$6.7m power project in doubt

KIEN GIANG (VNS)— If the Tan Tao Investment and Industry Corporation (ITACO) fails to arrange capital for investment in Kien Luong Power Centre before June 30, the project will likely be halted.

The statement was made by deputy chairman of Kien Giang Province’s People’s Committee Pham Vu Hong.

Despite being licensed five years ago, the project has barely made headway.

Kien Luong Power Centre was supposed to be built in Binh An Commune in the province’s Kien Luong District with investment of about US$6.7 billion.

Thermal power plant Kien Luong 1-the first phase of the project-was scheduled to come into operation by the end of this year.

According to ITACO, a subsidiary of Tan Tao Group, land clearance for the construction of Kien Luong 1 was completed over 18 months ago, but the project has since made no progress due to a lack of capital.

The $800 million Nam Du Deep Sea Port in Kien Hai District’s An Son Island Commune, 60km from the Centre, was designed to receive ships of 150,000 DWT and 50 million tonnes of coal to transfer to the Centre and thermal power plants in the south. However, the port still only exists on paper.

ITACO General Director Thai Van Men said that some foreign banks had agreed to lend the corporation capital to continue the project. But to sign credit contracts, the company required the Govern-ment’s guarantee, which had so far not been forthcoming.

Le Khac Ghi, director of the provincial Planning and Investment Department, said those responsible for a project – whether conducted under the Build-Operation-Own or Build-Operation-Transfer model – must prepare at least 20 per cent of total investment from their own budget in order to be eligible for a loan.

While the Government sought to restructure the economy and manage the public debt with a new level of scrutiny, according to Ghi, the project’s standstill presented a major obstacle – hindering the country’s economic and energy development and making it difficult for the province to attract other investors with stronger financial capacities and experience.— VNS

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