Vung Ang 1 power plant caught red handed

Vung Ang 1 thermal power plant sourced 790,000 tonnes of coal against the orders of the prime minister

Located in Ky Anh town of Ha Tinh province, Vung Ang 1 thermal power plant was invested by PetroVietnam with an initial investment capital of VND22.25 trillion ($976.8 million). As of April 2016, the investment capital was at VND33.57 trillion ($1.47 billion).

The plant has a designed capacity of 1,200MW with two 600MW turbines and was expected to use an annual volume of 2.9 million tonnes of coal to produce electricity. In September 2015, the first turbine came into operation.

Previously, in late 2012, the Ministry of Industry and Trade (MoIT) approved the scheme on supplying coal for thermal power plants. Vung Ang 1 was listed in the group of plants using domestic coal.

However, in April 2015, PetroVietnam permitted the management board of the plant to sign a coal import contract with Hoanh Son Group. However, during the negotiation and signing of the contract, PetroVietnam failed to report to MoIT.

In August 2015, the PM issued Directive No. 21/CT-TTg assigning MoIT to approve the plan of supplying coal for electricity production. Accordingly, the PM asked EVN and PetroVietnam to buy domestic coal from Vietnam National Coal-Mineral Industries Holding Corporation Limited (Vinacomin) and Dong Bac Coal Corporation.

However, PetroVietnam ignored the PM’s directive and arbitrarily continued to permit the Vung Ang management board to sign the two appendixes with Hoanh Son to supply an additional 600,000 tonnes of imported coal to Vung Ang 1.

Furthermore, in the document that PetroVietnam submitted to MoIT on September 11, 2015 to report on coal supplies for Vung Ang 1, the coal purchase contract with Hoanh Son was not mentioned.

Thereby, according to the contents of the contract, between May 2015 and January 31, 2017, Hoanh Son supplied 790,931 tonnes of coal worth more than VND1.5 trillion to Vung Ang 1.

Along with the violation in ignoring the PM’s directives to use domestic coal for electricity production, PetroVietnam also failed to supervise the origin and quality of the coal supplied by Hoanh Son.

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