VietNamNet Bridge - Electrical engineering companies complain they have to struggle to obtain jobs in Vietnamese-invested projects, even though the government has promised to increase the localization ratios in thermal power projects.

The government decided that by 2020, Vietnam will have to manufacture nearly 100 percent of equipment needed for an electricity transmission and distribution network, 50-60 percent of equipment needed for coal thermal power plants, and 40-50 percent of equipment for nuclear power plants. 

The electrical engineering development plan pointed out that the localization policies would be applied to three thermal power plants first on a trial basis, namely Quynh Lap 1, Song Hau 1 and Quang Trach 1.

Under Prime Minister’s Decision No 1791, Vietnamese enterprises will undertake at least 40 percent of the design and consultancy workload for Quang Trach 1 project, 60 percent for Song Hau 1 and 80 percent for Quynh Lap 1.

Regarding the manufacturing ratio, the figures must not be lower than 50 percent for Quang Trach 1 and Song Hau 1, and must not be lower than 70 percent for Quynh Lap 1.

However, the implementation of the localization policy at the three power plants has not been going smoothly. Domestic engineering companies said they have to struggle to get the right to undertake part of the work.

According to the director of a mechanical engineering company, in April 2015, PetroVietnam, the investor, signed an EPC contract (engineering, procurement, construction) with Lilama, a big construction and installation corporation. 

Right after that, Lilama signed a contract with South Korean Doosan Group on the supply of major equipment, worth $1.6 billion.

The director said he contract accounts for nearly 80 percent of the project value, about VND43 trillion.

Meanwhile, domestic firm Narime obtained a package deal worth VND330 billion. The documents submitted by Narime to the Ministry of Industry and Trade on August 7, 2015 showed that its production unit comprised 25 workers and 13 machine tools, including eight made in the former Soviet Union.

Many companies said that if comparing with Narime’s capacity, they are capable of undertaking the work at thermal power projects.

Nguyen Xuan Cuong, deputy general director of EEMC, a mechanical engineering company in Hanoi, said he does not want any support from the state, while he only wants jobs.

Nguyen Tang Cuong, director of Quang Trung Mechanical Engineering Enterprise, noted that the problems now lie in a weak connection among domestic enterprises and lack of information. 

In order to help domestic enterprises develop, he said Lilama, as the EPC contractor, should have mobilized resources from domestic enterprises. Meanwhile, enterprises only heard about the project when the construction of Song Hau 1 began. 

Hai Dang