VietNamNet Bridge – Using Chinese production line and equipment, a fertilizer plant of the Ninh Binh Nitrate Company has been taking losses, while eight northern provinces periodically suffer outages because of Chinese transformers.

The fertilizer company, a subsidiary of the Vietnam Chemicals Corporation (Vinachem), has never made profit since it became operational some years ago.

The $700 million fertilizer plant took a loss of VND75 billion in 2012, then VND759 billion in 2013 and VND237 billion in the first six months of the year. The total  loss has reached VND1.071 trillion so far.

Local media quoted Nguyen Gia Tuong, General Director of Vinachem, as saying that the machines and equipment used by the plant are mostly from China, which have mediocre quality and often break down.

With the Chinese technology, the fertilizer plant has to spend VND42 billion more a year to buy 3C coal dust for use instead of 4A coal.

Tuong said the higher costs (compared to initial estimates) on machine depreciation, loan interests and coal prices all have pushed production costs up to levels much higher than other domestic plants.

In May 2013, two 900 MVA transformers of the Hiep Hoa transformer station in Bac Giang province broke down just within one week. The Electricity of Vietnam (EVN) then had to disconnect the two transformers from the national grid, thus leading to outage in eight provinces in the north.

The common feature of the two transformers was that both of them are made-in-China products, while the problems occurred right after the warranty expired.

Experts commented that this was the first time Vietnam suffered such serious consecutive incidents at a strategic transformation station like Hiep Hoa.

Local newspapers reported that the Chinese contractor in late May sent six specialists, including a deputy CEO of Xian XD Transformer, the transformer manufacturer, to Vietnam to analyze the incidents. However, they left without finding the causes.

The Hiep Hoa transformation station has the duty of providing electricity to the northeastern part of the country and ensuring the power supply for socio-economic, security and national defence.

The public has once again spearheaded the fingerpointing at EVN for choosing Chinese contractors and using Chinese equipments.

The representative of EVN said that involved parties strictly followed all the legal and technical procedures when developing the projects, and that no big problem occurred during the construction and installation of the transformation station.

However, more and more experts have raised their voice against the use of Chinese technologies and China-made equipment for important infrastructure projects because of their low quality.

In fact, the Hiep Hoa transformation station was not the only project where Chinese implemented as EPC (engineering, procurement, construction) contractors.

According to Nguyen Van Thu, Chair of VAMI, the association of mechanical engineering enterprises, Chinese were the EPC contractors of five out of six chemical plant projects developed from 2003 to now, 49 out of 62 cement projects and 16 out of 27 thermal power plant projects. Most of these have low quality with problems occurring often.

Dat Viet