EVN likely to take over Phu My power plants as BOT contracts end

The Ministry of Industry and Trade has proposed the Prime Minister to award Vietnam Electricity (EVN) the Phu My 2.2 and Phu My 3 thermal power plants, following the termination of their 20-year build-operate-transfer contracts.

The ministry (MoIT) also proposed for the corporation to prepare human resources and related expenditures to take over both plants.

The two projects were developed in the southern province of Ba Ria-Vung Tau by numerous foreign investors. Their BOT contracts were signed between the MoIT and investors, allowing the latter to run the plants for 20 years. Once the contracts expire, they will be handed to the Vietnamese government without reimbursement.

In particular, the 716.8 MW Phu My 3 was developed by a consortium of BP Holding BV, Singapore’s state-run SembCorp and Japan-based Kyushu Electric Power and Sojitz, with a total investment of $385 million. The plant began commercial operation in March 2004, and was the first foreign-built BOT to burn Petrovietnam gas.

Meanwhile, the 715 MW Phu My 2.2 was invested by Electricite de France International (EDFI), Sumitomo, and Tokyo Electric Power Company (TEPCO), totaling $407.1 million. It began operations in February 2005, overseen by Mekong Energy Company, Vietnam’s first independent power producer, established by EDFI.

The BOT contracts of Phu My 3 and Phu My 2.2 will expire on March 1, 2024 and February 4, 2025, respectively.

Previously, both EVN and Petrovietnam had sought to take over the two plants.

Petrovietnam asserted that it could ensure that both plants function at full capacity while supplying raw materials at competitive prices. The state-owned oil and gas group also has experience in operating four gas-fired power plants in southern Vietnam, namely Nhon Trach 1 and 2, and Ca Mau 1 and 2, with a total capacity of 2,700 MW.

However, as Petrovietnam currently does not directly manage any thermal power plants and its subsidiary PV Power, the four power plants’ operator, has been equitized, it is impossible to allocate the plants to the joint stock company, the MoIT noted in a report submitted to the PM.

Meanwhile, EVN has 30 years of expertise managing power plants, with 35 facilities and 97,000 employees, as well as financial capability. It has also run comparable gas-fired plants and collaborated with the MoIT in the bidding and negotiating of BOT contracts for both projects.

In addition, EVN and the foreign investors have established a joint coordination board to collaborate on operational and maintenance activities. As a result, the state-owned power group has comprehensive information and extensive records on the plants’ status and quality, the ministry argued.

The proposal is in line with the government's decree on the transfer of power works as public assets to EVN.

The Phu My 3 and Phu My 2.2 are part of the Phu My power complex, Vietnam's largest group of power production facilities. The complex also consists of the Phu My 1, 2-1, and 4 plants.