh, and Hung Yen provinces along Road 179. In particular, the project aims to produce 150,000 cubic metres a day by 2018 and 300,000 cubic metres by 2020.
This is another high-profile investment of Vietnam-Oman Investment (VOI) in its distinguished water portfolio in Vietnam.
Established in 2008 as a joint venture between two sovereign wealth funds, the State General Reserve Fund of Oman and State Capital Investment Corporation (SCIC) of Vietnam, VOI is a known authority in infrastructure investment in the country.
Capitalised by the two nations’ governments, VOI has shown strong long-term commitment in reputed infrastructure projects, and companies, including power plants, toll roads, water supply, ports, and logistics.
So far in the water sector, VOI has one project in the Mekong Delta, the highest salt marsh area in Vietnam, another in Ho Chi Minh City, and now this start-up project in Hanoi.
VOI is one of the few private equity firms in Vietnam that has engaged in green-field or brown-field projects because of its distinguished understanding of the local circumstances and long-term commitment to realise the potential of such projects.
“We are very proud to have VOI as a joint founding partner,” said Do Thi Kim Lien, chairwoman of Duong River Surface Water JSC. “Unlike other private equity firms, VOI has a deep working knowledge of the water industry and has been enthusiastic to join us from as early as the pre-feasibility study stage. Their valuable experience with water projects in Vietnam has helped us a lot, especially in risk management and corporate governance during the greenfield stage.”
More than just another foreign financial investor, VOI positions itself as an active and responsible partner in the investee companies, adding value in not just technical but also institutional matters.
Le Quoc Binh, CEO of Ho Chi Minh City Infrastructure Investment JSC (CII), one of the giant infrastructure consortiums in the South, commented that VOI, as a sovereign fund from Oman, has a vested interest in Vietnam’s socioeconomic development and has helped a lot in corporate governance for both the CII Group and its subsidiaries.
“If every private equity firm in Vietnam had such commitment and long-term vision like VOI, socioeconomic development would not even be on the table anymore,” said Binh.
Meanwhile, Abdul Malik Abdullah Zahir Al Hinai, presented for the Ministry of Finance of the Sultanate of Oman, said that they were happy with VOI’s performance so far and lauded its achievements in furthering Vietnam’s economic development and people’s security.
“I see that VOI has made active contributions to help the Vietnamese government solve the urgent need for clean water. Such a project is the evidence of a fruitful cooperation between the two governments to better the living-standards of the people of both nations,” Hinai said.
As a symbol of strong economic ties between Vietnam and Oman, VOI is hoped to join in the areas and address the critical needs of the more than 90 million Vietnamese people to mark the country as a highlight in the investment portfolio of the Sultanate of Oman.