The construction site of Kien Luong Plant, delayed for years due to ITACO's failure to negotiate power-purchase contracts with Electricity of Viet Nam. — VNA/VNS Photo

KIEN GIANG (Biz Hub)— Tan Tao Investment and Industry Corporation (ITACO) has received approval from the Ministry of Industry and Trade to transfer its huge thermal power project in Kien Giang Province from a build-own-operate model to a build-operate-transfer project, a move that will help the company get the Government to guarantee the project.

By December 31, if the company failed to change the business model, the ministry would consider choosing other investors, Kien Giang People's Committee Vice Chairman Pham Vu Hong said on the provincial website.

Construction of the US$6.7 billion Kien Luong plant had been delayed for years due to ITACO's failure to negotiate power-purchase contracts with Electricity of Viet Nam (EVN) and lack of capital, Hong said.

ITACO had once petitioned for a Government guarantee for the project, but failed as the project was being developed under a build-own-operate model, he said.

ITACO General Director Nguyen Tuan Minh said the company would continue to implement the project after transforming its form to a build-operate-transfer model.

Currently, the company was negotiating with partners about the project's eligibility and its cost as well, he said, adding that when finished, the company would submit the plan to the ministry and then re-negotiate with EVN.

Construction of the US$6.7 billion Kien Luong plant had been delayed for years due to ITACO's failure to negotiate power-purchase contracts with Electricity of Viet Nam (EVN) and lack of capital, Hong said.— Photo baocongthụong

In August 2008, the Prime Minister approved the three-stage project, which includes a 4,400 – 5,200MW thermal power plant and the Nam Du Deep Seaport on An Son Island, 60km from the plant.

ITACO, a subsidiary of Tan Tao Group, is licensed to invest $6.7 billion in the Kien Luong Thermal Power project.

According to the licence granted to ITACO, construction of the first stage of the project, with an output of 1,200MW, is scheduled for completion by the end of this year.

ITACO filled 88ha of the site, built an 8km embankment and paid compensation to families who were forced to relocate.

But construction of the project was suspended in August 2010, and no further work was undertaken because ITACO failed to seek funds for the project.

In late April, the provincial People's Committee warned that it would halt the project if ITACO failed to arrange capital for investment in the plant before June 30. — VNS