VietNamNet Bridge - Five projects all funded by the state - the Dinh Vu fiber plant, Dung Quat ethanol plant, the expanded Thai Nguyen steel mill, Phuong Nam Pulp and Ninh Binh Fertilizer – have incurred huge losses. 

Minister of Industry and Trade Tran Tuan Anh, answering National Assembly Deputies’ questions about the fate of multi-billion dong projects, said the changing world market had badly affected investment efficiency.

Dinh Vu losses

The $325 million Dinh Vu Fiber Plant, of which PetroVietnam holds more than a 75 percent stake, has faced a lack of sales since 2014, when it became operational.
 

Five projects all funded by the state - the Dinh Vu fiber plant, Dung Quat ethanol plant, the expanded Thai Nguyen steel mill, Phuong Nam Pulp and Ninh Binh Fertilizer – have incurred huge losses.

The plant took a huge loss of VND1.085 trillion after seven months of operation, because revenue was not high enough to cover basic expenses. Meanwhile,  government inspectors discovered problems during project implementation, from the miscalculation of expenses to the use of outdated machines & equipment.

Dung Quat Ethanol left idle

Under current regulations, the investor of Dung Quat Ethanol Plant had to choose EPC contractors through bidding, because the project was developed with 30 percent of total capital from the State. However, PetroVietnam did not do this.

Though the construction has completed, the plant still cannot be put into commercial operation. The real investment capital of the project has reached VND2.124 trillion, or VND631 billion (42 percent) higher than initially planned. This has led to higher depreciation level and capital cost, thus pushing up production costs.

Thai Nguyen steel mill remains ‘heap of rusty iron’

In July 2007, a contract was signed under which Chinese MCC Group was chosen as the EPC contractor for the expanded Thai Nguyen steel mill project.

Five years later, when the project met financial problems, MCC left Vietnam though did not hand over important items to the investor. To date, the plant remains a ‘heap of rusty iron’.

Pulp plant with accounts payable of VND2.651 trillion

Tracodi, the initial investor of the Phuong Nam Pulp Plant, had its feasibility study approved by the local authorities in October 2003. However, the project still had not been fulfilled by November 2007, even though investment capital was raised from VND1.487 trillion to VND2.286 trillion.

Later, Vinapaco, which took over the project, could not put the production line into a test run because it got stuck.

Ninh Binh Fertilizer incurs loss of VND2 trillion after 4 years

It was expected that after construction was completed in mid-2011, the plant would churn out 1,760 tons of urea a day. However, not until on March 30, 2012 did Ninh Binh produce the first ton of urea.

In 2015 alone, the plant took a loss of VND370 billion.


Thanh Lic