LookAtVietnam – Many large power generation projects will face delays in implementation if they have to go through all the stipulated administrative procedures.
With the regulation, seven big power projects invested in by two state-owned economic conglomerates, the Electricity of Vietnam (EVN) and Vietnam Oil and Gas Group (PetroVietnam), have to follow the procedures stipulated by the National Assembly.
The seven projects are: the EVN-invested Lai Chau Thermopower Plant, capitalised at 32,568 billion dong and expected to have the capacity of 1,500 MW when operational; and six PetroVietnam-invested projects, namely Vung Ang 1 thermopower plant, Long Phu 1 thermopower, Thai Binh 2 thermopower, Quang Trach 1 thermopower, Song Hau 1 thermopower plant and Luong Prabang thermopower, which have the capacity of between 1,200 and 1,500 MW.
However, to date, only one of the seven, Lai Chau thermopower plant project, has completed the procedures stipulated in Resolution 66. The other six, invested in by PetroVietnam, have not been submitted yet to the National Assembly for investment approval.
Of these six projects, Vung Ang thermopower project, which has the total investment capital of 28,272 billion dong, is a special case. Concerned agencies have suggested that the investment procedures stipulated by Resolution 66 be thrown out. At first, when Lilama Corporation was the investor of the project in 2006, the estimated investment capital was set at 19,996 billion dong only. However, the estimated investment capital has risen to 28,272 billion dong since being transferred to the new investor, PetroVietnam.
When the Vung Ang project was transferred to the new investor, some infrastructure and supporting works of the project had been completed. Moreover, the investment capital has become higher due to the increases in material prices and equipment in the world market in comparison with 2006.
The investor is concerned that if the project must be halted to follow administrative procedures from scratch it would badly affect the implementation of the project, which is already underway.
Meanwhile, the resolution does not clearly stipulate what to do in this case, where a project has been approved already by competent agencies and has been implemented, but then the investment capital increases. The resolution does not say that such a project must follow the procedures from scratch.
It seems unavoidable that Petro Vietnam will have to obey the National Assembly’s resolution in implementing the other five projects, even though analysts have said that the regulations in the resolution have become ‘out of date’, especially the regulation on project capital, since the prices of materials and equipment have been increasing sharply over the last three years. A project with the investment capital of 20 billion dong now is not a huge project anymore.
PetroVietnam has drawn up the project on building Long Phu 1 thermopower project capitalised at 26,044 billion dong and has submitted it to the Prime Minister. The conglomerate is also completing procedures for the project on Thai Binh 2 thermopower project (29,621 billion dong).
As for Quang Trach 1 thermopower project which has the investment capital of 26,100 billion dong, PetroVietnam has proposed the Government allow it to draw up a construction work study and skip the compilation of the work investment report. The noteworthy thing of the three projects is that the investor has started the construction of some packages of the projects.
The two other projects, namely Song Hau 1 thermopower plant (28,600 billion dong) and Luong Prabang, are still on paper.