VND100-billion water plant close to bankruptcy
By Van Nam - The Saigon Times Daily
HCMC – Dang Doan Nguyen Joint Stock Company has proposed the HCMC government to buy its Can Gio brackish water plant which at an investment cost of around VND100 billion is on the verge of bankruptcy.
|The Can Gio brackish water plant of Dang Doan Nguyen Co. is on the verge of bankruptcy after four years of operation with losses of nearly VND80 billion - Photo: Van Nam |
Speaking to the Daily on Monday, board chairwoman Nguyen Thi Dong Dao said that the firm had suffered losses of nearly VND80 billion since operating the plant in 2008 due to low water demand in Can Gio and the surging operating cost.
According to Dao, when going into operation in August, 2008, the plant had a filtering capacity of 5,000 cubic meters per day. However, after four years of operation, the increasing salinity of water in the Long Tau River has pushed up operation costs although the firm has set side an additional VND15 billion to buy salinity devices, and thus the plant has to reduce the capacity to around 4,000 cubic meters.
“The plant was at first designed to treat water having a salinity of around 3,000 ppm, but the salinity has now amounted to 12,000-13,000 ppm, and we therefore have to reduce its filtering capacity. Besides, the interest rate stayed at only 14% per year in 2007 but has increased to 23% over the past times,” Dao said.
Another reason for the firm’s losses is that Can Gio Public Services Co. does not buy all water treated by the plant. There are days when Can Gio Co. buys only 2,000 cubic meters of water as it has been supplied with 40,000 cubic meters since April last year through the Nha Be-Can Gio water pipeline of Saigon Water Corporation (Sawaco), according to Dao.
In a report of the HCMC Department of Transport sent to the HCMC government in June, Tran The Ky, deputy director of the department, said that the water demand of Can Gio District was around 7,000-10,000 cubic meters per day.
The current water price of the Can Gio plant is some VND18.500 per cubic meters.
According to Dao, the underlying reason for the failure of the plant is the inconsistent and unclear water supply planning for Can Gio District.
Specifically, the firm has planned to increase the treatment capacity from 5,000 to 20,000 cubic meters per day in 2017. However, after the water pipeline of Sawaco was put into operation, Can Gio Co. did not buy all water of the plant as agreed with Dang Doan Nguyen Co. at the beginning.