Socialist Republic of Vietnam

(THE SAIGON TIMES DAILY June 3, 1999) The Government has approved the second-phase of a major water project in HCMC under the build-operate-transfer (BOT) form, following a request by the Ministry of Planning and Investment and the city authorities.

Grand Imperial Saigon Water Company Ltd., an alliance by four companies from Malaysia, the U.K. and Hong Kong, plans to exploit water from the Saigon River.

Experts say more than US(USDollar) 149 million will be needed for the project to build a water plant with a daily capacity of 300,000 cubic meters in Tan Hiep in Hoc Mon District, a pumping station on the western bank of the river in Hoa Phu in Cu Chi District, a 9.5 kilometer pipeline for untreated water and an 11 kilometer pipeline for treated water.

The investor of the 25-year project plans an initial water price of US(USDollar) 0.336/cu.m, to be increased about 2.9% annually to reach US(USDollar) 0.41/cu.m in the eighth year. The price will be reduced to the original level in the ninth year and will then be raised again about 2.9% annually for the rest of the project's licensed duration.

The plant is expected to start supplying water in 2002.

Officials say the Ministry of Planning and Investment will license the venture soon and that a BOT contract will be signed between the investors and the city government so that construction can start late this year or early 2000.

The authorities are considering giving a longer duration to the venture to enable a low water price to be charged in the first five to 10 years.

The Government Office views the project as important as it will be able to ensure sufficient water for the city in the next century.

M-Power from the U.S. has been chosen to conduct a feasibility study for the project's first phase, also under BOT terms.

Which company will be in charge of this phase remains unknown, but the city Service of Communications and Public Works say the selection of a U.S. firm is a possibility.