The government of Vietnam has decided to terminate deals with Russian power giant Inter RAO and PetroVietnam, its own energy utility, as it races to complete a $4.1bn coal-fired power station in time to prevent looming energy crisis.
The government will now replace both with another state-owned entity, Vietnam Electricity (EVN), with a view to completing the plant before 2029.
Vietnamese Prime Minister Nguyen Xuan Phuc has also asked the Ministry of Industry and Trade to look for alternative sources of energy, as the Vietnamese economy is expected to double in size by 2025.
Construction work on the 2.4GW Quang Trach Power Centre in Quang Binh province, central Vietnam, began in 2011 but so far only an administrative building is complete.
The project consists of two 1.2GW turbines; the first unit, which was to be developed by PetroVietnam at a cost of $1.7bn, was originally scheduled to come online in June 2015 and the second in December.
The delay was blamed on a failure to find investment capital, exacerbated in the early stages of the scheme by the global recession. PetroVietnam has also said that the large scale and complicated technology of the power plant has led to delays.
In 2013, both Samsung of Korea and RAO expressed an interest in taking on Quang Trach-2 on a build-operate-transfer basis.
In February last year, Inter RAO signed a memorandum of understanding with the Quang Binh provincial government to finance and build Quang it at a cost of $2.4bn.
RAO has now been removed from the scheme for failing to prepare the project’s cost-benefit analysis on time, say reports.
RAO is a publicly traded company based in Moscow. It had a turnover of $6.5bn in the first six months of the year, from which it made a pre-tax profit of $833m.
Image: A rendering of the completed plant … (PetroVietnam)