Power transmission projects slow because capital short

As many power grid projects are behind schedule, experts have warned that transmission capability will not be able to meet demand.

Transmission capability needs to be improved in order to meet the transmission demand, as the power generation capacity will increase by 3,000-4,000MW per annum. The Ministry of Industry and Trade has warned about the imbalance between the power generation and power transmission capacities.

The north power transmission project, using official development assistance (ODA) from ADB ($360mil), which is under implementation, includes eight sub-projects. Meanwhile, most of the sub-projects are behind schedule.

The National Power Transmission Corporation NPT has confirmed that three of the most important sub-projects, which use the majority of the loan, will not be completed on schedule, to be able to transmit power before the end of 2010, the time the loan matures. The three subprojects are DZ 500KV Son La – Hiep Hoa, TBA 500KV Hiep Hoa and DZ 500 KV Quang Ninh – Mong Duong.

A lot of reasons have been cited to explain the tardiness in the implementation of the projects, including problems in site clearance. Moreover, the high inflation in 2008 led to higher material prices, which forced contractors to adjust bidding packages and estimates. The actual expenses of the eight subprojects have increased by $45.21mil from the initial estimates.

The Ministry of Industry and Trade said that the power grid projects need to go in accordance with the expansion of power generation plants. In general, the transmission capacity needs to be 10-20% higher than the capacity of generation sources.

The ministry has warned about the serious shortage of capital for projects. Many power transmission projects which are planned to be put into operation in 2010-2012 still cannot arrange capital.

The total capital Vietnam needs for the power grid projects by 2015 is estimated at $8.7bil, or VND148tril. Meanwhile, NPT’s capital is just VND25-30tril, or 16-20% of the capital needed.

According to NPT, the Asian Development Bank has approved the overestimate of $45.21mil.

Pham Huyen

vietnamnet

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