The recent revival of Thai Binh 2 Thermal Power Plant, Ninh Binh Fertilizer Plant, Dinh Vu Fiber Plant... shows that it is possible to stop waste in trillion-dollar mega-projects that have been "shelved" for many years.
Bach Mai Hospital, branch 2 (Phu Ly city, Ha Nam) has not been completed yet, but the Prime Minister has directed that it must be completed and put into operation within the next 6 months - Photo: NAM TRAN
There are still many projects worth thousands of billions of VND such as Long Phu Thermal Power Plant, Thai Nguyen Iron and Steel Phase 2, Bach Mai Hospital Facility 2, Viet Duc Hospital Facility 2...
The waste of investment budget in "shelved" projects is too obvious, causing pain to the whole society, but to revive these big projects, to remove the wasteful "bunkers" requires strong, breakthrough solutions, even accepting the risks of those directly implementing the projects. Where can we learn from experience?
Mr. Nguyen Thanh Huong
From a series of violations to on-time power generation
Up to now, Thai Binh 2 Thermal Power Plant with a capacity of 1,200 MW, total adjusted investment capital of nearly 42,000 billion VND has been operating effectively for more than a year. On average, the plant produces about 7.2 billion kWh of commercial electricity each year, contributing to meeting the electricity demand of the whole country.
But just 5 years ago, in 2019, the Thai Binh 2 Thermal Power Plant project was still "sinking" in difficulties, with an unknown completion date. During more than 12 years of project construction (2011 - 2023), this project has had a series of violations. Auditing, inspection and investigation agencies have stepped in to clarify the violations at the project. Since then, a series of project management board officials and officials of the Vietnam National Oil and Gas Group (PVN) - the project investor - have been prosecuted, detained and investigated.
However, the project finally reached the finish line, generating commercial electricity in 2023, to the surprise of many people. A PVN leader shared that this will be one of the typical projects in overcoming difficulties, overcoming all obstacles to reach the finish line on time to prevent the waste of billions of dollars of the country's assets. Experience from this project will be included in the upcoming 14th Congress report to draw lessons for fighting waste.
Speaking to Tuoi Tre, Mr. Nguyen Thanh Huong, in charge of the Risk Management Board (PVN), former head of the Thai Binh 2 Oil and Gas Power Project Management Board - the unit directly managing the Thai Binh 2 Thermal Power Project, phase 2013 - 2021, said that thanks to the direction of the Government, the Prime Minister, leaders of ministries, branches, localities and PVN, with the belief that the project would be resolved to complete, the project has reached the finish line. Notably, in 2018, the Central Working Group No. 2 led by the Minister of Public Security still required the investor to be determined to complete the project early.
Bach Mai Hospital, branch 2 (Phu Ly city, Ha Nam) has not been completed yet, but the Prime Minister has directed that it must be completed and put into operation within the next 6 months - Photo: NAM TRAN
How are the knots untied?
Regarding capital for the Thai Binh 2 Thermal Power Project, PVN did not encounter any difficulties, but immediately after signing the EPC contract (engineering - equipment supply - construction) in 2011, the investor PVN made an initial advance payment of VND 1,115 billion to PVC, but this general contractor used the money for the wrong purpose, so the police agency investigated the project.
Mr. Huong recounted that in March 2013, when he became the head of the project management board, in October 2013, he proposed to adjust the Thai Binh 2 Thermal Power Project to suit the investment reality, because if the project was not adjusted, the contractors would not construct it. It was not until December 2014 that the investor PVN officially proposed to adjust the Thai Binh 2 Thermal Power Project. After that, the ministries and branches established specialized groups to give their opinions and then submit them to the Government.
And in January 2016, the Government leaders agreed in principle to adjust the project, then PVN officially approved the adjustment of the Thai Binh 2 Thermal Power project in the direction of increasing the total investment capital to match the actual construction.
And to ensure the project continued to be implemented, during the time the police investigated, in 2014 the Thai Binh 2 Oil and Gas Power Project Management Board still proposed to make a second advance payment of about 800 billion VND for subcontractors to construct the project's foundation. At that time, many leaders of the group objected, but the project management board committed that the second advance payment would be used for the right purpose.
Mr. Huong said: If we do not make the second advance payment, we will not have money to build piles and factory foundations. Equipment imported to the factory cannot be installed or preserved, which will be costly and reduce the quality of the equipment. Only when we have piles and factory foundations can we install steel structures and factory equipment and avoid damage.
Regarding the capital bottleneck for Thai Binh 2 Thermal Power Plant when banks stopped providing capital, the project management board reported to the investor PVN to propose to the Government to allow the group to use its own capital to pay both principal and interest on the project, and at the same time self-finance the project. This plan was later approved by the Government and this increased the efficiency of the project.
Retain general contractor, re-evaluate subcontractors
A PVN leader shared that according to regulations, if the general contractor for the project is weak in capacity, it should be replaced, and then the competent authority should also propose to replace the general contractor for the Thai Binh 2 Thermal Power Project. However, the Thai Binh 2 Oil and Gas Power Project Management Board, based on the project's reality, proposed not to replace the PVC general contractor with another general contractor.
The reason is that the PVC general contractor has signed contracts with about 200 domestic and foreign subcontractors to undertake the project, from providing equipment, materials, to consulting. The project management board also sees that if the PVC general contractor is "fired", hundreds of PVC contracts signed with subcontractors will generate lawsuits, and settling the volume of work done by subcontractors will also be very difficult.
Furthermore, if a new EPC general contractor is chosen to replace PVC for the Thai Binh 2 Thermal Power Project, the new general contractor will not be responsible for the quality of the completed factory items, the construction time will be extended by about 2 years, the factory investment cost will increase by more than 300 million USD and the new general contractor will not be responsible for the quality.
Therefore, the solution proposed by the project management board is to continue to keep PVC as the EPC general contractor of the project, but for weak subcontractors that do not ensure capacity, the project management board will cut the subcontractor's work to organize a bidding to select another unit to perform at a lower cost than the original. Many re-bid packages have reduced costs by 30-40%, Mr. Huong said.
Error in "estimating" bid value
The Government's inspection delegation at the Thai Binh 2 Thermal Power Project in September 2021 - Photo: VGP
Regarding the violations at the Thai Binh 2 Thermal Power Plant project, Mr. Huong shared that in 2011, PVN appointed the contractor, assigning the Vietnam Oil and Gas Construction Corporation (PVC), now renamed the Vietnam Oil and Gas Construction Joint Stock Corporation (Petrocons), as the EPC general contractor for the Thai Binh 2 Thermal Power Plant project, which was the first violation that led to other consequences. At that time, PVC did not have the capacity to do the project but was still appointed as the contractor.
The approval of the EPC (engineering - procurement - construction) package value of the Thai Binh 2 Thermal Power Project at 1.2 billion USD at that time also had no clear basis. The investor only based on the total investment of the equivalent project, Vung Ang Thermal Power with 1.17 billion USD, to approve the Thai Binh 2 Thermal Power Project, which was not enough. However, because PVN appointed PVC as the EPC general contractor of the project, it could not be set too high compared to projects with similar power generation capacity as Vung Ang Thermal Power. This led to many problems in the process of adjusting the total investment capital of Thai Binh 2 Thermal Power later.
In 2016, Mr. Trinh Xuan Thanh used a blue-plate car in violation of regulations in Hau Giang, and immediately those working at PVC were affected. In early 2017, a number of former PVN leaders were prosecuted and arrested, and banks simultaneously stopped funding the project as committed. In 2019, the Government Inspectorate conducted a comprehensive inspection of the Thai Binh 2 Thermal Power Project. In October 2020, the Government Inspectorate issued a clear conclusion on the rights and wrongs in the project implementation.
Source: https://tuoitre.vn/ca-thoat-hiem-cua-nhiet-dien-thai-binh-2-20241121083033068.htm
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