Construction delays and a postponed return of $10 million to provincial authorities have raised concerns over Malaysian investor Jaks Resources’ finances and ability to realise the Hai Duong thermal power plant project.
Only five foreign-backed BOT projects have been licensed in Vietnam to date Photo: Le Toan
Nguyen Duong Thai, Deputy Chairman of Hai Duong People’s Committee told VIR that Jaks Resources had not yet responded to the province’s request two weeks ago that it repay a $10 million advance from the state budget for site clearance.
In 2011 Hai Duong People’s Committee advanced the sum for clearing the land slated for the thermal power plant after receiving permission from the Ministry of Finance which hoped the money would push forward the project’s construction.
Jaks’ delay in responding to the committee has made the authority suspicious of the firm’s financial capability.
“We are tired of this,” said Thai, adding that the committee has actually requested the advance be repaid several times, to no avail.
“I am not certain of the investors’ ability, as this is a build-operate-transfer (BOT) project and therefore falls under the purview of the Ministry of Industry and Trade (MoIT). But in my opinion, they lack the financial muscle,” Thai added.
A source from the MoIT who was familiar with the case did reveal that Jaks was facing financial problems in construction of the power project. He declined to reveal additional information.
Jaks Resources received its investment certificate for the project in August 2011 under the BOT model from the MoIT. The estimated cost was $2.25 billion with 80 per cent of financing sourced through loans and the other 20 per cent by equity.
Two years later, however, the project is in stasis as Jaks is still searching for a partner to raise the needed financing.
In 2012 the Malaysian firm entered into an agreement with Malaysian Island Circle Investment Holdings and China’s Meiya Power Limited to sell 50 per cent of its stake in the project.
Unfortunately for the company, last December both Island Circle and Meiya pulled out of the agreement, forcing Jaks to sign with two new partners, Malaysia’s Sanjung Merpati Sdn Bhd and China’s Wuhan Kaidi Electric Power Engineering Company. Jaks also gave the engineering, procurement and construction (EPC) contract to Wuhan.
The project again faced troubles in April as Sanjung Merpati terminated the agreement leaving Wuhan Kaidi as the only other investor in the Hai Duong power complex.
In a document sent to Malaysia’s stock exchange on October 30, Jaks announced that its transaction with the Chinese investor was still in progress, and that they hoped to complete it by March 31, 2014. Jaks Resources, at the same time, informed local authorities that it would start construction in December this year.
“A promise is just words and we want action,” said Thai. He added that he doubted the company’s timeline as they have regularly failed to meet their announced schedules.
By Linh Thu
Đăng ký: VietNam News