Vice Chairman Pham Vu Hong of the province last week wrote to the Ministry of Industry and Trade, asking the ministry to decide the fate of this foot-dragging power project, according to the website of Kien Giang Province.
Work on Kien Luong Thermoelectricity Center has been held up for three years, making those citizens forced to move to make room for the project very displeased. As the project is inactive, a number of households have arbitrarily grown crops in its land, posing many problems to the local government.
Moreover, the slow progress of this power project brings socioeconomic damages to Kien Giang Province and affects the Power Master Plan VI and power supply in the southern region.
Therefore, the provincial government has suggested two ways to handle this project.
If ITACO remained capable of developing this project, it must comply with the schedule given in Decision 3594/QD-BCT of the Ministry of Industry and Trade dated June 25, 2008. ITACO previously pledged to start operating two generators with a combined capacity of 1,200 MW between 2013 and 2014.
If ITACO was no longer capable, the ministry should revoke its right to develop the project and call on other investors to take over the project.
On October 8 last year, the government of Kien Giang met with ITACO to discuss the problems the project owner was facing. ITACO was asked to find ways to continue the project and send a report to the provincial government prior to December 31.
On February 27 this year, another meeting took place between Kien Giang’s government and ITACO, and the project owner was given more time to come to the final decision whether it will continue the project or change the investment format. But so far, ITACO has yet to make its decision.
Kien Luong Thermoelectricity Center is a national key project approved by the Prime Minister. Thus, to revoke the approval in principal, Kien Giang has to make a report to the Prime Minister.
In August 2008, the Government approved Tan Tao Group as owner of Kien Luong Thermoelectricity Center with a capacity of 4,400-5,200 MW. The project consists of two phases, with the first scheduled for completion in late 2013.
The project is planned for development over an area of 555 hectares, costing a total of some US$6.7 billion, excluding the cost for Nam Du Deep Water Port.
Nam Du Deep Water Port will also be developed by Tan Tao in Kien Hai District, Kien Giang Province, about 60 kilometers away from Kien Luong Thermoelectricity Center. It will play an important role in importing coal for supply to Kien Luong Thermoelectricity Center and other thermo-power plants in the Mekong Delta.
The detailed plan for this US$800-million project was approved in February 2010, but it remains on paper now.
As per the original plan, Tan Tao Group will cover 20% of the total cost of Kien Luong Thermoelectricity Center and the rest will be sourced from foreign loans. However, as the project costs a large sum, the project owner needs the Government guarantee and undertaking (GGU) to access international loans.
In July 2009, Tan Tao Group reported to the Ministry of Finance on the financial plan for the project in accordance with the regulations on GGU granting and management.
At a meeting between ITACO and the government of Kien Giang in September 2010, a leader of the provincial Department of Planning and Investment remarked: “ITACO is a wholly private company, and to date there has been no case of the Government providing a private company with guarantee to borrow foreign loans.”
In its latest document sent to Kien Giang’s government, ITACO stated it had poured a total of US$240 million into Kien Luong Thermoelectricity Center.