Thu Duc Water Project

cancelled

Lyonnaise Vietnam Water Company Ltd. was awarded a 25-year concession agreement by the People's Committee of Ho Chi Minh City to develop, construct, own and operate a water treatment plant with a daily capacity of 300,000 cubic metres and a 25.2 km transmission pipeline in the Thu Duc district in Ho Chi Minh City. Lyonnaise Vietnam Water Company was owned by ONDEO (the water business of Suez Lyonnaise des Eaux which later changed its name to SUEZ) (70%), Tractebel of Belgium (a subsidiary of SUEZ) (20%), and Pilecon Engineering Bhd of Malaysia (10%). The EPC contractors were Vinci (formerly called Dumez) and Pilecon. The construction period was expected to be 30 months and the facility was to be located next to the existing Thu Duc water plant. Lyonnaise Vietnam Water Supply Company had a take-or-pay contract with the offtaker Ho Chi Minh City Water Supply Co. The license was reportedly valued at over US$100 million when it was granted in 1997. The total project cost was US$154 million and financial closure was achieved in July 2001. The financing was comprised of US$48 million in equity. The total debt amount was US$106 million: US$35 million as direct loan from the ADB, US$48 million financing from Coface and US$15 million loan from the Malaysian Exim. In February of 2003, Suez Lyonnaise and Pilecon withdrew from the half-finished project. The reason behind the continued delay and the subsequent withdrawal of the foreign investors was that the contractor and local partners could not agree on the application of some terms of the contract. In mid-May of 2003, Salcon of Malaysia and MPA Utilities of Singapore proposed becoming involved in the project, but city authorities turned down their proposals, saying that they preferred to choose a Vietnamese company for the project. In November of 2004, a consortium of state-owned Vietnamese companies led by Ho Chi Minh City Infrastructure Investment Joint Stock Company (CII) won the tender to replace the foreign investors and resume construction of the water plant in Ho Chi Minh City’s Thu Duc district. SUEZ's stake was put back to 70. This project's sponsors were incorrectly updated. It was confused with 5305 Thu Duc Water - second contract