Illustrative image.—VNS File Photo

HA NOI (Biz Hub)— Japan's Sumitomo Group has fast-tracked negotiations on a build-operate-transfer (BOT) contract for the Van Phong coal-fired power plant, and an agreement on the project is expected to be made with the Ministry of Industry and Trade in the first quarter of next year.

Once the BOT is signed, an investment licence should be approved in the second quarter of 2014, with construction work scheduled to start in August 2015 and the plant's opening set for October 2019.

The project was initially proposed in 2006 and has a planned capacity of 2,640MW. The plant will be located in the Van Phong Economic Zone in central coastal Khanh Hoa Province's Ninh Hoa Town.

Covering an area of more than 350 ha, the project would cost more than US$2 billion.

Nguyen Chien Thang, chairman of the provincial People's Committee told the Vietnam Investment Review that work was delayed due to issues related to the land hire contract with the province and negotiations for an agreement on how much Electricity of Viet Nam (EVN) will pay for the power supplies.

Thang said the province committed to ensuring a favourable land hire contract for the project's investors. However, the Japanese group was asked to provide a specific timetable on the completion of the project to help avoiding delays.

The province has spent about VND150 billion ($7.2 million) on land compensation and site clearance for the project since 2010.

The plant would supply power to EVN, using coal imported from Australia and other countries.

The BOT power plant would comprise two 660 MW boiler turbine generator units.

Once licensed, the plant would be the second Sumitomo-invested power project in Viet Nam, following the Phu My 2.2 power plant in southern Ba Ria-Vung Tau province, which was jointly built by Sumitomo, Japan's TEPCO Company and French firm EDF Energy. — VNS