VietNamNet Bridge – The Mekong Delta City of Can Tho’s authorities have demanded that the much-delayed Can Tho oil refinery developer meet its obligations to pay a deposit of VND11 billion ($523,000) to prove its financial ability and adherence to its construction schedule.

The delayed Can Tho oil refinery was once hoped to quickly help Vietnam satisfy the domestic demand for petrol.

Deputy director of the Can Tho Municipal Department of Planning and Investment Bui Ngoc Vy said that if the Can Tho Refinery Joint Venture failed to respond, its investment certificate would be revoked.

According to another unnamed source, last year the joint venture was requested by the local authorities to submit a deposit of VND210 billion ($10 million) – equivalent to three per cent of the total investment capital of the project.

However, the joint venture denied the request. It claimed that the figure was too large, and proposed to submit VND7 billion ($333,000) – equal to 3 per cent of the requested deposit, which would cover land clearance and compensation.

The local authorities recently adjusted this sum to VND11 billion ($523,000) in conjunction with the threat to withdraw the investment certificate.

The Can Tho refinery project is now six years behind schedule and has been blamed for disrupting local lives and portraying a negative image of the city’s investment climate.

The project was originally instigated back in 2004 by Vien Dong Company. In May 2008, the company received an investment certificate to build a two-million tonne/ $538 million crude oil refinery on 250 hectares in Phuoc Thoi ward, O Mon district.

After that, a joint venture between the locally-owned Vien Dong Company and the US-backed Semtech Limited was formed, with Vien Dong holding 30 per cent of the investment.

However, in 2009 the foreign partner withdrew from the project due to financial difficulties and Vien Dong proposed to scale down investment to $350 million covering just 50ha. In June 2010, Vien Dong announced that the firm had chosen Taiwan’s Crystal Future Incorporated to replace the US partner.

Crystal Future Incorporated then withdrew from the project in October 2010, claiming that it wanted to be given cleared land by the local authorities before participating in the project, while the local authorities maintained that the two partners needed to complete paperwork on the new joint venture first.

The project remained at a standstill until Can Tho Refinery Joint Venture Company general manager Nguyen Van Duc said he had found a new partner, Mekong Petrochemical Company, to join the project in 2012.

 Source: VIR