~ Le Viêt Nam, aujourd'hui. ~
The Vietnam News

[Year 1997]
[Year 1998]
[Year 1999]
[Year 2000]
[Year 2001]

Oxbow reconsiders ill-fated Vietnam power project

HANOI - U.S. firm Oxbow Energy Corp is considering whether it should step back into an ill-fated $360 million Vietnam power project following a new offer from Hanoi.

A source close to the plan to develop the 300 megawatt coal-fired power station said on Wednesday Oxbow was reconsidering the project's ``inactive'' status after the government proposed a new tariff and supplies structure.

``It is the first written tariff position taken by the Vietnamese side that I can remember in four and a half years of project development,'' said the source, who declined to be identified.
``The sponsors are evaluating whether it would be worth the time and expense to take the project out of inactive status.''
Oxbow declined to comment, saying all negotiations would remain private. Officials from Vietnam's industry ministry, which suggested the latest offer, were not immediately available.

Oxbow had won a bid for the plant in 1996, but the landmark 20-year build-operate-transfer project has been stalled, partly due to problems over pricing the electricity and the cost of coal supplies from state monopoly Vinacoal.
Oxbow would have to sell the power to state monopoly Electricity of Vietnam (EVN).

The source close to the project said if Oxbow did agree to reactivate the project, it would have to reconfigure plans in order to come closer to the new Vietnamese offer, which was not substantively different from previous positions.
The official Kinh Te Vietnam & The Gioi reported this week that the government had approved the new offer on April 20.
It said the power would be priced at five cents per kilowatt/hour during the first five years. From year six to year 10, the price would be six cents and for years 11 to 20, it would drop to 4.5 cents per kWh, the magazine said.

The project, in northern Quang Ninh province, was also assured a flat concessionary profits tax of 10 percent for its 20-year life and guaranteed coal supplies at $18 per tonne.
One power industry expert said the new offer appeared to be almost in line with Oxbow's original bid for the project, which had requested five cents per kWh. But he added that by last year Oxbow had revised its demands to around 6.5 cents per kWh.

Sam Korsmoe, managing director of Ho Chi Minh City-based Mekong Research, said Oxbow likely revised its pricing and projections due to a slowdown in power demand growth in northern Vietnam and on expectations of surplus generating capacity.

The Vietnamese dong currency had also depreciated against the dollar by around 20 percent since 1997, and EVN would be reluctant to raise its prices to consumers, Korsmoe said.

Reuters - April 28, 1999.