22 June, 2021

Bad Business

Prime Minister Rao's investment offer falls through due to India's inability to generate finances for the promised projects

Bad Business
When Prime Minister Nara-simha Rao dropped by at Hanoi in September 1994, he won over the Vietnamese by offering to build a power plantand a fertiliser factory in Vietnam at a combined cost of about $400 million. His hosts were overjoyed that the strong political links with India would, at last, translate into durable economic relations.

Hanoi's euphoria was shortlived as the promised 210 MW gas-based power generation plant did not see the light of day. Indian Ambassador to Vietnam, S.L. Malik, says that despite a visit to Vietnam last year by officials of two Indian public sector org-anisations, BHEL and the Central Electricity Authority, the Indian side could not come up with a financial package to build the power plant, estimated at $200 million.

Eager to rebuild its war-ravaged infrastructure, Vietnam threw open the power project in Phu My to international bidders. It is currently being built with Japanese Official Development Assistance and by a group of foreign companies including theAustralian energy firm, Broken Hill Propriety (BHP).


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