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Vietnam power

plant tests Hanoi-

Moscow ties

VIETNAM ON the back of Russia’s February 24 invasion of the sanctions imposed on the back of Russia’s
Ukraine and the subsequent jolt to global energy actions in the Crimea a case of ‘force majeure’.
markets, a yet to be completed power plant in This appeal was ignored by legal agents acting
south Vietnam is threatening to sour relations for Long Phu and the case awaits a decision.
with Moscow dating back to Soviet times. In the most recent efforts to ease the impasse,
Vietnam has, to-date, remained silent on the last December, the project’s financial backers,
invasion and the subsequent sanctions imposed PetroVietnam along with a subsidiary, PetroVi-
by the Biden administration in Washington, etnam Technical Service Joint Stock Corporation
even with the US now ranked as the South East (PTSC) visited Russia to meet representatives of
Asian nation’s third largest trading partner. Rus- Power Machines in Moscow.
sia by comparison does not appear in the top 10. Summarising the meeting, a PTSC official
The site in question, a 1.2 GW coal pow- released a statement saying “(the) freezing of
ered facility at Long Phu in the extreme south the project because Power Machines was on
of the country near Ho Chi Minh should have the US sanctions and embargo list had caused
been completed by 2019, but remains in a state economic damage to both sides, while greatly
of limbo with the Russian firm contracted to affecting Vietnam’s energy security, as well as
complete the job, Power Machines, itself having Vietnam-Russia relations.”
been sanctioned prior to the Ukraine war, as a And just two weeks ago, in a United Nations
result of President Putin’s earlier annexation of vote on censuring Moscow for its actions against
the Crimean Peninsula in 2014. Ukraine, held on March 2nd, Hanoi notably
In the original agreement to develop and abstained. At the time this was attributed to the
build the site, Power Machines was listed as lion’s share of Vietnam’s military hardware being
responsible for progress and overall quality supplied by Russia.
throughout the facility in addition to the coordi- Subsequently, with the project still under-
nation of contractors used, while PetroVietnam going arbitration in Singapore, this week the
took charge of construction and any related influential Vietnamese daily Tuoi Tre carried
domestic issues. an editorial stating that “According to the pro-
All machinery and industrial equipment used ject management board representative, when
at the site was specially purchased from Russia. negotiations continued, the Russia-Ukraine war
At present though, just under 78% of con- occurred, leading to Russia being excluded from
struction work is reported as having been the SWIFT global payment system, so payment
completed, and negotiations with the Russian via banking system(s) is stuck,” adding “In the
government have been ongoing for almost four event that the two parties can agree reimburse-
years, although this has now been further com- ment for Power Machines, it is not even possible
plicated by the latest round of Western sanctions to pay Power Machines.”
on Moscow imposed since late February. As a result, a facility Hanoi believed would
Compounding the issue is the more recent serve as a crucial step in aiding Vietnam’s move
removal of Russia from the global banking pay- away from older, more polluting coal powered
ment system, SWIFT. facilities, while at the same time powering the
Reports from Vietnam in the past week indi- homes of up to four million residents of the
cate that the management of the Long Phu facil- Mekong Delta area south of the nation’s largest
ity are now looking to replace Power Machines city, remains stalled and gathering dust.™
after the Russian engineering firm filed a legal
case for arbitration in Singapore 2019, deeming

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