Due to deadlock over Covid-19 pandemic, many projects of power source behind schedule

Long Phu 1 thermal power project was one of projects that were behind schedule. Photo: Nguyễn Thanh

They include projects invested by the Vietnam Oil and Gas Group - Petrolvietnam (PVN) such as Long Phu 1 Thermal Power Plant, Thai Binh 2 Thermal Power Plant and Song Hau 1 Thermal Power Plant.

With the Long Phu 1 thermal power project, the project has so far reached 77.56% and this progress has not changed since March 2019.

The project has not been determined to make feasible progress yet because the contractor of Power Machines (PM-Russia) did not continue to perform engineering procurement and construction (EPC) because it could not solve difficulties and obstacles due to the impact of embargo.

"Power Machines' proposals to PVN for considering to restructuring plans, increase price and many other electricity ... were inappropriate with the provisions of the EPC or terminating the implementation of the EPC contract," the National Steering Committee on electricity development stated.

PVN is coordinating with the Ministry of Industry and Trade and reporting on establishing the Government Working Group to support negotiation of the project’s deployment plan, with the participation of Power Machines contractor.

For Thai Binh 2 Thermal Power Project, overall progress is 85.07%. The schedule for commercial operation of unit 1 is expected in February 2022 and unit 2 May 2022.

For Song Hau 1 Thermal Power Project, according to the revised Power Plan VII, the operation schedule of this project was 2019. However, to now, this project has basically completed the design and procurement activities. The total progress of the project exceeds 84%.

Besides that, thermal power projects invested in the form of BOT (Build-Operate-Transfer) have also been affected by the Covid-19 pandemic.

That are Hai Duong thermal power project which was not allowed to have foreign labourers enter the country; Duyen Hai 2 project generated a non-governmental force majeure event due to the outbreak of the pandemic; Nghi Son 2 project was also affected by the pandemic; and Van Phong 1 project was similar.

Investment projects in the form of independent power project (IPP) are also behind schedule due to many objective and subjective reasons, such as being unable to financial arrangements (An Khanh Bac Giang and Cong Thanh Thermal Power) and risk of no connecting lines (Pacma hydropower cluster and Nam Cu 4).

Notably, Hoi Xuan hydropower project has changed its actual parameters almost completely compared to the parameters stated in the power purchase contract on May 17, 2020. The total investment of the project increased, so the electricity price must be re-negotiated.

At a consultation workshop for the Power Plan VIII in Hanoi recently, Deputy Minister of Industry and Trade Hoang Quoc Vuong said many power source projects in the revised Power Plan VII have not reached the progress, causing a serious impact on future electricity supply.

"Vietnam is facing difficulties from now to 2025, if there are no other urgent solutions, we will have a serious shortage of electricity, affecting socio-economic development," he stressed.

Talking with Customs News reporter, expert Nguyen Manh Hien, former Director of the Institute of Energy (Ministry of Industry and Trade) said that from Power Plan VI onwards, the Government assigned energy corporation groups to supply the source of electricity that was not feasible.

For example, Vietnam Oil and Gas Group (PVN) could only use gas for electricity, but it was also allowed to use coal for making electricity in the plan.

Previously, only EVN made electricity, later, they wanted to reduce the burden on the electricity industry, so corporations like PVN and TKV also participated in investing in electricity. The assignment for making electricity source as a "backhand" caused high investment costs and progress was behind schedule.

The Government should not assign power projects to corporations which were not their strength. For example, any corporation in gas should only focus on gas for producing electricity; in the field of coal, they should only focus on coal.

"Besides that, the key point was the supervision during the implementation. For example, the Ministry of Industry and Trade must have an ‘iron hand’ to investigate, check, urge and closely supervise or establish an executive board. They must do it drastically to make it clear how the progress of the power source project of the corporation is. If any project is behind schedule, it must have proper handling mechanisms and penalties,” Hien emphasised.