No need to wait for ODA, Da Nang firm says
No need to wait for ODA, Da Nang firm says
The main water supply company in Da Nang City, Dawaco, has proposed that it raises funds on its own to build the Hoa Lien Water Plant rather instead of using non-refundable Official Development Assistance (ODA) funds from Japan.
The proposal was made by the company’s general director, Ho Huong, in a meeting with the city’s leadership this month.
Huong said the company’s water plants with a total capacity of 210,000 cubic metres each day have been overworked in summer when it exceeded designed capacity to supply 260,000 cubic metres a day.
He said the company will have to supply 660,000 cubic metres each day in 2025, and needs an early start to be able to do that.
Using ODA funds would mean that the Hoa Lien Water Supply Plant can only begin operations by 2022, given the complicated procedures, management and operations associated with such funding.
“We can raise funds ourselves fund for the first stage of the Hoa Lien water plant in the fourth quarter of 2017 and begin operations in late 2019, providing an additional 120,000 cubic metres of clean water each day,” Huong said.
“The Hoa Lien Water plant would use VND4.8 trillion (US$212.3 million) for a 20-year construction and operation period, but we can reduce investment capital by using our funds with build the plant faster,” he said.
While the ODA funding would be for a PPP (public-private partnership) project, Dawaco can raise funds from shareholders because it is a joint-stock company.
Huynh Duc Tho, Chairman of the Da Nang People’s Committee, said the city will review Dawaco’s proposal soon.
Tho asked the company to prepare a fundraising plan with a strict construction schedule. The city will decide the best way of investing later, he said.
This is the second project in Da Nang that the investor has spurned ODA funds. The Da Nang Port Company raised funds from shareholders instead of using ODA from Japan.
Da Nang authorities have said the city is set to face a water crisis in the coming years as water exploitation has equaled existing designed capacity with 200,000 cubic metres taken from the Vu Gia River.
Meanwhile, the Cau Do water station, the city’s major supplier, is struggling often with highly saline water due to a lack of supply from the upstream rivers during the dry season.
The city had called for Public-Private-Parnership (PPP) investment projects in waste water treatment and clean water supply and it seeks to become a ‘green’ city.
It has estimated project costs at VND6 trillion (US$267 million), of which $218 million would be used for urban infrastructure, to reach the ‘green’ target (an environmentally friendly city) by 2025.
In 2015, the city had listed 19 projects calling for investments of VND16.5 trillion (US$768 million) under the Public-Private-Partnership (PPP) model.
The same year, it presented a US$115-million budget proposal for upgrading waste water treatment stations, waste water drainage systems and drainage channels in the city. The World Bank had agreed to loan US$100 million for this project.
