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Asian Development Bank Electricity of Vietnam TA 4625-VIE Song Bung 4 Hydropower Project Phase II

Final Report

Main Report

January 2007

ASIAN DEVELOPMENT BANK ELECTRICITY OF VIETNAM

TA 4625-VIE Song Bung 4 Hydropower Project, Phase II

FINAL REPORT
MAIN REPORT
January 2007

Song Bung 4 Hydropower Project, TA No. 4625-VIE Final Report Report Structure

SWECO International

Song Bung 4 Hydropower Project Phase II, TA No. 4625-VIE


Final Report
Report Structure
Main Report Environmental Impact Assessment (EIA) Resettlement and Ethnic Minority Development Plan (REMDP) Volume 1: Cross Cutting Issues Volume 2: Reservoir Resettlement and Development Plan Volume 3: Project (Construction) Lands Resettlement Plan Volume 4: Down/Upstream Mitigation and Resettlement Plan Social Management Plan Gender Action Plan Consultation Report Annex: Social Reports from the Local Consultants

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Final Report- Main Report Table of Content

SWECO International

Song Bung 4 Hydropower Project Phase II, TA No. 4625-VIE Final Report
Main Report

Table of Contents
1 1.1 1.2 1.2.1 1.2.2 1.2.3 1.3 1.3.1 1.3.2 1.3.3 1.3.4 1.3.5 1.3.6 1.4 1.4.1 1.4.2 1.4.3 2 2.1 INTRODUCTION BACKGROUND THE ENERGY SECTOR IN VIETNAM Institutional Background Generation System Energy and Power Demand THE PPTA General Phase I of the PPTA Overall Objective Objective of Draft Final Report Summary of Activities Acknowledgement OVERVIEW OF HYDROPOWER DEVELOPMENT IN VU GIA-THU BON RIVER BASIN General Existing and Hydropower Projects under Construction Planned Hydropower Projects SONG BUNG 4 HYDROPOWER PROJECT GENERAL
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1 1 2 2 2 3 4 4 5 5 6 6 8 8 8 9 10

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2.2 2.2.1 2.2.2 2.2.3 2.2.4 2.2.5 2.2.6 2.2.7 2.2.8 2.2.9 2.2.10 2.2.11 2.2.12 2.2.13 2.3 2.3.1 2.3.2 2.3.3 2.3.4 2.3.5 2.4 2.4.1 2.4.2 2.4.3 2.5 2.5.1 2.5.2 2.5.3 2.6

PROJECT COMPONENTS ACCORDING TO FEASIBILITY STUDY General Reservoir Dam Structure Spillway Intake Headrace Tunnel Surge Tank Penstock Power Station and Switchyard Tailrace Canal Transmission Line Access Roads Relocation of Highway 14 D COMMENTS AND SUGGESTED MODIFICATIONS Estimated Inflow for Song Bung 4 Hydropower Project Technical Issues Minimum Operating Level Compensation Flow Energy Production LIKELY OPERATION REGIME OF SONG BUNG 4 HPP General Seasonal Reservoir Operation Daily Reservoir Operation DOWNSTREAM HYDROLOGICAL REGIME General Changes in the Seasonal Regime Changes in the Daily Regime MULTIPURPOSE ASPECTS

19 19 19 19 20 20 20 20 20 20 21 21 21 21 21 21 23 24 25 25 26 26 27 28 29 29 29 32 34

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2.7 3 3.1 3.1.1 3.1.2 3.2 3.2.1 3.2.2 3.2.3 3.2.4 3.2.5 3.2.5 3.3 3.3.1 3.3.2 3.3.3 3.3.4 3.3.5 3.3.6 3.3.7 3.3.8 3.3.9 3.3.10 3.3.11 3.4 3.4.1 3.4.2 3.4.3 3.4.4

RISKS TECHNICAL REVIEW OF FEASIBILITY STUDY OVERALL LAYOUT General Consideration on the Installed Capacity REVIEW OF GEOLOGICAL & GEOTECHNICAL CONDITIONS Introduction Geological Conditions in the Project Area Considerations on the Design of the Rock Support in Tunnels Considerations Regarding Unit Rates of Underground Works Construction Material Conclusions and Recommendations REVIEW OF DAM STRUCTURE Review of Dam Site and Dam Type Selection Gravity Dam Design Review of Spillway Diversion Arrangements RCC Mix Design Construction Methodology Placement Rates and Plant Capacity RCC Manufacture, Transport and Placement Foundation Treatment Comments on Unit Rates on RCC Arrangements for Dam Safety Monitoring REVIEW OF WATERWAY Intake Headrace Tunnel Surge Tank Penstock
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35 35 35 35 36 37 37 43 46 51 52 54 54 54 56 65 66 67 69 73 75 79 79 80 83 83 83 84 85

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3.5 3.5.1 3.5.2 3.5.3 3.5.4 3.6 3.6.1 3.6.2 3.6.3 3.6.4 3.6.5 3.6.6 3.6.7 3.6.8 3.6.9 3.7 3.7.1 3.7.2 4 4.1 4.2 4.3 4.4 4.5 4.6

REVIEW OF POWER STATION Layout in the Feasibility Study Number of Units Engineering Geological Features Considerations Regarding Location of an Underground Powerhouse REVIEW OF ELECTROMECHANICAL EQUIPMENT Gates Turbines Hydraulic Stability Auxiliary Equipment in the Power Station Single Line Diagram Generators Generator Transformer 220 kV Switchgear Auxiliary Power Systems REVIEW OF TRANSMISSION General Transmission Line TENTATIVE CONSTRUCTION SCHEDULE DAM STRUCTURE AND RIVER DIVERSION WATERWAY POWER STATION AND EQUIPMENT INSTALLATION TRANSMISSION INITIAL FILLING OF SONG BUNG 4 RESERVOIR OVERALL TENTATIVE CONSTRUCTION SCHEDULE
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5 5.1 5.1.1 5.1.2 5.1.3 5.1.4 5.1.5 5.2 5.3 5.4 5.5 5.6 6 6.1 6.1.1 6.1.2 6.1.3 6.2 7 7.1 7.2 7.2.1

TENTATIVE COST ESTIMATE REVIEW OF COST ESTIMATE IN FEASIBILITY STUDY Preparatory Works Civil Works Mechanical and Electrical Works Transmission Engineering and Administration ENVIRONMENTAL MANAGEMENT COSTS RESETTLEMENT AND SOCIAL MITIGATION COSTS IMPLEMENTATION SUPPORT COST STRUCTURING TENTATIVE TOTAL INVESTMENT COST IMPLEMENTATION AND PROCUREMENT PROJECT IMPLEMENTATION Implementation Schedule Implementation Agency Project Implementation PROCUREMENT PLAN ECONOMIC ANALYSIS GENERAL MACROECONOMIC AND SECTOR CONTEXT Macroeconomics
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7.2.2 7.3 7.4 7.4.1 7.4.2 7.4.3 7.4.4 7.4.5 7.5 7.5.1 7.5.2 7.5.3 7.6 7.7 8 8.1 8.2 8.2.1 8.2.2 8.3 8.3.1 8.3.2 8.3.3 8.3.4

Power Sector Issues and Challenges DEMAND ANALYSIS LEAST COST SYSTEM EXPANSION PLAN OF THE VIETNAM POWER SECTOR General Existing Generating System Options for Expansion of the Generation System System Planning Methodology Least-Cost Expansion Generation Plan up to 2025 ECONOMIC VALUATION OF COSTS AND BENEFITS OF SONG BUNG 4 HYDROPOWER PROJECT General Costs Benefits SENSITIVITY ANALYSIS CONCLUSION FINANCIAL ANALYSIS INTRODUCTION COST ANALYSIS OF PROPOSED INVESTMENTS Cost Estimates Financing Plan FINANCIAL ANALYSIS OF PROPOSED INVESTMENT Capital Costs Output and Tariffs Operating Costs Weighted Average Cost of Capital
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Song Bung 4 Hydropower Project, TA No. 4625-VIE Final Report- Main Report Table of Content

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8.3.5 8.3.6 8.3.7 8.4 8.4.1 8.4.2 8.4.3 8.4.4 8.4.5 8.4.6 8.4.7 8.4.8 8.5 8.5.1 8.5.2 8.6 8.6.1 8.6.2 8.6.3 8.6.4 8.6.5 8.6.6 8.6.7 8.6.8 8.6.9 8.6.10 8.6.11 8.6.12 8.6.13

FIRR Calculation Sensitivity Analysis Financial Statement for Song Bung 4 Hydropower Project PAST FINANCIAL PERFORMANCE OF EVN Introduction Historical Performance Sales and Income Production and Supply Operating Costs Capital Expenditure Overall Position Compliance with Covenants FUTURE FINANCIAL PERFORMANCE OF EVN General Outline of New Business Model FINANCIAL MANAGEMENT CAPABILITY OF EVN/HPPMB3 Introduction Executing and Implementing Agency Flow of Funds Repaying the Loan Staffing Accounting Policies Budgeting System and Payments Policies and Procedures Cash and Bank Safeguard over Assets Reporting Internal Audit and External Audit Conclusions and Recommendations

132 133 134 135 135 135 136 137 139 139 139 140 140 140 141 144 144 145 147 148 149 150 151 151 152 152 152 153 154

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List of Annexes
Annex 1 Annex 2 Annex 3 Annex 4 Annex 5 Annex 6 Annex 7 EVN's Historical Financial Statements Details of EVNs Business Model Data Input for EVNs Business Model Business Model of EVN-User Guide Financial Management Assessment Questionnaire Examples of Job Descriptions in Finance Department of HPPMB3 List of Documents Prepared for ISO 9001

List of Tables
Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8 Table 9 Table 10 Table 11 Monthly Energy Production at Song Bung 4 Hydropower Project Tentative Cost Estimate Power Demand Forecast - Master Plan VI Existing Generating Capacity Power Projects Considered in Master Plan VI and Scheduled Commissioning Forecast Profit and Loss Statement in USD for Song Bung 4 Hydropower Project,2008-2047 Forecast Balance Sheets in USD for Song Bung 4 Hydropower Project,2008-2047 Forecast Cash Flow Statements in USD for Song Bung 4 Hydropower Project,2008-2047 Forecast Profit and Loss Statement in VND for Song Bung 4 Hydropower Project,2008-2047 Forecast Balance Sheets in VND for Song Bung 4 Hydropower Project,2008-2047 Forecast Cash Flow Statements in VND for Song Bung 4 Hydropower Project,2008-2047

List of Figures
Figure 1 Figure 2 Figure 3 Figure 4 Location of Hydropower Plants in Vietnam Tentative Construction Schedule Tentative Implementation Schedule Organization Chart for Project management of Song Bung 4 Hydropower Project

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Final Report-Main Report List of Abbreviations

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Song Bung 4 Hydropower Project, TA No. 4625-VIE


Final Report
Main Report
List of Abbreviations
% 3D AC ADB b.c.m B/C BL Bn BOT DAF DARD DONRE EC EIA ElRR EMP ENS ERA EVN EVN HQ FIRR FS FSL GAF GDP GoV GWh HH HPP HPPMB3 HV IAS ICB ICM IDC IOE IPP IRR JBIC JV km 2 km Kv kWh percent Three Dimension Aluminium Conductor Asian Development Bank Billion Cubic Meters Benefit Cost Base Line Billion Build Operate and Transfer Development Assistance Fund Department of Agriculture and Rural Development Department of Natural Resources and Environment Export Credit Environmental Impact Assessment Economic Internal Rate of Return Environmental Management Plan Energy Not Served Electricity Regulatory Authority Electricity of Vietnam Electricity of Vietnam Headquarter Financial Internal Rate of Return Feasibility Study Full Supply Level Generation and Fuel Gross Domestic Product Government of Vietnam Gigawatt hour Household Hydropower Project Hydro Power Project Management Board No. 3 High Voltage International Accounting Standard International Competitive Bidding Independent Creditors Model Interest during Construction Institute of Energy Independent Power Producer Internal Rate of Return Japan Bank for International Cooperation Joint Venture Kilometre Square Kilometre Kilovolt Kilowatt Hour

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kPa kV kWh LCB LF LFA LOLE LRMS m m.a.s.l m m/s mm m3 Mm3 MOF MOI MOL MoNRE MUSD MW NGO NIAPP NPPMB NPV NTFP O&M ODA PC3 PCR PECC3 PFS PMB PP PPTA Q QCBS RCC REMDP RRP SB4HPC SB4HPP SERF SIA SIDA SIWRR SOE T&D ToC TPS TWh UNDP USc

Kilo Pascal Kilovolt Kilowatt hour Local Competitive Bidding Load Factor Load Factor Adjustment Loss of Loss Expectation Long Run Marginal Cost Meter Metre above sea level Cubic metre Cubic metre per second Millimetre Cubic metres Million cubic metres Ministry of Finance Ministry of Industry Minimum Operating Level Ministry of Natural Resources and Environment Million US Dollar Megawatt Non Governmental Organisation National Institute of Agriculture Planning and Projection Northern Project Power Management Board Net Present Value Non-timber forestry products Operation and Maintenance Official Development Assistance Power Company 3 Project Completion Report Power Engineering Consulting Company No. 3 Pre-Feasibility Study Project Management Board Power Plants Project Preparation Technical Assistance Tunnelling Quality Index Quality Cost Based Selection Roller Compacted Concrete Resettlement Ethnic Minority Development Plan Report and Recommendations to President Song Bung 4 Hydro Power Company Song Bung 4 Hydro Power Project Shadow Exchange Rate Factor Social Impact Assessment Swedish International Development Authority Southern Institute of Water Resources Research State Owned Enterprise Transmission and Distribution Table of Content Thermal Power Station Terawatt hours United Nations Development Program US cent

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USD VAT VND WACC WB DSM WRRC WVF WWF

US Dollar Value Added Tax Vietnamese Dong Weighted Average Cost of Capital World Bank Demand Side Management Water Resource Review Committee World Village Foundation World Wildlife Foundation

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Final Report


Main Report

1
1.1

Introduction
Background

Vietnam stretches over 1,600 km along the eastern cost of the Indochina Peninsula with an area of nearly 330,000 km2. In 2001, Vietnams population was estimated at nearly 80 million, making it the 13th most populous country in the world. Some 80% of the population is ethnic Vietnamese while the rest is made up of over 50 ethno-linguistic groups. Three-quarters of Vietnam consists of mountains and hills, and the country has an abundance of water with the total annual water resources estimated at 880 billion m3. The tropical monsoon climate, however, profoundly affect the quantity and distribution of water. Rainfall is highly uneven, causing frequent and often disastrous floods. Mean rainfall is about 2,000 mm, but most accumulates between May and November when about 70-75% of the annual flow is generated. The mountainous topography and the abundance of water create the possibility of hydropower development to cover the future energy demand for a sustainable economic development of the country. Vietnam is well endowed with rivers with the Red River in the north and the Mekong River in the south ranking among the largest rivers in the world. Hydropower potential in the Red and Mekong rivers is limited apart from the Red River tributaries of Da and Lo-Gam-Chay that exhibits large hydropower potentials. Vu Gia-Thu Bon River Basin in the central part of the country also exhibits considerable hydropower potential. Vietnam has an estimated hydropower potential of about 20,600 MW, of which some 4,200 MW have so far been developed. The current hydropower capacity is nearly 40% of the current total installed capacity of the interconnected system of nearly 11,400 MW. Some 15 medium to large hydropower plants are currently under construction, and an additional 30 medium to large hydropower plants are planned to be commissioned before 2015, among them the Song Bung 4 Hydropower Project. Vietnam is experiencing a period of unprecedented economic growth, accompanied by an average annual growth rate of electricity demand of over 15%. The demand will, according to the latest demand forecast, continue to grow at a steady high to moderate pace in the years to come, and is estimated to grow from the present (2004) 40 TWh to nearly 300 TWh in the year 2020. Ensuring continued, secure and adequate energy supply will be a major factor in sustaining economic growth, creating nonagricultural jobs, and reducing poverty. Conventional power development plans, based primarily on the economics of alternative power generation sources and fuel availability, indicate that hydropower will continue to play a significant role in generation expansion over the next two decades. These plans envisage that hydropower will provide some 13,000 MW (38%) of the additional 34,000 MW of capacity that is foreseen to be required by the year 2020. It is estimated that EVN will need to spend at least 21 billion USD up to 2010, comprising 10

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billion USD on new generation, 5 billion USD on transmission and distribution, and 6 billion USD on debt service.

1.2
1.2.1

The Energy Sector in Vietnam


Institutional Background

Vietnam's power supply system is operated by Electricity of Vietnam (EVN) under the Ministry of Industry (MOI). EVN was established in 1995 and is responsible for generation, transmission and distribution of electricity in Vietnam. The Institute of Energy (IE), an agency under EVN, carries out the future electric power development planning in Vietnam. For the development of hydropower and thermal projects in Vietnam, PECC1, PEEC2, PECC3 and PECC4, four independent accounting agencies under the authority of EVN, are in charge of project planning, investigation and design. EVN divides its transmission system into four geographic areas with four regional Power Transmission Companies (PTC); PTC1 in Hanoi, PTC2 in Da Nang, PTC3 in Nha Trang and PTC4 in Ho Chi Minh City. In 1994, a single-circuit 500 kV transmission line was completed, interconnecting the power systems in the northern, central and southern regions of the country, and a second line is under commissioning. Nine Power Companies (PC), PC1, PC2, PC3, Hanoi PC, Ho Chi Minh City PC, Hai Phong PC, Ninh Binh PC, Hai Dzuong PC and Dong Nai PC (independent accounting agencies under the authority of EVN), purchase bulk power and operate separate regional, medium and low voltage distribution networks. The areas in the north, except around Hanoi, Hai Phong, Ninh Binh and Hai Dzuong, are served by PC1, while PC2 is responsible for the southern part of the country except for Ho Chi Minh City and Dong Nai Province. The central region of the country is served by PC3. 1.2.2 Generation System

1.2.2.1 General As of 2004, the total installed capacity in the country amounted to 11,340 MW, an increase of 1,444 MW (nearly 15%) from the previous year. Hydropower amounted to nearly 37% of the total installed capacity and 38% of the total power production of 46,201 GWh, an increase of 5,376 GWh (nearly 14%) from the previous year, as seen from the table below:
Source Hydropower Coal-fired Oil-fired Gas-fired Diesel IPP Total Capacity MW 4,155 1,245 198 2,939 285 2,518 11,340 Capacity % 36.6 11.0 1.8 25.9 2.5 22.2 100 Production GWh 17,635 7,015 602 14,881 42 6,026 46,201 Production % 38.2 15.2 1.3 32.2 0.1 13.0 100

It is estimated that some 34,000 MW, excluding power purchase from other countries, will be developed up to 2020, when the composition of thermal power is estimated to increase to 56% and hydropower is estimated to decrease to 36%, with the balance of 8% (4,000 MW)

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taken by import from Laos, Cambodia and China. 1.2.2.2 The Thermal Generation System Existing Plants The existing thermal power generation plants in the northern region are conventional coalfired thermal steam units with a total installed capacity of 1,245 MW. In the southern region, the thermal generation facilities are conventional oil-fired thermal steam units with a total installed capacity of 198 MW, gas turbines (both gas and oil) of 5,457 MW and diesel power generation of 194 MW. In the central region the thermal generation facilities are small-scale diesel power plants scattered throughout the region with a total installed capacity of 245 MW, however, with an available capacity estimated at about 91 MW only. Planned Projects According to the latest power development plan, a total of 24,000 MW of thermal power is expected to be developed from present to 2020. In the northern region of Vietnam, thermal power development is based on the coal resources in Quang Ninh Province. The fuel resources for thermal generation in the southern region are offshore natural gas and oil associated gas. 1.2.2.3 The Hydropower Generation System Existing Hydropower Plants The existing hydropower generation facilities in the northern region have a total installed capacity of 2,040 MW, consisting of Hoa Binh (1,920 MW) and Thac Ba (120 MW) hydropower plants. In the southern region the total installed capacity amounts to 1,213 MW, consisting of Da Nhim (167 MW), Tri An (420 MW), Thac Mo (150 MW), Ham Tuan (300 MW), Da Mi (176 MW) and Can Don (78 MW) hydropower plants. In the central region the corresponding figure is 856 MW, consisting of Yali (720 MW), Vinh Son (66 MW) and Song Hinh (70 MW) hydropower plants. Some 500 small hydropower plants, with a total production of some 4 GWh/year, generate the balance of 46 MW. The location of the main hydropower facilities is shown on Figure 1. Hydropower Development According to the latest power development plan, some 13,000 MW of hydropower is expected to be developed from present to 2020, being nearly 65% of the economic viable hydropower potential in the country. The location of hydropower projects under construction, committed, or planned in the latest power development plan covering the period 2005-2020, of which Song Bung 4 Hydropower Project is planned for year 2011, are shown on Figure 1. 1.2.3 Energy and Power Demand

Institute of Energy has recently submitted Master Plan Study on Electric Power Development in Vietnam, Stage VI, including a power demand forecast covering the period 2005-2025 for three economic growth scenarios, High Case, Base Case and Low Case, see details in Section 7.3.

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1.3
1.3.1

The PPTA
General

The Contract for Consultants Services for this PPTA was signed between ADB and SWECO International on 3rd November 2005, and Notice to Proceed was given four days later. The commencement date was agreed to be 14th November 2005. The Study Team from SWECO International consists of the following positions and members:
Position International Consultants Team Leader Engineering Hydrologist Geotechnical Engineer Dam Design Engineer Mechanical-Electrical Engineer Finance/Power Sector Reform Specialist Resettlement Planning Specialist Ethnic Minority Development Planning Specialist Public Health Impact Specialist Gender Specialist Consultation Specialist Environmental Planner Terrestrial Ecologist/Forestry Specialist Aquatic Ecologist Tim McGrath Domestic Consultants Hydropower Planning Engineer Geotechnical Engineer Mechanical-Electrical Engineer Power System Economist Financing Expert Resettlement Planning Specialist Resettlement Field Planner 1 Resettlement Field Planner 2 Resettlement Infrastructure Engineer Resettlement DTM/GIS Expert Upland Irrigation Engineer Ethnic Minority Development Planning Specialist Ethnic Minority Field Planner 1 Ethnic Minority Field Planner 2 Public Health Impact Specialist Gender Specialist Consultation Specialist Environmental Planner Terrestrial Ecologist/Forestry Specialist Fauna Specialist Aquatic Ecologist Road Engineer Mining Engineer GIS Expert Livestock and Forages Specialist Forestry and NTFP Specialist Agriculture Specialist Fishery Specialist Name Gran Lifwenborg Leif Basberg Anders Heiner Ole Berthelsen Ove Brattberg William Pemberton Chris Flint Anders Hjort Anders Norman TiiaRiita Granfelt Dan Rocovitz Jan-Petter Magnell Shivcharn Dhillion Dag Berge Livelihood Team Leader Phan Ky Nam Nguyen Cong Man Phan Xuan Huy Nguyen Tien Nguyen Pham Ngoc Thang Vu Cong Lan Le Trung Thong Nguyen Ha Hue Nguyen Xuan Khuong Vu Huy Hoang Nguyen Ngoc Khanh Bui Van Dao Dao Huy Khue Dang Minh Ngoc Nguyen Thi Lien Huong Vu Thi Ngoc Tran Pham Thi Bich Ngoc Dang Kim Nhung Phan Ke Loc Nguyen Quang Truong Ho Than Hai Vu Van Thi Pham Thai Nam Nguyen H Quyen Bui Minh Hanh Tran Thi Binh Lam Quang Hinh Phan Thi Ngoc Diep

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According to the Contract the PPTA is divided into the following phases: Inception Phase, including initial review of the Feasibility Study and detailed work plan. First Interim Phase, including detailed technical review of the Feasibility Study, results from the hydrological/hydrodynamic modeling study, and results from the EIA/SIA baseline studies. Second Interim Phase, including Draft Resettlement Plan, Draft EIA Report, cost estimates, economic/financial analyses, and the first review of Technical Design. Draft Final Phase, including Final Resettlement Plan, Final EIA Report, and draft of other safeguard documents, Draft RRP, and institutional review. Final Phase, including final of other safeguard documents, Final RRP, and the second review of Technical Design

The Inception Report was submitted on 12th December 2005, and was discussed in a Tripartite Meeting in Da Nang on 13th December 2005 between ADB, the Implementing Agency and the Consultant. The First Interim Report was submitted on 10th March 2006, and was discussed in a Tripartite Meeting in Da Nang on 13th March 2006 between ADB, the Implementing Agency and the Consultant. An Addendum to the First Interim Report was submitted on 24th April 2006 following comments from ADB. The Second Interim Report was submitted on 12th June 2006, and was discussed in a Tripartite Meeting in Da Nang on 13th June 2006 between ADB, the Implementing Agency and the Consultant. 1.3.2 Phase I of the PPTA

Phase I of the PPTA was completed in May 2005 as an initial step in ADBs planning and appraisal process of the Project and focused on issues related to water resources planning and management in the river basin, and environmental and social issues. The scope of Phase I of the PPTA on Song Bung 4 Hydropower Project (ADB TA 4475-VIE) included the following: 1.3.3 Institutional framework for management of water resources in the basin. Identification of stakeholders involved in planning and management of basin water resources. Issues related to participatory watershed management. Preliminary identification of social and environmental impacts. Identification of threats to protective areas. Outline of a consultation strategy. Consideration of the scope of livelihood development support. Capacity building for implementation of environmental and social mitigation measures. Overall Objective

The overall objective of this PPTA (ADB TA 4625-VIE) is to prepare for ADB financing of the proposed Song Bung 4 Hydropower Project in Vu Gia-Thu Bon River Basin in Quang Nam Province in the central part of Vietnam, see a general description of the Project in Chapter 2. In general terms, the PPTA consists of the following parts:

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Technical/Engineering Review of the Project to review the Feasibility Study on the Project prepared by PECC3, and the subsequent Technical Design. Economic and Financial Analysis to assess the Projects economic and financial viability and confirm that the Project is part of the least cost expansion plan for meeting the future electricity demand in Vietnam. Social Assessment to ensure compliance with ADBs social safeguard policies and guidelines, and still being acceptable to the Government of Vietnam and feasible within the Vietnamese context. Environmental Assessment to ensure compliance with ADBs environmental policies and guidelines. Objective of Draft Final Report

1.3.4

The objective of this Draft Final Report is to summarize all studies performed during the PPTA, and to present draft safeguard documents, as follows: To report on the layout of Song Bung 4 Hydropower Project as presented in the Feasibility Study, and suggested modifications, as reported in Chapter 2 of this Main Report. To report on the detailed technical review of the Feasibility Study, as reported in Chapter 3 of this Main Report. To report on the tentative Construction Schedule for the Project, as reported in Chapter 4 of this Main Report. To report on the Cost Estimate of the Project, as reported in Chapter 5 of this Main Report. To report on the Implementation and Procurement of the Project, as reported in Chapter 6 of this Main Report. To report on the Economic Analysis of the Project as reported in Chapter 7 of this Main Report. To report on the Financial Analysis as reported in Chapter 8 of this Main Report. To present the Environmental Impact Assessment (EIA) Report. To present the Resettlement and Ethnic Minority Development Plan (REMDP) in four volumes. To present the Social Mitigation Plan To present the Gender Action Plan. To present the Consultation Report. To present the Social Reports from the Local Consultants as reported in the Annex. Summary of Activities

1.3.5

The main activities during the PPTA are summarized in the table below:

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Dates Inception Phase 14 Nov 2005 14 25 Nov 2005 21 Nov 2 Dec 2005 21 Nov 1 Dec 2005 21 Nov 1 Dec 2005 25 27 Nov 2005 28 Nov 1 Dec 2005 28 Nov 1 Dec 2005 2 Dec 2005 First Inception Phase 12 19 Dec 2005 Jan 2006 First Interim Period Jan 2006 Jan 2006 Jan 2006 Jan 2006 10 Feb 2006 Feb 2006 Feb 2006 Feb 2006 10 Mar 2006 Second Inception Phase 10 17 Mar 2006 Second Interim Period Second Interim Period Second Interim Period April-May 2006 24-26 April 2006 27 April 2006 May 2006 2 June 2006 12 June 2006 Draft Final Phase 12-16 June 2006 21 June-2 July 26 June-7 July

Activity Commencement of Study Initial Technical Review of Feasibility Study (FS) Initial Works on Hydrological Modeling Study Review of Resettlement Plan in FS Review of EIA in FS Meeting with ATD3 and short site visit Preparation of Activities and Detailed Work Plan Drafting of Inception Report Submission of Inception Report

International Consultants Involved Lifwenborg Basberg Flint Magnell Flint Lifwenborg, Flint, Hjort, Magnell, Rocovitz Lifwenborg, Flint, Magnell, Basberg -

Lifwenborg, Berthelsen, Heiner, Brattberg Hydrological Modeling Study Basberg Planning for Environmental Field Work and Studies Magnell, Berge, Dhillion Planning for Social Field Work and Studies Flint, Hjort, Granfelt, Rocovits, McGrath Initial Work on Economic Analysis Initial Work on Financial Analyses Pemberton First EIA Workshop Lifwenborg, Magnell, Flint, Granfelt, Rocovits, McGrath Environmental Field Work and Base-line Studies Magnell Social Field Work and Base-line Studies Flint, Hjort, Granfelt, McGrath Drafting of Inception Report Lifwenborg, Flint, Magnell, Basberg, Pemberton Submission of First Interim Report -

ADB Mission, Discussions on Inception Report Detailed Technical Review of Feasibility Study

ADB Mission, Discussions on First Interim Report Work on Implementation and Procurement, Cost Estimates and Operation of the Project Financial Analysis and EVNs Business Model Social Assessment and Assessment of Resettlement Sites Environmental Assessment ADB Mission, Discussions on Resettlement Sites Second Stakeholder Consultation Workshop Drafting of Second Interim Report Submission of Second Interim Report-Digital Submission of Second Interim Report-Hard Copy ADB Mission, Discussions on Second Interim Report Final Village Consultation Community Based Forest Development Plan

Lifwenborg Pemberton Flint, Hjort, Granfelt, McGrath Magnell, Berge, Dhillion Lifwenborg, Flint, Hjort, Granfelt, McGrath Lifwenborg, Flint, Magnell Granfelt, McGrath All Lifwenborg, Flint, Granfelt -

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8-10 July Draft Final Period 15 July October December

ADB Mission, Discussions on Village Consultation Drafting of Draft Final Report, including environmental and social safeguard documents Submission of Draft Final Report-Digital Submission of Draft Final Report-Hard Copy Submission of Final Report-Hard Copy

Lifwenborg, Flint All -

1.3.6

Acknowledgments

In presenting this Final Report, the Consultant wishes to respectfully acknowledge its gratitude for all the co-operation, assistance, advice and hospitality given to the Consultant by all parties concerned with this PPTA. Special thanks are due to ABD, its Team Leader Mr. Pradeep Perera and its Team Members of this PPTA, the Hydro Power Project Management Unit No. 3 and EVN, and last but not least the local sub-consultants for the PPTA.

1.4
1.4.1

Overview of Hydropower Development in Vu Gia-Thu Bon River Basin


General

Song Bung 4 Hydropower Project is part of a plan to develop a number of hydropower projects in Vu Gia-Thu Bon River Basin as seen in Figure 1-1 below. The river basin consists of two main rivers, Vu Gia River and Thu Bon River, and three main tributaries, Dak Mi River, Bung River and Tranh River.
Figure 1-1. Location of Hydropower Projects in Vu Gia-Thu Bon River Basin

The total theoretical and economic hydropower potential of Vu Gia Thu Bon River Basin in Central Vietnam is estimated at some 1,300 MW and 1,000 MW, respectively, and the annual energy potential at about 6 TWh and 4.6 TWh, respectively, representing a considerable resource for hydropower development compared to other river basins in Vietnam.

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A River Basin Plan for Vu Gia Thu Bon was carried out by PECC1 in 2002, in connection with the Feasibility Study on A Vuong Hydropower Project, to investigate the hydropower potential of the river basin. The Vu Gia-Thu Bon River Basin was studied in Stage 2 of the National Hydropower Plan (NHP) Study (November 2005), and the hydropower projects descried below were included in the NHP Study and are also relevant for this PPTA. 1.4.2 Existing and Hydropower Projects under Construction

There are no significant hydropower projects in operation in the river basin, while A Vuong and Song Tranh 2 hydropower projects are currently under construction with the location according to Figure 1-1. 1.4.2.1 A Vuong Hydropower Project Construction of A Vuong Hydropower Project started in 2003 and is located on A Vuong River, about 10 km upstream of the confluence with Bung River and 80 km west from Da Nang. The A Vuong Hydropower Project comprises an 80 m high RCC dam with a gated spillway located in the central part of the dam. The waterway comprises a 5.3 km long headrace tunnel and a 520 m long surface penstock. The powerhouse will be constructed in an excavated pit and equipped with two Francis units of 105 MW, totalling 210 MW. The Project has a fairly large reservoir with an area of 9 km2 that will provide an active storage of 267 Mm3, corresponding to some 21% of the mean annual inflow of 40 m3/s. According to the Technical Design prepared by PECC2 the main project parameters for A Vuong Hydropower Project are as follows:
Item Catchment Area Mean Annual Flow Full Supply Level, FSL Reservoir Area at FSL Minimum Operating Level, MOL Reservoir Area at MOL Reservoir Regulation Reservoir Total Storage Reservoir Active Storage Spillway Design Flood Maximum Tail Water Level Normal Tail Water Level Maximum Head Design Head Minimum Head Total Turbine Design Discharge Installed Capacity Firm Capacity Annual Average Energy Potential (PECC2) Unit km2 m3/s m.a.s.l km2 m.a.s.l km2 m 3 Mm Mm3 m3/s m.a.s.l m.a.s.l m m m m3/s MW MW GWh A Vuong 682 39.8 380 9.1 340 4.3 40 343.6 266.5 5,730 86.6 58 320 300 265 78.4 210 66.9 815

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1.4.2.2 Song Tranh 2 Hydropower Project The construction of Song Tranh 2 Hydropower Project started in 2006 and is located on Tranh River and situated about 6 km west of Tranh My Town. The Song Tranh 2 Hydropower Project incorporates a RCC dam of some 95 m height with a spillway in the river channel, and an intake on the right bank. A 1.8 km long pressure tunnel will convey the flow to the surface power station equipped with two Francis turbines, with a total installed capacity of 162 MW. The Project has a large reservoir with an area of 22 km2 that will provide an active storage of 520 Mm3, corresponding to about 16% of the mean annual inflow of 106 m3/s. According to the Feasibility Study prepared by PECC1 the main project parameters for Song Tranh 2 Hydropower Project would be as follows:
Item Catchment Area Mean Annual Flow Full Supply Level, FSL Reservoir Area at FSL Minimum Operating Level, MOL Reservoir Area at MOL Reservoir Regulation Reservoir Total Storage Reservoir Active Storage Spillway Design Flood Maximum Tail Water Level Normal Tail Water Level Maximum Head Design Head Minimum Head Total Turbine Design Discharge Installed Capacity Firm Capacity Annual Average Energy Potential (PECC1) Unit km2 m3/s m.a.s.l km2 m.a.s.l km2 m 3 Mm Mm3 m3/s m.a.s.l m.a.s.l m m m m3/s MW MW GWh Song Tranh 2 1,100 106 175 21.5 140 9.3 35 733.4 521.1 11,069 87.5 71 102.3 88.3 62.9 209.7 162 41.2 620.7

1.4.3

Planned Hydropower Projects

1.4.3.1 General A number of hydropower projects have been identified in the Vu Gia-Thu Bon River Basin, and the following projects have been studied to different levels by Vietnamese agencies:
Basin Vu Gia Sub-basin Bung Bung Bung Dak Mi Dak Mi Con Project Song Bung 2 Song Bung 4 Song Bung 5 Dak Mi 1 Dak Mi 4 Song Con 2 Catchment Area Km2 334 1,467 2,380 397 1,125 248 FSL m 605 222.5 60 845 258/106 275 Installed Capacity MW 100 156 85 215 141/39 46

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The location of the above hydropower projects is shown in Figure 1-1, and described in more details below, apart from Song Bung 4 Hydropower Project that is described in Chapter 2. 1.4.3.2 Song Bung 2 Hydropower Project The Song Bung 2 Hydropower Project would be the most upstream in a cascade of hydropower development proposed along Bung River, and is located in Nam Giang District of Quang Nam Province. The Bung River originates in the mountainous area between Laos and Vietnam. The dam site of the Song Bung 2 Hydropower Project would be located some 12 km from the Laotian border. The general layout of Song Bung 2 Hydropower Project comprises of the following parts according to the Feasibility Study by PECC3 (June 2005): A 100 m high and 350 m long Concrete Faced Rockfill Dam (CFRD) with the crest at +607.5 m. Three surface spillways with radial gates, width 15 m and height 16 m. A 9.1 km long TBM pressure tunnel with a diameter of 4 m. A 850 m long penstock with a diameter of 2.6 m A surface power station housing two 50 MW Francis units. A 1.1 km long tailrace tunnel with a diameter of 4.8 m. A 15 km long 220 kV, AC 240, transmission line with double circuits. A 25 km long new road will be constructed from Cha Val town towards Zu Oih village and further to the powerhouse area and dam site.

The Project has a reservoir with an area of 2.9 km2 that will provide an active storage of 69 Mm3, corresponding to about 8% of the mean annual inflow of 29 m3/s. The salient features of Song Bung 2 Hydropower Project given in the Feasibility Study are outlined in the table below:
Item Catchment Area Mean Annual Flow Full Supply Level, FSL Reservoir Area at FSL Minimum Operating Level, MOL Reservoir Area at MOL Reservoir Regulation Reservoir Total Storage Reservoir Active Storage Maximum Tail Water Level Normal Tail Water Level Design Head Total Turbine Design Discharge Installed Capacity Annual Average Energy Potential (PECC3) Unit km2 m3/s m.a.s.l km2 m.a.s.l km2 m Mm3 Mm3 m.a.s.l m.a.s.l m m3/s MW GWh Song Bung 2 324 18.9 605 2.9 565 1.0 40 87.2 69.2 242.8 224.6 330.5 34.8 100 415

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In the NHP Study it was concluded that the recommended development of Song Bung 2 Hydropower Project would be economically viable. No additional benefits in respect of flood storage protection and supply of irrigation water to downstream users would result from the Project. The environmental and social issues are small with no identified people for resettlement and no inundation of agricultural land. 1.4.3.3 Song Bung 5 Hydropower Project The Song Bung 5 Hydropower Project would be situated some 10 km northwest of Tanh My City and some 10 km upstream of the confluence between Bung and Cai rivers on the border between Hien and Nam Giang districts. The Song Bung 5 Hydropower Project is the most downstream project on a cascade development of Bung River, and is recommended to provide re-regulation of the intermittent outflow from Song Bung 4 and A Vuong hydropower projects. The general layout of Song Bung 5 Hydropower Project comprises of the following parts according to the Pre-feasibility Study by PECC3 (September 2005): A 50 m high and 280 m long concrete gravity dam with the crest at +62.0 m. A surface spillway with six radial gates, width 15 m and height 16 m. A short concrete-lined waterway. A surface power station housing two 42.5 MW Kaplan units. A 15 km long 110 kV, AC 185, transmission line with double circuits. 15 km of new road from Linh Hiep on Highway No. 14B.

The Project has a small reservoir for daily re-regulation. The salient features of Song Bung 5 Hydropower Project given in the Pre-feasibility Study are outlined in the table below:
Item Catchment Area Mean Annual Flow Full Supply Level, FSL Reservoir Area at FSL Minimum Operating Level, MOL Reservoir Area at MOL Reservoir Regulation Reservoir Total Storage Reservoir Active Storage Maximum Tail Water Level Normal Tail Water Level Design Head Total Turbine Design Discharge Installed Capacity Annual Average Energy Potential (PECC3) Unit km2 m3/s m.a.s.l 2 km m.a.s.l km2 m Mm3 3 Mm m.a.s.l m.a.s.l m m3/s MW GWh Song Bung 5 2,388 139 60 2.6 58 2.1 2 39.2 4.6 40.3 18.2 39.8 250 85 371

In the NHP Study it was concluded that the recommended development of Song Bung 5 Hydropower Project would be economically viable. No additional benefits in respect of flood storage protection and supply of irrigation water to downstream users would come out of the

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Project. The environmental and social impact would be small with an estimated resettlement of 195 people and inundation of some 16 ha of agricultural land. 1.4.3.4 Dak Mi 1 Hydropower Project The Dak Mi 1 Hydropower Project would be situated some 30 km south of Kham Duc in Phuc Son District. The general layout of Dak Mi 1 Hydropower Project comprises of the following parts according to the NHP Study: An 82 m high and 370 m long (dam 2A), and a 71 m high and 320 m long (dam 2B) rockfill dams with the crest at +851.0 m and +849.7 m, respectively. Four surface spillways with radial gates, width 15 m and height 16 m. A 10.7 km long headrace tunnel and a 6.6 km long tailrace tunnel, both concrete-lined and with a diameter of 5.9 m. A 1 km long concrete-lined underground penstock with a diameter of 3.6 m. An underground power station housing two 107.5 MW Francis units. A 28 km long 220 kV, AC 400, transmission line with double circuits. 10 km of new constructed road from the new Ho Chi Minh Highway.

The Project has a reservoir with an area of 4.6 km2 that will provide an active storage of 93 Mm3, corresponding to about 11% of the mean annual inflow of 26 m3/s. The salient features of Dak Mi 1 Hydropower Project given in the NHP Study are outlined in the table below:
Item Catchment Area Mean Annual Flow Full Supply Level, FSL Reservoir Area at FSL Minimum Operating Level, MOL Reservoir Area at MOL Reservoir Regulation Reservoir Total Storage Reservoir Active Storage Maximum Tail Water Level Normal Tail Water Level Design Head Total Turbine Design Discharge Installed Capacity Annual Average Energy Potential Unit km2 m3/s m.a.s.l km2 m.a.s.l km2 m Mm3 Mm3 m.a.s.l m.a.s.l m m3/s MW GWh Dak Mi 1 396.8 26.4 845 4.6 810 1.4 35 116.1 93.4 258 252 552 44 215 824

In the NHP Study it was concluded that the recommended development of Dak Mi 1 Hydropower Project would be economically viable, with some benefits in respect of flood storage protection and supply of irrigation water to downstream users. The social issues at stake would be small with no resettlement and inundation of some 75 ha of agricultural land. The environmental impact would be tangible, mainly because of the proximity to protected areas. In the overall assessment in the NHP Study, taking into account technical/economic

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and environmental/social preferences, Dak Mi 1 Hydropower Project was categorized as a project with reservations/low interest. 1.4.3.5 Dak Mi 4 Hydropower Project The Dak Mi 4 Hydropower Project would be situated some 5 km north-east of Kham Duc town in Phuc Son District. The Dak Mi 4 Hydropower Project would be the most downstream project in Dak Mi River, and the rationale of Dak Mi 4 Hydropower Project is a river diversion from Dak Mi River to the upper Thu Bon River. The general layout of Dak Mi 4 Hydropower Project consists of an upper scheme, an intermediate reservoir and a lower scheme, and comprises the following parts according to the Feasibility Study by PECC2 (July 2005): A 90 m high and 430 m long RCC dam with the crest at +263.2 m. Lower control dams are situated at the intermediate reservoir and at the intake pond for the lower scheme. A surface spillway with 5 radial gates, width 20 m and height 15 m. A 2,2 km long concrete-lined transfer tunnel, and a 1,8 km long embedded penstock with a diameter of 5.6 m connected to the upper power station. A 240 m long surface penstock with a diameter of 6.0 m to the lower power station. A surface power station housing three 47 MW Francis units in the upper power station, and a lower power station housing three 13 MW Francis or Kaplan units. A 30 km long 220 kV, AC 400, transmission line with double circuits. 10 km of access roads from National Road 14 E.

The Project has an upper reservoir with an area of 10.4 km2 that will provide an active storage of 158 Mm3, corresponding to about 7% of the mean annual inflow of 68 m3/s. The salient features of Dak Mi 4 Hydropower Project given in the Feasibility Study are outlined in the table below:
Item Catchment Area Mean Annual Flow Full Supply Level, FSL Reservoir Area at FSL Minimum Operating Level, MOL Reservoir Area at MOL Reservoir Regulation Reservoir Total Storage Reservoir Active Storage Maximum Tail Water Level Normal Tail Water Level Design Head Total Turbine Design Discharge Installed Capacity Annual Average Energy Potential (PECC2) Unit km2 m3/s m.a.s.l km2 m.a.s.l km2 m Mm3 Mm3 m.a.s.l m.a.s.l m m3/s MW GWh Dak Mi 4 Upper 1,125 67.8 258 10.4 240 7.0 18 310 158 108 106 135 121 141 582 Dak Mi 4 Lower 29 1.1 106 0.45 105 0.4 1 2.6 0.6 71.5 67.5 37.5 122 39 161

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Item Installed Capacity Average Annual Energy Production

Unit MW GWh

Dak Mi 4 Combined 180 743

In the NHP Study it was concluded that the recommended development of Dak Mi 4 Hydropower Project would be marginally economically viable, with some benefits in respect of flood storage protection and supply of irrigation water to downstream users. The social impact would be small with an estimated resettlement of 126 people and inundation of some 139 ha of agricultural land. The downstream environmental impact would be tangible due to the diversion of water from Dak Mi River. In the overall assessment in the NHP Study, taking into account technical/economic and environmental/social preferences, Dak Mi 4 Hydropower Project was categorized as a project with reservations/low interest. 1.4.3.6 Song Con 2 Hydropower Project The Song Con 2 Hydropower Project would be located on the Song Con tributary, some 20 km upstream of the confluence with Vu Gia River and some 12 km south-west of Mang May village in Hien District. The general layout of Song Con 2 Hydropower Project comprises of the following parts according to the Pre-feasibility Study by PECC3 (July 2003): A 30 m high and 148 m long concrete gravity dam with the crest at +283.0 m. A 120 m wide un-gated spillway. A 4.2 km long headrace tunnel with a diameter of 2.5 m. A 650 m long surface penstock with a diameter of 2 m. A surface power station housing two 23 MW Francis units. A 2 km long 220 kV, AC 185, transmission line with double circuits. 22 km of new road from the Ba Lien village on Highway No 4. The powerhouse area would also be connected to Highway No. 4 from Cau Ha Tan.

The Project has a small reservoir for daily regulation only. The salient features of Song Con 2 Hydropower Project given in the Pre-feasibility Study are outlined in the table below:
Item Catchment Area Mean Annual Flow Full Supply Level, FSL Reservoir Area at FSL Minimum Operating Level, MOL Reservoir Area at MOL Reservoir Regulation Reservoir Total Storage Reservoir Active Storage Maximum Tail Water Level Unit km2 3 m /s m.a.s.l km2 m.a.s.l km2 m Mm3 Mm3 m.a.s.l Song Con 2 248 13.2 275 0.13 274 0.12 1 0.78 0.1 29.7

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Normal Tail Water Level Design Head Total Turbine Design Discharge Installed Capacity Annual Average Energy Potential (PECC3)

m.a.s.l m m3/s MW GWh

18 215 22.8 46 168

In the NHP Study it was concluded that the recommended development of Song Con 2 Hydropower Project would be economically viable. No additional benefits would result from the Project in respect of flood storage protection and supply of irrigation water to downstream users. The environmental and social would be small with an estimated resettlement of 60 people and inundation of some 12 ha of agricultural land.

2
2.1

Song Bung 4 Hydropower Project


General

The Song Bung 4 Hydropower Project would be built on Bung River, a tributary of Vu Gia River, in Zuoih and Ta Bhing communes of Nam Giang District, Quang Nam Province, some 100 km west of Da Nang City, see Figure 2-1 below:

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Figure 2-1. Location of Proposed Song Bung 4 Hydropower Project


750000 800000 850000 900000

Da Nang
Sg .V u G ia

Hien
1750000
u Sg. V Gi a

Dien Ban
.T Sg n Bo hu

HOI AN

1750000

Dai Loc
Sg. Bung

Duy Xuyen

Sg .C

Thang Binh Que So n

Song Bung 4
T Sg. inh raV

Giang

Song Thanh nat ur e r eser ve

.V Sg h in
.T Sg nh ha

Tam Ky Town Hieo Duc Tien Phuoc Nui Thanh

1700000

1700000

Phuoc So n

LEGEND
River Main Road Catchment of Song Bung 4 Catchment of Vu Gia Thu Bon Nature Reserves Reservoir of Song Bung 4 project
N

Tr a My
Ngo c L inh nat ur e r eser ve

8 Kilometers

750000

800000

850000

900000

The key features of the Project include a dam, a reservoir, an underground water conveyance system and a surface power station, with the general layout according to the Feasibility Study as shown in Figure 2-2.

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Figure 2-2. General Layout of Song Bung 4 Hydropower Project According to Feasibility Study

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2.2
2.2.1

Project Components According to Feasibility Study


General

The main features and components of Song Bung 4 Hydropower Project according to the Feasibility Study is summarized in the table below and described in more detail in the following:
Main Features and Components of Song Bung 4 Hydropower Project According to FS Main Features Catchment Area Mean Annual Flow Full Supply Level, FSL Reservoir Area at FSL Minimum Operating Level, MOL Reservoir Area at MOL Reservoir Regulation Reservoir Total Storage Reservoir Active Storage Spillway Design Flood Maximum Tail Water Level Normal Tail Water Level Design Head Total Turbine Design Discharge Installed Capacity Annual Average Energy Potential Unit km2 m3/s m.a.s.l km2 m.a.s.l km2 m Mm3 Mm3 m3/s m.a.s.l m.a.s.l m m3/s MW GWh Song Bung 4 1,477 88.2 222.5 15.8 195 7.8 27.5 493.3 320.7 20,000 125 96.5 104.9 172.7 156 618 Main Components Dam Type Dam Height Crest Length Crest Level Spillway Gates Tunnel, Length Tunnel Diameter Penstock, Length Penstock, Diameter Unit m m m.a.s.l Nos m m m m Song Bung 4 RCC 110 370 227.5 6 3,050 6.8 270 5.2

The project description below is based on information given in the Feasibility Study and could be modified in the Technical Design Phase of the Project. Modification of certain features has also been suggested in this PPTA as summarized in Section 2.3. 2.2.2 Reservoir

The Full Supply Level (FSL) of the reservoir will be at El. 222.5 m that will create a lake with an area of 15.8 km2 and store a total volume of water of 493 million m3. The drawdown of the reservoir to the Minimum Operating Level (MOL) at El. 195 m will be 27.5 m. At the MOL the area would be 7.8 km2 and the volume of water some 173 million m3. The volume of water to be used for electricity generation, between FSL and MOL, would be 320 million m3. 2.2.3 Dam Structure

The reservoir will be formed by the construction of a RCC (Roller Compacted Concrete) gravity dam on Bung River. The dam will have a crest length of some 370 m and a maximum height of 110 m from the deepest foundation level to the crest level of +227.5 m. The foundation of the dam structure will be grouted for seepage control and for consolidation of the bedrock, and the dam will include inspection and drainage galleries, and be equipped with instrumentation consistent with modern international dam safety practice.

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2.2.4

Spillway

The spillway will have five radial gates that will be incorporated in the dam structure, and is designed for a 5,000-year flood (check flood) of some 15,500 m3/s. The spillway chute will terminate in a ski-jump that will throw the water into a pre-excavated plunge pool in the river downstream of the dam where the energy will be dissipated. The floods will be attenuated when passed through the reservoir giving an outflow from the spillway of some 12,800 m3/s at the 5,000-year flood. The spillway is designed to work effectively for smaller floods than the design flood, by operating the spillway gates to control the water level in the reservoir. During maintenance of the spillway gates, stoplogs will be placed in front of the intake. An acoustic warning system will be recommended to be installed from the dam down to the confluence with Cai River to warn people when the spillway gates will be opened. 2.2.5 Intake

A freestanding 50 m high intake structure will be constructed some 400 m to the south of the dam to convey the water to the headrace tunnel. The intake will have one opening and be equipped with a downstream service gate and an upstream guard gate. The opening will be equipped with trash racks and mechanized trash-cleaning rakes. For maintenance of the guard gate, stoplogs may be placed in front of the intake. For dewatering of the water conveyance system during inspection and maintenance, both the services and guard gates will be closed. 2.2.6 Headrace Tunnel

A nearly horizontal headrace tunnel, with a total length of some 3 km and an inner diameter of 6.8 m, will be excavated from the intake to the surge tank. The tunnel will be concrete lined and supported by steel-ribs or other strengthening measures when the tunnel encounters week rock formations. Construction of the headrace tunnel will be through two adits, one at the upstream end and one at the downstream end. 2.2.7 Surge Tank

At the downstream end of the headrace tunnel, a 75 m high (54 m below ground and 21 m above ground) surge tank will be constructed to reduce pressure transients created by start-up and load rejection operations of the turbine-generator units. The surge tank will be concrete lined and have an internal diameter of 24 m above ground and 15 m below ground. Construction of the surge tank will be through the adit at the downstream end of the headrace tunnel and from above ground. 2.2.8 Penstock

Downstream of the surge tank, an underground penstock, with a total length of some 270 m and a diameter of 5.2 m, will be constructed, being horizontal for the first part followed by a vertical part and finally a horizontal part towards the power station. Construction of the penstock will be through two adits, one utilizing the adit at the downstream end of the headrace tunnel and one at the downstream end of the penstock. 2.2.9 Power Station and Switchyard

The powerhouse will be located close to Bung River, some 5 km downstream of the dam, and consists of a 68 m high, 58 m long and 24 m wide surface structure. The structure will house

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two turbine-generator units with a total capacity of 156 MW, an erection bay, and auxiliary facilities for operation and maintenance. Two 3-phase transformers will be placed outside at the back of the powerhouse. The control building, for operation of the Project, will be located adjacent to the powerhouse structure. The buildings will be placed at El. 125 m being 0.5 m above the level for a 5,000-year flood. The transformers at the powerhouse will be connected to the transmission lines via a switchyard, with dimensions 70 m x 143 m, located some 500 m downstream of the powerhouse. 2.2.10 Tailrace Canal

A 20 m long tailrace canal will divert the water back to Bung River. 2.2.11 Transmission Line

The power generated at Song Bung 4 Hydropower Project will be connected to the national grid via a some 35 km long double circuit 220 kV transmission line to the existing 220/110 kV substation at Thanh My. In addition, it is proposed to construct a 35 kV transmission line from an existing low voltage substation at Thanh My to the project site for electricity supply during construction of the Project. This line, with a length of some 38 km, will follow Highway 14 D and the access road to the project site. 2.2.12 Access Roads

For the construction of Song Bung 4 Hydropower Project, a considerable amount of materials need to be transported from Da Nang City, some 100 km to the east. The existing Highway 14D is reported to be adequate for this purpose, and no additional upgrading of this road is foreseen. For transport of heavy equipment, such as the generators, at least the last part from Nam Giang would probably need to be closed during the transportation. From Highway 14D an estimated 5.4 km long access road will be constructed to the dam site along the right edge of Bung River. The standard of the road will be Grade 4 in mountainous areas with asphalt coating. A number of access roads will be constructed within the project site, to be used both during construction and operation. A 100 m long temporary bridge across Bung River is planned some 400 m downstream of the dam, to be used during the construction of the dam structure and thereafter removed. Permanent access across the river will be through the crest of the dam. 2.2.13 Relocation of Highway 14D

A some 6 km long stretch of Highway 14 D needs to be relocated due to the impoundment of Song Bung 4 Reservoir, and a 350 m long and 60 m high bridge will be constructed over Tru Vinh, a tributary to Bung River.

2.3
2.3.1

Comments and Suggested Modifications


Estimated Inflow for Song Bung 4 Hydropower Project

The estimated inflow for Song Bung 4 Hydropower Project given in the Feasibility Study has been reassessed based on rainfall-runoff modeling of the catchment area as given in the

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Hydrological and Hydrodynamic Modeling Studies (Volume VII of the Second Interim Report). It should, however, be noted that the basis for estimates of the inflow at Song Bung 4 site are very poor as no gauging station with long records exist for the catchment area of Bung River, but in nearby catchments with different rainfall and run-off characteristics. Water level and discharge measurements are, however, ongoing at Song Bung 4 site that will provide a much better basis for the estimated inflow once a sufficient length of records are obtained. In that case correlations with the discharge recorded at Thanh My can be used to prolong the recorded discharges at Song Bung 4 site. The estimated inflow given below should therefore be seen as preliminary and indicative only, and it is recommended that a new estimate of the inflow is performed during the Technical Design Phase when more data are available from the gauging station at Song Bung 4 site. The tentative annual average discharge at Song Bung 4 site is now estimated at 72 m3/s, as seen from the monthly discharges for the period 1978-2004 given below, compared to 88 m3/s in the Feasibility Study.
Tentative Monthly Discharges in m3/s for Song Bung 4 Hydropower Project Year Jan 1978 45 1979 54 1980 27 1981 97 1982 90 1983 27 1984 54 1985 40 1986 50 1987 30 1988 55 1989 44 1990 11 1991 61 1992 35 1993 47 1994 45 1995 37 1996 60 1997 90 1998 31 1999 105 2000 105 2001 86 2002 48 2003 41 2004 53 Mean 54 Min 11 Max 105 Feb 20 41 20 68 69 17 40 29 37 22 32 23 8.4 47 24 33 34 27 49 64 23 75 78 56 34 31 35 38 8.4 78 Mar 25 33 15 49 50 13 30 22 28 19 21 19 6.1 36 18 25 25 20 33 46 18 58 55 59 27 23 32 30 6.1 59 Apr 27 24 11 51 72 9.6 24 24 21 12 16 14 4.5 31 14 19 19 15 26 44 13 62 76 38 23 19 33 27 4.5 76 May 65.8 70.8 15.4 63.3 47.2 7.15 49.7 32.1 49.2 11.8 19.1 61.8 9.75 28.1 15.8 67.5 34.2 28.2 42.9 53.7 24.8 127 101 49.1 20.6 21 26.7 42 7.15 127 Jun 44 185 102 89 54 48 40 56 39 39 17 37 4.6 17 42 45 28 25 37 34 25 92 67 43 32 38 55 49 4.6 185 Jul 61 50 61 57 34 38 30 27 24 16 15 42 6.8 16 23 42 15 27 20 26 43 44 58 22 17 28 49 33 6.8 61 Aug 39 60 78 42 29 28 34 20 25 29 8.7 23 15 21 52 21 15 29 14 16 49 49 100 102 83 43 101 42 8.7 102 Sep 182 48 223 53 136 30 29 60 12 155 26 26 52 26 45 73 141 69 118 138 97 47 66 45 163 151 89 85 12 223 Oct 193 93 250 353 63 222 149 121 133 39 212 28 322 170 282 179 113 307 306 96 125 142 276 181 168 147 85 176 28 353 Nov 158 93.6 458 335 85.8 240 176 175 50 186 91.8 44.5 246 68 126 83.9 108 217 300 104 353 461 199 105 132 143 207 183 44.5 461 Dec 127 44 130 186 32 88 80 134 96 52 51 20 86 82 80 130 87 118 151 58 135 256 146 115 78 102 80 102 20 256 Mean 81.96 66.37 115.9 120.2 63.56 63.92 61.16 61.55 46.87 50.97 47.13 31.75 64.4 50.26 62.93 63.76 55.25 76.54 96.52 64.11 77.99 126.5 110.7 75.23 68.96 65.57 70.33 71.9 4.5 461 Min 20 24 11 42 29 7.1 24 20 12 12 8.7 14 4.5 16 14 19 15 15 14 16 13 44 55 22 17 19 27 Max 193 185 458 353 136 240 176 175 133 186 212 61.8 322 170 282 179 141 307 306 138 353 461 276 181 168 151 207

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A comparison of the average monthly discharges given above with the Feasibility Study is shown in the table below:
Comparison of Average Monthly Discharges in m3/s Study PPTA FS Difference Jan 54 75 -21 Feb 38 47 -9 Mar 30 33 -3 Apr 27 29 -2 May 42 39 +3 June 49 42 +7 July 33 32 +1 Aug 42 38 +4 Sep 85 66 +19 Oct 176 205 -29 Nov 183 277 -94 Dec 102 176 -74 Year 71.9 88.2 -16.3

As seen in the table above, the main differences are in the wet season, while the dry season discharges are fairly consistent for the two studies. 2.3.2 Technical Issues

A number of technical issues and suggested modifications that are recommended to be studied in the Technical Design Phase are discussed in Chapter 3 and summarized in the table below:
Structure Reservoir Item Issue Inflow Update Minimum Operating Level Review when new inflow data Initial Filling Planning Design RCC RCC Monitoring PMF Cofferdam Diversion culvert Closure Spillway Model Tests Gantry Crane Chute Chute Plunge-pool Plunge-pool Support System Support System Stability Analyses Penstock Diameter Location Steel-lining Support System Location Location Increased Relocation Reduced length Concrete lining Underground Alternative with short Headrace Tunnel Structure cast against the cut slope and bifurcation in rock Proposed changes Trial Mix Program Source of Pozzolan Update Stability Lower level Capacity Planning Omission Aeration device Dividing walls Dimensions Support of banks Unlined Unlined Reference Section 2.3.1 Section 2.3.3 Section 4.5 Section 3.3.2 Section 3.3.6 Section 3.2.5.5 Section 3.3.12 Section 3.3.3.1 Section 3.3.5.1 Section 3.3.5.1 Section 3.3.5.3 Section 3.3.3 Section 3.3.3.2 Section 3.3.3.5 Section 3.3.3.6 Section 3.3.3.3 Section 3.3.3.4 Sections 3.4.2 Section 3.4.3.2 Section 3.4.3.1 Section 3.4.4.1 Section 3.4.4.2 Section 3.4.4.2 Section 3.4.4.2 Section 3.5.4 Sections 3.5.3.2

Dam

Diversion Arrangements

Headrace Tunnel Surge Arrangement

Powerhouse

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Installed Capacity Energy Generation Dimensions and Functions

Review when new inflow data Review when new inflow data Modifications and relocation if Surface Alternative

Section 3.1.2 Section 2.3.5 Section 3.5.1

2.3.3

Minimum Operating Level

In the Feasibility Study a Minimum Operating Level (MOL) of +195 m is proposed for Song Bung 4 Hydropower Project, i.e. a reservoir regulation of 27.5 m. The average monthly energy generation for different minimum operating levels (based on daily values for the 27-year period 1978-2004 and assuming inflow according to Section 2.3.1) is given in the table below:
Average Monthly Energy Production, GWh, Without Compensation Flow MOL m +195 +200 +205 +210 +215 +220 Jan 44.9 43.8 44.0 44.1 44.1 44.1 Feb 33.3 38.9 35.3 35.3 31.6 27.9 Mar 32.1 33.5 30.6 27.0 27.2 23.6 Apr 31.2 29.5 27.4 28.0 20.9 21.2 May 34.6 36.2 40.5 34.8 36.1 33.0 Jun 35.1 40.7 39.4 41.0 35.9 36.5 Jul 31.8 31.4 30.6 29.3 30.4 27.0 Aug 35.2 34.0 34.1 33.2 35.0 32.4 Sep 42.6 37.4 39.8 42.9 49.4 51.9 Oct 68.0 71.1 74.1 80.0 82.9 82.8 Nov 80.5 84.8 87.3 86.0 85.9 87.2 Dec 67.8 65.7 67.8 71.9 73.9 76.2 Year 537.1 546.9 550.8 553.4 553.2 543.7

As seen in the table above the maximum average annual energy generation is delivered at a minimum operating level at around +215 m, with 553 GWh/year or 16 GWh/year higher than for a MOL of +195 m. The reason for a higher energy generation at a higher minimum operating level is that the loss in head due to higher drawdown of the reservoir is not compensated by the increased discharge due to the additional storage capacity. Based on the average annual energy generation only, a higher minimum operating level at +215 m should have been selected. The main difference between minimum operating levels of +215 m and +195 m is however the higher firm capacity that can be provided at the lower minimum operating level. This is evident from the table below showing the minimum monthly capacity during the dry season for minimum operating levels of +195 m and +215 m:
Minimum Monthly Capacity, MW, Without Compensation Flow MOL m +195 +215 Diff Feb 40.0 14.7 25.3 Mar 17.4 11.3 6.1 Apr 17.6 4.1 13.5 May 18.8 12.2 6.6 Jun 14.9 4.3 10.6 Jul 18.9 12.4 6.5 Aug 16.8 14.1 2.7 Sep 11.2 6.5 4.7

The firm capacity (the capacity at 90% reliability) amounts to 40 MW for a minimum operating level of +195 m compared to 21 MW for +215 m. Taking into account the firm capacity, or firm energy, in an economic evaluation gives a considerable higher viability for a minimum operating level of +195 m. The MOL of +195 m as proposed in the Feasibility Study is therefore supported. The proposed Minimum Operating Level at Song Bung 4 Hydropower Project needs to be updated in the Technical Design Phase when more data are available from the gauging station at Song Bung 4 site. Due to the fairly small active storage, the energy production calculations need to be carried out with daily time steps as with monthly time steps the energy generation will be overestimated by some 10%.

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2.3.4

Compensation Flow

As mentioned in the EIA Report a compensation flow bypassing the dam is recommended for environmental reasons, however, there is insufficient baseline data and analysis of aquatic and riparian ecosystems, and affected livelihoods on which to take an informed decision on a compensation flow. A one-year baseline study has therefore been commissioned to determine the fish catch of migratory species that would give a better understanding of the environmental and social benefits of a compensation flow release. In the following no release of compensation flow is assumed. Should however the study mentioned above show a need for a compensation flow, the main part of the lost energy (due to the compensation flow) can be regained by a small power plant at the foot of the dam, or with the installation of a small third unit in the powerhouse should a compensation flow be required only downstream of the power station. 2.3.5 Energy Production

The energy production of Song Bung 4 Hydropower Project has been calculated based on daily discharge values for the 27-year period 1978-2004 and the seasonal reservoir operating rules for a MOL of +195 m given in Section 2.4.2. For the fairly small active storage of Song Bung 4 Reservoir, it is important to use daily values in the energy production calculations instead of monthly as in the Feasibility Study, as monthly values will underestimate the spilling and thus overestimate the energy production. It is estimated that the energy production is overestimated by as much as 10% by using monthly values. The average monthly energy production for the period 1978-2004 is given in Table 1, giving the following average monthly energy production:
Average Monthly Energy Production, GWh Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year 44.9 33.3 32.1 31.2 34.6 35.1 31.8 35.2 42.6 68.0 80.5 67.8 537.1

As seen in the table above, the average energy production amounts to 537 GWh/year, while the firm capacity is estimated at 40 MW giving the following firm and secondary energies:
Firm and Secondary Energy, GWh/year Firm Secondary Total 351 186 537

The energy production of Song Bung 4 Hydropower Project will be increased to 541 GWh/year, i.e. with 4 GWh/year, should the Song Bung 2 Hydropower Project be implemented due to better regulation of Bung River. The regulation with Song Bung 4 Reservoir will also have a positive effect on the energy production for Song Bung 5 Hydropower Project should it be implemented, and is estimated to increase by 9 GWh/year. The energy generation from Song Bung 4 Hydropower Project needs to be updated in the Technical Design Phase when more data are available from the gauging station at Song Bung 4 site.

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2.4
2.4.1

Likely Operation Regime of Song Bung 4 Hydropower Project


General

The operating regime of Song Bung 4 Hydropower Project have been studied in the Feasibility Study, based on the hydrological pattern of the inflow and in the context of the power system, however, different operating regimes are given in different versions of the Feasibility Study. It should be noted that there is a difference between hydrological-operation and demandoperation of a power plant. In hydrological-operation the power and energy output from a power plant is determined by: Inflow to the reservoir Water stored in the reservoir Reservoir operation rules that determine how much water should be released to the power station, and is based on historical data and modeling to optimize the output.

The hydrological-operation determines the amount of water that is available for generation over a certain period (day, week, month), but not how this water should be distributed over the period. In the case of a daily period, this amount of water is equal if say 25 m3/s is generated during 24 hours, or 50 m3/s during 12 hours, or 100 m3/s during 6 hours. The actual operation, for instance over a day, is normally determined by the demand-operation that is based on, at each instance, the energy requirements in the power system. Even planned demand-operation changes, such as for the following reasons: Other power stations in the power system have to shutdown and other power stations have to cover the deficit in supply. Varying hydrological conditions in the country may change the operation pattern for some hydropower plants. Over the years, when new power plants are being commissioned, the operation pattern for older hydropower plants may change. When a power market is established in Vietnam it will be more profitable for the hydropower plants to operate at intermediate and peak loads, rather than at base load, as hydropower have the flexibility to operate according to the highest tariff.

It should be kept in mind that one of the advantages with hydropower is the flexibility in operation where the load can be increased or decreased in a very short time to respond to variations in demand. The energy calculations in the Hydrological and Hydrodynamic Modeling Studies (Volume VII of the Second Interim Report) have shown that it is possible to operate the Song Bung 4 Power Station for 24 hours/day for most of the time. This means that for most of the dry season, 40 MW can be produced contiguously. This is probably not a realistic scenario for the following reasons: One turbine needs to operate at 50% load for long periods that is not economical due to low efficiency. It is not consistent with the variation of the demand over the day, as in a national perspective hydropower aims at covering the intermediate and peak loads, and in the Central region base, intermediate and peak loads.

Consequently, it is prudent to allow for the possibility of peaking operation of Song Bung 4 Hydropower Project on a daily basis, weather for 6, 15 or 20 hours, and study and mitigate for the impacts this will cause in terms of varying downstream water levels. As it is not possible to

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study all alternative peaking scenarios, with different natural water levels at the onset of peaking, a number of representative cases have been studied in the Hydrological and Hydrodynamic Modeling Studies (Volume VII of the Second Interim Report), see also Section 2.5.3. An alternative could possible be to install one smaller and one larger turbine-generator units in the power station, where the smaller unit would be designed for the flow during the dry season. The disadvantages would be higher costs for the electromechanical equipment (1015%) and that there could be a need to close down the power station during maintenance of the smaller unit. Possible mitigation measures for varying downstream water levels could include the following: Construction of Song Bung 5 Hydropower Project for re-regulation of the intermittent outflow from A Vuong and Song Bung 4 hydropower projects. This would, however, not mitigate the variations of the some 10 km long river stretch between the power station and the rim of Song Bung 5 Reservoir. Warning system along Song Bung where the water level variations are the highest. Downstream of the confluence with Song Cai, the water level variations are probably acceptable for the safety of humans. Seasonal Reservoir Operation

2.4.2

For Song Bung 4 Hydropower Project with a fairly small active storage, 320 Mm3 at a MOL of +195 m and corresponding to 14% of the mean annual inflow, the possibilities for seasonal regulation is limited. Daily regulation is, however, possible throughout the year giving flexibility on a daily basis. The reservoir will be operated on a seasonal pattern aiming at filling the reservoir up to the FSL at the end of the wet season, and utilize the storage down to the MOL at the end of the dry season to complement the natural inflow to the reservoir. A typical variation of the reservoir water level during the year and the monthly average inflow is given in the figure below:
Figure 2-3. Monthly Average Inflow and Typical Variation of Reservoir Water Level
m a.s.l 225 Reservoir level 220 Mean inflow 175 Song Bung 4 Reservoir m3/s 210

215

140

210

105

205

70

200

35

195 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

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Different reservoir operation rules have been investigated in the Hydrological and Hydrodynamic Modeling Studies (Volume VII of the Second Interim Report), and the following reservoir operation rule is recommended: The reservoir water level for each month should aim at keeping the following minimum levels:
Month January February March April May June Reservoir Water Level, m +220 +213 +211 +208 +205 +202 Month July August September October November December Reservoir Water Level, m +198 +195 +198 +203 +212 +220

A target power output of 40 MW on a 24-hour daily basis can be produced if the actual reservoir water level is on par with the target water levels above. If the actual reservoir water level is higher or lower than the target water levels, the power output may be increased or decreased, respectively, compared to 40 MW on a 24-hour daily basis. Daily Reservoir Operation

2.4.3

The operation rules given above are on a seasonal basis, but the storage may also be used for daily regulation, i.e. the 40 MW on a 24-hour daily basis mentioned in Section 2.4.2 may be distributed during the day such that 80 MW may be produced during 12 hours, or the installed capacity of 156 MW during some 6 hours, in accordance with the demand. In the latest version of the Feasibility Study, the anticipated daily operation of Song Bung 4 Power Station is given for different months and scenarios as follows:
Daily Operating of Song Bung 4 Power Station, Hours/Day Month Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec 2011 Dry Basic 19 18 16 19 19 20 24 24 19 18 18 18 2011 Normal Basic 20 19 18 21 18 24 17 16 16 24 24 22 2011 Dry High 19 17 16 18 18 19 24 21 19 17 18 17 2011 Normal High 19 18 18 20 17 24 17 16 24 24 24 22 2015 Dry Basic 15 15 15 17 17 18 15 19 17 15 15 15 2015 Normal Basic 17 15 17 17 17 15 15 15 15 19 24 22 2015 Dry High 15 15 15 16 16 17 15 17 17 15 15 15 2015 Normal High 15 15 15 17 15 15 15 15 15 20 24 22

As seen in the table above, the operation hours varies between 15 hours/day and 24 hours/day. As, however, mentioned in Section 2.4.1 the actual daily operation pattern may vary depending on the actual demand in the power system, and it is prudent to allow for the possibility of peaking operation of the power station also for shorter operating hours. It should be noted that the downstream water level variations are mainly dependent on the following: The difference in turbine outflow during peaking.

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The natural water level in the river at the onset of peaking.

Consequently, the duration of the peaking is not important as even with a 20-hour peaking mode the water level at least down to Hoi Khach goes down to the natural water level before the onset of the next peaking period. The natural water level at the onset of peaking is important as the river channel widens at higher elevations and thus creates less water level variations. This would mean that peaking in the dry season gives higher water level variations compared to the wet season.

2.5
2.5.1

Downstream Hydrological Regime


General

The Final Report on the Hydrological and Hydrodynamic Modeling Studies was given in Volume VII of the Second Interim Report dated June 2006. In the following, a summary of the downstream hydrological regime is given with focus on Song Bung 4 Hydropower Project. The construction of Song Bung 4 Hydropower Project, and the regulation of Bung River with Song Bung 4 Reservoir, will have effects on the hydrological regime downstream of the dam and power station, both on the seasonal pattern and on the daily pattern. In this PPTA, the downstream impacts have in all aspects been limited down to the confluence between Vu Gia and Thu Bon rivers, based on the following: The Song Bung 4 Hydropower Project will have very little impact on both the water flow and water level downstream of this confluence. Downstream of the confluence to the coast there is a large variety of human activities, which create erosion and pollution, and which makes it impossible to assess any water quality impacts from Song Bung 4 Hydropower Project alone. The impacts on water flow and water levels downstream of the confluence are so marginal that they dont have any impact on stationary aquatic life. As long as the other rivers in Vu Gia Thu Bon River Basin are accessible for migratory fish species, Song Bung 4 Hydropower Project will marginally impact the migratory fish fauna downstream of the confluence. The wetland area between the rivers, which are flooded every year, is the lowermost spawning area for downward migrating fish from Song Bung. There are a large variety of activities in the area downstream of the confluence, which means that people living here are not so dependent on fish from the river, as people further upstream. It is easy to find an alternative support for life if the fishery for some reason should fail.

However, when the whole planned hydropower development in Vu Gia Thu Bon River Basin is implemented (8 projects), there will be impacts at least on fish biodiversity and fish production also in the river reach downstream of the confluence. 2.5.2 Changes in the Seasonal Regime

2.5.2.1 General As with all hydropower projects with a seasonal storage, the flow downstream of Song Bung 4 Hydropower Project increases in the dry season and is reduced in the wet season. The increase and reduction depends on the size of the active and flood control storages, respectively, and how the storages are operated.

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2.5.2.2 Seasonal Changes in the Dry Season The increase in the downstream dry season flow is illustrated by the following two duration curves assuming a compensation flow of 10% of the mean annual flow:
Figure 2-4. Duration Curves Downstream of Song Bung 4 Power Station
10000

BL BL+SB4 BL+SB4+SB2

1000

100

10

1 90% 80% 70% 60% 50% 40% 30% 20% 10% 100% 0% P

Figure 2-5. Duration Curves at Hoi Khach Downstream of the Confluence with Song Cai
1000

BL BL+SB4 BL+SB4+SB5 BL+SB4+SB2

Q(m/s)

100

10 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% P 0%

Note: In the duration curves above, BL denounces the baseline conditions with A Vuong Hydropower Project being constructed

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As seen from the duration curves above, the regulation of Song Bung 4 Reservoir increases the downstream flow in the dry season (flow with high duration). This is also evident from the table below showing discharges for different durations according to the figures above:
Discharges for Different Durations in m3/s Duration, % Downstream of Song Bung 4 Power Station Baseline After Song Difference Discharge Bung 4 15 13 2 18 37 19 21 48 27 23 48 25 29 48 19 37 49 12 45 51 6 Downstream of the Confluence with Song Cai Baseline After Song Difference Discharge Bung 4 50 59 9 61 85 24 68 94 26 76 99 23 93 110 17 115 124 9 141 143 2

95 90 85 80 70 60 50

2.5.2.3 Seasonal Changes in the Wet Season In the NHP Study, a Flood Control Level of +221.8 m was suggested for Song Bung 4 Hydropower Project, i.e. a drawdown with 0.7 m during the wet season to mainly accommodate smaller floods. The level, with a Flood Control Volume of 11 Mm3, was optimized considering lost energy production and benefits in reduced flood damages. In this PPTA, the reduction in floods due to Song Bung 4 Reservoir has been investigated for two floods, one in November 1999 with an extreme peak flow of some 4,000 m3/s at Song Bung 4 and one in October 2002 with a normal peak flow of some 550 m3/s. The reduction in outflow from Song Bung 4 Reservoir during the two flood events are given in the figures below:
Figure 2-6. Discharge Downstream of Song Bung 4 Dam November 1999

Baseline Baseline + Bung 4

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Figure 2-7. Discharge Downstream of Song Bung 4 Dam October 2002

Baseline Baseline + Bung 4

Note: In the hydrographs above, Baseline denounces the baseline conditions with A Vuong Hydropower Project being constructed

The water level at Hoi Khach, downstream of the confluence with Song Cai, is hardly reduced for an extreme event as the flood in November 1999, while for the normal flood in October 2002, the reduction is some 0.2 m. Using a Flood Control Level of +221.8 m at Song Bung 4 Reservoir gives an attenuation of the flow in a normal year, but the effects during extreme flood events are marginal. 2.5.3 Changes in the Daily Regime

As mentioned in Section 2.4.3, the Song Bung 4 Power Station will most probably be operated during part of the day only, implying that downstream water levels will vary on a daily basis depending on the outflow from the power station. As the variation of the downstream water level depends on a number of factors, such as the size of the outflow and the water level at the onset of the flow, a number of different scenarios have been studied in the Hydrological and Hydrodynamic Modeling Studies (Volume VII of Second Interim Report). A further complication is the unknown operation pattern of A Vuong Power Station that, if operated simultaneous with Song Bung 4 Power Station, could create large water level variations further downstream. The result of the studies on downstream water level variations is summarized in the table below, for details see the Hydrological and Hydrodynamic Modeling Studies (Volume VII of the Second Interim Report):
Case Downstream of A Vuong Power Station Water Level Max. Water Level Variation, m Rise in 1 hour, m 0.92 0.42 0.58 0.49 2.03 1.28 3.41 1.63 1.78 1.00 Hoi Khach, D/S of the Confluence with Song Cai Water Level Max. Water Level Variation, m Rise in 1 hour, m 0.32 0.15 0.15 0.12 0.62 0.37 1.00 0.48 0.53 0.30 Al Nghia, D/S of the Confluence with Thu Bon Water Level Max. Water Level Variation, m Rise in 1 hour, m 0.14 0.08

1 2 3 4 5

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The different cases above are defined in the following table:


Case 1 2 3 4 5 Month July 1990 July 2002 July 2002 July 2002 Dec 2002 Song Bung 4 Outflow Operation Compensation Outflow m3/s Hours Flow, m3/s m3/s 37 6 0-7.2 0 37 20 0-7.2 19 147 5 0-7.2 19 147 5 0-7.2 78 147 13 0-7.2 78 A Vuong Operation Compensation Hours Flow, m3/s 3 24 3 24 3 6 3 24 3

Longitudinal plots of the maximum changes of downstream water levels are shown for some cases below:
Figure 2-8. Longitudinal Plot of Maximum Water Level Variations Downstream of Song Bung 4 Power Station to Hoi Khach for Case 1

Figure 2-9. Longitudinal Plot of Maximum Water Level Variations Downstream of Song Bung 4 Power Station to Al Nghia for Case 3

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Figure 2-10. Longitudinal Plot of Maximum Water Level Variations Downstream of Song Bung 4 Power Station to Hoi Khach for Case 4

Figure 2-11. Longitudinal Plot of Maximum Water Level Variations Downstream of Song Bung 4 Power Station to Hoi Khach for Case 5

As seen above, peaking operation of the power stations significantly influences the water level variations in the downstream reaches of Song Bung 4. This is especially the case upstream of the confluence between Song Bung and Song Cai. Downstream of the confluence the effect is reduced, as the discharge from Song Cai and the wider cross-section of the river alleviate the water level variations. The water level variations can increase or decrease depending upon the operation of the A Vuong Power Station. It is suggested that the operation of the two power stations are closely coordinated as changes due to peaking in the dry season have significant impact on the downstream reaches. Starting the turbines of the two power stations at the same time this will be the worst case, causing a rapid water level variation. Starting the turbines at the two power stations sequentially and in a stepwise manner would alleviate rapid water level variations further downstream.

2.6

Multipurpose Aspects

The multipurpose aspects of Song Bung 4 Hydropower Project were studied in the NHP Study as summarized below: The irrigation benefit, due to increased flow in the dry season, was estimated at 0.2 MUSD/year.

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The flood control benefits, assuming a Flood Control Level of +221.8 m and a corresponding Flood Control Volume of 11 Mm3, was estimated at 0.3 MUSD/year

2.7

Risks

Song Bung 4 Hydropower Project will have several types of risks, including geotechnical, hydrological, and financial risks, and the design has taken appropriate steps to avoid or minimize all of them. In general, the design of the various project components is traditional and within accepted norms and practices. The dam height is in the mid range for this type of dam (RCC dams have been built higher than 190 m), and turbines with the proposed range of head and discharges have been installed in many projects before Song Bung 4. The hydrological risk during construction would be minimal as overtopping of an RCC dam is quite normal and construction can proceed once the flood has passed. Extreme floods normally last for less than one week in the wet season from September to December. The spillway of the Project is designed to pass the estimated Probable Maximum Flood (PMF). The power station will, at least during the dry season, be operated during parts of the day that could cause rapid variations in downstream water levels. Adequate measures have been proposed to mitigate these effects. The geotechnical risk at dam site, tunnel and powerhouse site is expected to be manageable due to the rather good geological conditions in the project area. During excavation of the tunnel, week rock formations may be expected in some areas where additional strengthening in the form of steel ribs will be required. Financial risks have been analyzed in the financial sensitivity analysis of the Project in respect of reduction in selling price, increase in capital cost, delay of commencement, reduction in selling price and reduced energy generation due to hydrological factors, and are manageable.

3
3.1
3.1.1

Technical Review of Feasibility Study


Overall Layout
General

In general, the layout of Song Bung 4 Hydropower Project as proposed in the Feasibility Study is well conceived by utilizing a sharp bend in Bung River downstream of the dam and creating a natural head of some 27 m by the 3.3 km long waterway. The natural length of the river from the dam site to the power station is some 5 km giving a gradient of 0.5% One may argue if this fairly low gradient of the river warrants the cost for the proposed waterway and an alternative with a power station at the foot of the dam was investigated in the updated Feasibility Study, and the proposed location of the power station was found to be more economic viable. There may be a possibility to move the power station further downstream by some 1.2 km before the river makes a sharp turn to the northeast. In this case the waterway need to be prolonged by some 250 m, that tentatively may cost an additional 1.8 MUSD, or an additional 1% of the total investment cost, given that all other costs are equal. According to the Feasibility Study the average head is 113.4 m, indicating that a downstream located power station could be viable if the difference in natural water level, between the proposed power station and the site some 1.2 km further downstream, would be higher than say 1.2 m. Water level measurements at these two locations have been carried out by PECC3, however, indicating a difference of only some 1.0 m.

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A number of alternative dam sites have been investigated both in the Pre-feasibility Study and in the Feasibility Study. In the Pre-feasibility Study by PECC3 from May 2004, 5 alternative dam sites were investigated, of which three (Dam Site Nos. 1, 2 and 3) were located in the vicinity of the now proposed dam site and two further upstream (Dam Site Nos. 4 and 5). Dam Site No. 1 and No. 2 were found to be the most viable, while Dam Site Nos. 4 and 5 were found non-viable, and were further studied in the Feasibility Study, where it was concluded that Dam Site No. 1B is the most viable. The proposed Full Supply Level of +222.5 m may be argued to be the practical maximum full supply level as the tail water level of the power station for the proposed upstream-located Song Bung 2 Hydropower Project is in that region, and power generation system simulations in the NHP Study also supported this level. The Song Bung 2 Hydropower Project utilizes a Uturn in Bung River and the proposed location of the power station gives the shortest waterway and hence the lowest cost. Relocation of that power station further upstream, to allow a higher undisturbed FSL for Song Bung 4 Hydropower Project, would only increase the cost and decrease the energy production of Song Bung 2 Hydropower Project. The Song Bung 4 Hydropower Project is designed in accordance with Vietnamese standards that would facilitate construction according to normal practice among Vietnamese contractors. Although the proposed Project would be feasible to construct, possible technical modifications have been suggested as given below that are recommended to be further studied in the Technical Design Phase of the Project. When designed properly and with the right construction methods, it is believed that new solutions on some of the components of the Project would improve the economy of the Project. 3.1.2 Considerations on the Installed Capacity

As mentioned in Section 2.3.1, the average discharge at Song Bung 4 dam site is now estimated at 71.9 m3/s, being nearly 20% lower compared to the average discharge estimated in the Feasibility Study of 88.2 m3/s. It should however be noted that the differences are mainly in the wet season. It may therefore be argued if the recommended installed capacity should still remain at 156 MW. In the table below the average annual energy production for Song Bung 4 Hydropower Project is given for the now estimated average discharge, for installed capacities of 156 MW and 180 MW, minimum operating levels of +195 m and +220 m, and compensation flows bypass the dam of 0%, 5% and 10% of the average discharge:
Minimum Operating Level m 195 Compensation Flow % of 71.9 m3/s 0 0 5 5 10 10 0 0 5 5 10 10 Installed Capacity MW 156 180 156 180 156 180 156 180 156 180 156 180 Energy Production GWh/year 537.9 553.2 508.6 522.6 479.3 492.4 525.4 542.9 494.5 511.2 463.4 479.4 Incremental Energy Production GWh/year 15.3 14.0 13.1 17.5 16.7 16.0

220

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In the NHP Study, the total investment cost for Song Bung 4 Hydropower Project were estimated for different installed capacities at a FSL of +222.5 m and a MOL of +195 m. Using the incremental total investment cost from the NHP Study and the incremental energy production in the table above, an economic evaluation using a discount rate of 10% and an energy value of 0.05 USD/kWh gives the following results:
Minimum Operating Level m 195 Compensation Flow % of 71.9 m3/s 0 0 5 5 10 10 0 0 5 5 10 10 Installed Capacity MW 156 180 156 180 156 180 156 180 156 180 156 180 Energy Production GWh/year 537.9 553.2 508.6 522.6 479.3 492.4 525.4 542.9 494.5 511.2 463.4 479.4 Incremental Energy Production GWh/year 15.3 14.0 13.1 Incremental B/C Ratio Cost MUSD 7.2 7.2 7.2 0.90 0.80 0.74

220

17.5 16.7 16.0

7.2 7.2 7.2

0.99 0.95 0.91

As seen in the table above it is not viable to increase the installed capacity to 180 MW, as the maximum B/C ratio amounts to 0.99. It may therefore be concluded that the recommended installed capacity of 156 MW in the Feasibility Study should be maintained, however, this should be confirmed in the Technical Design Phase when new estimates of the inflow to Song Bung 4 site are available.

3.2
3.2.1

Review of Geological and Geotechnical Conditions


Introduction

3.2.1.1 General The investigations in the pre-feasibility stage comprised five alternative locations of the dam axes of which Dam Sites No.1 and No.2 were selected for further study in the feasibility stage that resulted in Dam Site No. 1B being selected. The reservoir and headwork area is located on the eastern part of the Truong fold zone on the northern margin of the Quang Nam structural zone belonging to the northern margin of the Kon Tum uplift. The geological structure of the Project Area consists of the following formations: Nui Vu (PR3-1nv) Song Bung (T1-2sb) An Diem (T3nad) Igneous intrusions Quaternary loose sediments (aQiv)

Within the area of the headwork, the Song Bung lower sub-formation is encountered. The

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other formations are present in the reservoir area. 3.2.1.2 General Regional Geological Setting

The topography is originated from denudation, the slopes are inclined from about 350 to 450, and in some areas more gentle slopes are present varying from about 200 to 250. The level of the denuded mountainous surface in the region is on average about +800 m. Formations Present in the Region According to the regional Geological Map in scale 1:200,000, the distribution of the strata in the reservoir and headworks areas can be summarized as follows: The igneous sediment complex of the A Vuong (2 O1) formation. The rocks types are widely distributed in the area. The formation includes quartzite-like sandstone schist, cherty schist, basic effusive, and acidic effusive sediments. The rocks are strongly folded. Upper Devon Complex The Upper Devon Complex is distributed in narrow mountain gorges, largely distributed upon the A Vuong stratum. It un-conformably covers more archaic formations. This complex consists of granitoid formations of Lower Devonian Dai Loc Complex. The thickness is more than 700 m. Formations of this age include: Upper Paleozoic Granite granodiorite igneous formations (PZ3) of Ben GiangQue Son Complex, outcropping to the south of the dam site area. Lower Mesozoic formations. Largely distributed on Song Bung zone with total thickness of about 3,000 m, consisting of igneous sediments of Lower Triassic (T1-2). According to geological data, they are at the south-western part of Song Bung synclinal striking SW-NE. Upper Triassic (T3) - Nong Son Formation. Consisting of molasse formations rich in coal. The thickness is about 1,400 m and un-conformably covering archaic formations. Upper Mesozoic formations of An Diem Formation (J3nad). Consisting of terrestrial and terrigenous deposits, with a total thickness of over 1,500 m, and un-conformably covering archaic formations. Kainozoic formations consisting of granite, alaskite granite of the Ba Na Complex; basalt effusive and loose Quaternary sediments. In limited areas, Kainozoic formations develop in deposits of alluvium, proluvium and deluvium with limited thickness.

Hydrogeology According to the results of the Feasibility Study, the difference in hydro-geological conditions between the three alternative dam sites (1A, 1B and 2) is similar and can be summarized as follows: The climate in the area is hot and humid with heavy rains, so the vegetation cover is abundantly developed creating thick aquifers (near the surface ground water table) in the wet season.

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The thickness of the aquifers varies from 15 m to 30 m between the wet and dry seasons. The aquifers are generally unconfined and their drainage is fast due to the topography. The chemical composition of the aquifers is generally similar and has small mineralization level, not larger than 300 mg/l, in the Calcium-Magnesium Hydrocarbonate or Sodium-Potassium Hydro-carbonate forms. The chemical composition of the ground water makes it non aggressive to concrete.

3.2.1.3 Tectonic Structure The Song Bung 4 Hydropower Project is located on the eastern margin of the Truong Son geoanticline, near the Tha Khet-Tra Bong fault. This fault resulted in three tectonic structures: the Truong Son zone, the Kaledonite-Sekong structural zone and the Kon Tum uplift. Figure 3-1 below shows a tectonic map covering the area:
Figure 3-1 Tectonic Setting

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The Project Area is bounded by four deep faults that could be the source of seismic activity: Rao QuanA Luoi (Grade IIC), Truong Son fault in the West, An Diem Hoi An (Grade IIC) in the North and Tam Ky Phuoc Son (Grade IIIC) in the South as given below: The Rao Quan-A Luoi fault, with a length of about 100 km, is located along the young valley of A Luoi extending to Song Bung in a Northwest Southeast direction. This fault manifests high activity, with uplift - extended crust mechanism prone to cause moderate earthquakes, however, landslides might be triggered. The dam area is located about 4 km from the Rao Quan A Luoi and Dak Krabat faults and the power house some 7 km from the Rao Quan A Luoi fault. The Tam Ky Phuoc Son fault extends along a direction sub parallel to the latitude from Song Bung to Phuoc Hao, striking in a Northwest Southeast direction and going along the Song Chang valley to the north of Tam Ky Town to the Eastern Sea. The total length of the fault zone is more than 125 km. The shortest distance from Song Bung 4 Hydropower Project is about 3 km. The An Diem Hoi An fault extends about 125 km and is characterized by changes in the strike direction. It has a 650 North-eastern strike going through A-So to TamPrang. Thereafter the fault changes direction and goes parallel to the latitude to Thanh Den. From Thanh Den to Song Vu Gia, the fault again strikes along a 300 northwestern direction, finally returns and goes parallel to the latitude from Ha Nha through Ai Nghia and out to the Eastern Sea. The depth of the fault is about 30 km.

Within the Project Area there are other faults classified as grade III and IV and fractures of grade V, VI and VII according to the classification system in the table below:
Classification of Faults and Fractures Grade I-II III IV V VI VII VIII Type and Character of Fault Faults Small faults or large fractures Joints of various gengsis Regional Large Medium Medium Small Very small Length Tens of km Km-tens of km 200-3,000 m 100-1,000 m 10-100 m 1-3 m <1 m Width Hundreds of m Tens of m 0.5-2.5 m 2-50 cm 2-20 mm 0.5-2 mm <0.5 mm Zone of Influence Hundreds of m 10-100 m 10 m 0.5-1.5 m

In the headwork area there are two tectonic fractural zones of grade IVa (IVa-1 and IVa -2) and 31 tectonic fractural zones of grade IV. In addition the activity of faults has resulted in volcanic activity forming effusive mafic rocks, primarily concentrated to the Triassic period. 3.2.1.4 General The assessment of the earthquake activity at the Project Area should be based on the Conclusion and Recommendation in the report The Assessment of earthquake intensity at the area of Song Bung 2 and 4 Hydroelectrical Project (October 2004), compiled by Institute of Geophysics. Seismicity

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According to this report, three conclusions are stated as follows: The headworks of Song Bung 4 Hydropower Project are located at a structural zone fairly stable on tectonics and geodynamics. All tectonic faults passing through the project area of Song Bung 4 Hydropower Project manifest low activity. The geological, tectonic and geodynamic conditions of the project area of Song Bung 4 Hydropower Project are feasible for the construction of hydropower projects. The middle zone of the central part of Vietnam is located in the stable continental region - extended crust - with low earthquake activity. According to historically recorded data from the year 1666 until present, only 17 earthquake events with magnitude equal to or greater than M = 4.0 (Richter) have occurred, in which the strongest was M > 5.0 (Richter) (M= 5.7 according to calculation by Institute of Geophysics occurring at a distance of about 300 km from the dam site). No recorded earthquakes with magnitude M > 4 (Richter) have occurred within a radius of 50 km from Song Bung 4 dam site.

Comments Based on the prevailing situation described above, it is recommended that the MCE (Maximum Credible Earthquake) of this area should be M = 5.7 (Richter). The following data are recommended to be used in the design of Song Bung 4 Hydropower Project: The MDE (Maximum Design Earthquake), corresponding to a return period of 2,000 years, should be: PGA (Peak Ground Acceleration) = 126.6 cm/sec2 (0,127g), corresponding to grade VII - MSK 64, to be used for foundation on rock. The OBE (Operating Basis Earthquake), corresponding to a return period of 145 years, should be: PGA (Peak Ground Acceleration) = 42.5 cm/sec2 (0,043g), corresponding to grade VI MSK 64, to be used for foundation on rock. 3.2.1.5 General Slope Stability in the Project Area

The main cut slopes in the Project Area will be excavated at the following locations: In the area of dam abutments In the area of the intake of the headrace tunnel In the area of the surge shaft In the area of the powerhouse edQ = Residual soil IA1 IA2 = Completely weathered rock = Highly weathered rock

The different strata in a rock-soil formation and their denomination are presented below:

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IB IIA IIA IIB


1 2

= Weathered rock = Slightly weathered, fractured rock = Fresh, slightly fractured rock = Fresh rock

In the investigations, the strength properties of the soil and rock strata have been determined. The strength parameters proposed to be used in the design of the cut slopes are presented in the table below:
Strength Properties of the Soil and Rock Strata Formation T1-2sb12 Stratum edQ IA IB IIA1 IIA2 IIB edQ IA IB IIA1 IIA2 tg 0.36 0.45 0.70 0.75 0.80 0.85 0.45 0.65 0.70 0.75 Cohesion, kPa 22 25 150 200 250 300 21 25 120 150 200

T1-2sb13

The slope inclinations adopted for the various strata are as follows: edQ: IA: 1:2 1:1

IB, IIA and IIB: 1:0.6-0.7

Comment The design of the slopes is considered appropriate and will give a reasonable factor of safety. It is, however, important that measures are taken in order to drain the slopes and take care of the surface water. Diverting water away from the slope by introducing ditches is often feasible. 3.2.1.6 General Performed Investigations

The investigations performed in the pre-feasibility and feasibility stages are as listed below:
Performed investigations Items Geological Mapping Scale 1:50,000 Scale 1:10,000 Scale 1:2,000 Drilling On land In water Excavation Geophysical Exploration Traverse Resistivity Seismic Refraction Unit km2 km2 km2 m m m m3 Point Point Point Pre FS 120 25 693.7 500 93.7 1631 362 182 180 Pre FS Supplementary 33 25 940 700 240 1635 1192 817 375 2.4 2100 1940 Quarries: 160 878.9 845 500 345 FS Total 153 50 2.4 3733.7 3140 493.7 4144.9 2399 1499 900

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Vertical Electrical Sounding Permeability Testing Lugeon Pouring in borehole In test pit Laboratory Testing Undisturbed soil samples Intact rock samples Water samples Rock samples for lithological analysis Sand and gravel Remoulded samples Compaction Spectrum analysis Simple chemical analysis Grain size analysis Installing standpipe

Point Section Time Time No No No No No No No No No No No

760 48 10 49 59 81 40 71 19 20 9 5 5 9 158

186 100 40 70 70 85 22 44 4 20 10

153 161 30 60 32 83 17 100 20 20

1099 309 80 179 161 249 79 215 23 60 39 5 5 9 418

180

80

Comments The performed investigations are considered to give a good overview of the geological conditions within the Project Area. All core-drilled boreholes are vertical and the prevailing fault systems are also nearly vertical, thus the drillings are not giving accurate information on the nature and width of the faults. It is proposed that, in the Technical Design Phase, inclined holes are drilled in the dam axis from the riverbanks penetrating the rock below the riverbed. Further, the width and nature of the grade IVa-1 fault should be determined by drilling an inclined hole. It is recommended that the drilling be performed using double core barrel in order to obtain good quality cores, especially in sections with weaker rock. Along the tunnel only one drill hole has been performed, and it is proposed that some more holes are drilled in order to establish the distribution of strata IB, IIA and IIB. An inclined hole is recommended to be drilled on the grade IVa-2 fault in order to determine its width and nature. Investigation on possible sources of pozzolan, and testing its properties, should also be performed in the Technical Design Phase. 3.2.2 Geological Conditions in the Project Area

3.2.2.1 General The project area is located in the lower part of the Song Bung formation of Lower-Medium Triassic. Three members are present as follows: T1-2sb13, Member 3, encountered in the northern part where the powerhouse is located. The material is violetish brown sandy siltstone with inter-bedded bluish grey sandstone (40%). T1-2sb12, Member 2, encountered in the intermediate part affecting dam site alternatives 1A, 1B and the headrace tunnel. The material is bluish grey sandstone with inter-bedded violetish brown sandy siltstone (25%). T1-2sb11, Member 1, encountered in the southern part where dam site alternative 2 is located. The material is bluish grey sandstone with inter-bedded violetish brown sandy siltstone (10%).

The prevailing geology within the Project Area, with the competent sandstone and siltstone of

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the Song Bung formation, is favourable for the construction of a hydropower project. The investigations have been performed having in mind that various dam types may be considered. Foundation conditions, as well as availability of borrow areas and quarry sites, have been investigated such that different alternatives could be compared. 3.2.2.2 General Dam Sites

Three alternative dam sites (1A, 1B and 2) have been studied in the Feasibility Study, all located along a 700 m long section of the river. They are located in Member 1, T1-2sb11, of the lower part of the Song Bung formation. All three sites are affected by the fault zone IVa-1. The northern site 1A is also affected by the fault IV-2. The intermediate site 1B is also affected by the fault IV-1. The upstream site 2 is in addition to IVa-1 also affected by the faults IV-8, IV-12, IV-13 and IV-15. Weathering Profiles Dam Site 1A The thickness of the superficial strata, edQ and IA, varies between 10 and 30 m in the abutments. The underlying stratum IB has a thickness in the order of 20 m. This stratum outcrops in the riverbed. Stratum IIA is encountered at a depth of 35-50 m in the abutments and between 20 and 30 m in the riverbed. Dam Site 1B The thickness of the weathered strata, edQ and IA, varies between 10 and 20 m in the abutments. The underlying stratum IB has a thickness varying between 20 and 30 m in the abutments and 10 m in the riverbed where it is outcropping. Stratum IIA is encountered at a depth of 45-50 m in the abutments and at a depth of 10-15 m in the riverbed. Dam Site 2 In the left abutment the thickness of edQ and IA is in the order of 10 m, and in the right abutment in the order of 20 m. The thickness of stratum IB is in the order of 20-25 m in the abutments and in the order of 10-15 m in the riverbed where it is outcropping. The depth to stratum IIA is in the order of 35 m in the abutments and 10-15 m in the riverbed. Comments The geological conditions at the three dam sites are similar considering rock formation and weathering profile. 3.2.2.3 General Power Waterway

As Dam Site 1B was selected in the Feasibility Study, see Section 3.3.1.4, the shorter tunnel (alternative 1) will be valid. The tunnel will have a length of 3,046 m. The blasted tunnel will have a horseshoe section with a span of 7.5 m. The intake and upstream part of the tunnel will be located in Member 1, T1-2sb12 of the lower part of the Song Bung formation and the downstream part of the tunnel will be located in Member 3, T1-2sb13. One drill hole with a depth of 70 m has been sunk reaching the tunnel elevation, about 680 m from the intake. At a depth of 50 m a grade IV fault (IV-3) was encountered in which the rock of stratum IIA was heavily fractured with a RQD of 50%. Along the tunnel alignment a total of 9 faults of grade IV and one fault of grade IVa (IVa-2) are present. Several grade V fracture zones will be penetrated.

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Comments The tunnel will be located in the fresh rock of strata IIA and IIB, which is considered favorable from tunneling point of view. The grade IV and V faults, which will be penetrated, will require more support and might to some extent reduce the progress rate of the tunnel excavation. However, the faults are not expected to cause any major problems. 3.2.2.4 General Power House

The powerhouse will be located in Member 3, (T1-2sb13), of the lower part of the Song Bung formation. It is planned to be an aboveground structure. The downstream part of the powerhouse foundation will be affected by a grade IV fault (IV-1). Comments The foundation conditions for the aboveground powerhouse are considered favorable with the structure founded in stratum IIA. Other solutions as to the location of the powerhouse are discussed in Section 3.5.3. 3.2.2.5 Reservoir Area Water Tightness of the Reservoir The rock formations present in the reservoir area are the Nui Vu, Song Bung, An Diem and the Ben Giang-Que Son. The oldest formation encountered within the reservoir area is the Nui Vu formation consisting of schist, quartz schist. The Song Bung formation comprises bluish grey sandstone interbedded with violetish brown siltstone. The An Diem formation consists of quartz arkose sandstone and gritstone. The Ben Giang-Que Son formation consists of igneous rock, mainly granodiorite. No limestone formations are present within the reservoir area. The weathering zones in the formations have thickness as indicated below:
Thickness of Weathering Zones Formation Nui Vu Song Bung An Diem Ben Giang-Que Son eQ 2-4 5-10 2-5 3-5 Thickness, m IA 8-10 10-15 10-12 10-12

The permeability of eluvial-deluvial and eluvial soils is in the order of 3x10-6 m/s, in sandy soils 3x10-4 m/s. The permeability of the fractured rock is in the order of 2x10-6 m/s. However, some fault zones belonging to grade III and IV cut across the reservoir area and might cause zones of higher permeability. On the left side of the reservoir the valley of A Vuong River is located. The distance to the water divide is between 1 and 5 km. The ground water level at the divide is located between El. 750 m and El. 770 m, thus at a considerably higher elevation than the reservoir. The valley of Thanh River is located on the right side of the reservoir. The ground water level at the divide is located at an elevation higher than El. 1,000 m, i.e. above the reservoir level. Leakage from the reservoir is therefore restricted to the abutments and the foundation of the dam where high gradients are present.

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Preliminary calculations indicate that the leakage in this area will be in the order of 120 m3/day provided a grout curtain is installed. This leakage is in the order of 0.2 of the expected evaporation from the reservoir. Landslides in the Reservoir The occurrence of landslides is mainly affected by: Inclination of slope Soil properties Variation in water level Wave height

In general the slopes have an inclination of 30-35, but within some areas they are flatter, 2025. The strength of the alluvial soils is in the order of =18 and cohesion of 20 kPa. The maximum wave height is in the order of 1.8 m. Four areas are considered most exposed to sliding with the following estimated volumes: Area 1 on the left bank opposite the Nang stream with a length of 1 km. The inclination of the slope is in the order of 20-30 and the wave height 1.8 m. Preliminary calculations indicate that the width of the slide area is in the order of 10.5 m and the depth 2.5 m involving a slide volume of 21,000 m3 after 10 years. After 100 years the width has increased to 120 m and the depth to 4.5 m, with a slide volume of 540,000 m3. Area 2 on the right bank of the reservoir and on the left bank of Ta Vin stream with a length of 1 km. The inclination of the slope is 25-32 and the maximum wave height 1.8 m. Preliminary calculations indicate that the width of the slide area is in the order of 12.5 m and the depth 2 m involving a slide volume of 25,000 m3 after 10 years. After 100 years the width is 108 m, the depth 5.5 m and the slide volume 575,000 m3. Area 3 on the right bank of the reservoir and on the right bank of Ta Vin stream with a length of 1 km. The inclination of the slope is 20-40 and the maximum wave height 1.5 m. After 10 years the width of the slide area is 10 m, the depth 2 m and the slide volume 20,000 m3. After 100 years the width is 120 m, the depth 3.5 m and the slide volume 425,000 m3. Area 4 on the right bank of the reservoir is located 1 km upstream of dam axis 2 with a length of 1 km. The inclination of the slope is 30-35 and the maximum wave height 1.5 m. The width of the slide area is 12 m, the depth 2 m and the slide volume 24,000 m3 after 10 years. After 100 years the width of the slide is 105 m, the depth 4-5 m and the slide volume 490,000 m3.

The total slide volume after 10 years may be estimated at some 150,000 m3 and after 100 years at some 3 million m3. Considering the large dead storage of some 170x106 m3 this should be acceptable. 3.2.3 Considerations on the Design of the Rock Support in Tunnels

3.2.3.1 General The rock support described in the following is the temporary support required to stabilize the rock surrounding the opening prior to the installation of a cast concrete lining. In case no cast lining is considered, the walls and roof are proposed to be covered by a layer of fiberreinforced shotcrete giving a minimum thickness of 50 mm.

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As a basis for the design of the support the rock mass is divided in rock classes with each class requiring a specified support. Normally 4-5 rock classes are introduced. The most common classification systems are the RMR and Q systems. In the RMR system the following classes might be defined:

Rock class I, RMR=100-81, very good rock Rock class II, RMR=80-61,good rock Rock class III, RMR=60-41, fair rock Rock class IV, RMR=40-21, poor rock Rock class V, RMR<20, very poor rock

The support input in the various classes might be as described below. It should however be noted that the proposed support is tentative and might have to be adjusted to fit the geological conditions encountered during construction.
Rock Class I II III IV V Crown Bolts l=3m c/c 3.5m, shotcrete 30mm where required Bolts l=3m c/c 2.5m, shotcrete 30-60mm Bolts l=3m c/c 2m, shotcrete 60mm reinforced by mesh or fibers Bolts l=4m c/c 1.8m, shotcrete 100mm reinforced by mesh or fibers Bolts l=4m c/c 1.5m, shotcrete 150mm reinforced by mesh or fibers Walls Spotbolting l=3m Spotbolting l=3m Bolts l=3m c/c 2m, shotcrete 60mm reinforced by mesh or fibers Bolts l=4m c/c 2m, shotcrete 100mm reinforced by mesh or fibers Bolts l=4m c/c 1.5m, shotcrete 150mm reinforced by mesh or fibers

All bolts should be fully grouted and have a diameter of 25 mm. The shotcrete should have a compressive strength of at least 25 MPa. In Rock Class V additional reinforced shotcrete arches or steel sets might be required, also a temporary invert slab might have to be introduced, see below. The mesh mentioned in the table above is 6 mm c/c 150 mm and the fiber content giving equal bearing capacity is 60 kg/m3. The major part of the tunnels is considered to be located in rock belonging to rock classes II-III and can be excavated with normal lengths of the rounds of about 3 m. The progress per heading is dependent on the equipment available, but can be expected to be in the order of 20-30 m/week at each heading. In case poor rock conditions are encountered the advance will be reduced. Weak rock might be encountered at the adit tunnel portals and for limited parts of the headrace tunnel where it is cut by grade IV faults. 3.2.3.2 Support and Excavation Technique in Class V Rock Rock belonging to Class V might be encountered in the faulted zone IVa-2 and in the portal areas. In order to perform the excavation as fast and economically as possible, various support methods have to be used and the design of the support has to be adjusted to the actual conditions. A key to successful excavation in weak rock is the use of observations. In front of the tunnel, probe holes are drilled in order to establish the presence of weak zones before they are reached by the tunnel front. The behavior of the installed support should be kept under observation. Further monitoring of the deformation pattern of the walls might be introduced. Four factors that will be discussed in the following are of importance when excavating in poor rock, namely:

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Reduced advance Reduced section Spiling Timing

It should be noted that Rock Class V covers a wide range of rock conditions with highly varying stand-up times. The support measures indicated above are to be regarded as guidelines. 3.2.3.3 Active Span and Stand-up Time While performing an excavation in poor rock, the advance rate is limited by the stand-up time of the rock mass and the maximum active span. With stand-up time is meant the time an unsupported excavation remains stable without any downfall. A design criterion can be stated as: Time before stabilization < Stand-up time Active span is the shortest distance between two active supports in an excavation. These supports are normally either the tunnel walls or the tunnel face and the end of the installed support. Bieniawski has compared the stand-up times for unsupported excavation spans predicted by Scandinavian, South African and Austrian rock mass classification systems. The indicated ratings are according to the RMR-system, see the figure below. If a prediction of the stand-up time for an excavation is required, then the actual RMR value has to be determined initially. Stand-up time and the maximum unsupported span might then be estimated by interpolation in the following graph:

Stability of Excavation due to Separate Factors In poor and very poor rock it is often one single property that determines the behaviour of a rock mass rather than the overall rating. While excavating Class IV-V rock, it is important to be observant on sudden variations in ground conditions. Properties that may vary considerably in
3.2.3.4

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the same rock mass are clay content, amount of active clays, amount of crushed material, amount of water and water pressure. All these parameters can affect both the long and shortterm stability. Concerning the short-term stability of an excavation, special attention should be paid to the water pressure. A local concentration of pore water pressure might build up behind more impervious strata. This pressure might force the rock material into the tunnel and cause a running-like failure. In case of crushed or gouge material, a very short stand-up time can be expected and a running or flowing failure might follow immediately after the blasting. Ravelling and slaking might also occur if clays are present in joints. Considering the long-term stability, effects causing creep are of most concern. 3.2.3.5 Support Methods In Class IV-V rock, the method of advance has to be chosen carefully in order to fit current rock conditions. In the following, methods to excavate and support poor rock are discussed. A difference has been made between normal and special conditions. Withspecial condition is meant a condition where the tunneling has to be carried out extra cautiously. Rock Support under Normal Conditions The first step to increase the stability in poor rock is to reduce the advance. The advance is governed by the stand-up time of the rock and the time it takes for the installed support to get sufficient strength. In very poor rock the advance might have to be reduced to 1 m or even less. When tunnelling Class V rock of better quality with reduced advance, it is normally sufficient to use ordinary support with systematic bolting and shotcrete. Use of reduced advance may also be necessary in Class IV rock of poor quality. Spiling In order to increase the stand-up time, spiling is recommended. Un-tensioned rock bolts are normally used as spiles with a distance between centers equal to 30-50 cm. It is recommended to install spiles with a length of 4-6 m, where possible. Shorter spiles might be required in case the holes do not stand open. If very weak rock is encountered it might be possible to hammer the bolts in place. The spiles should be inclined about 15 from the tunnel axis. Where stability problems occur in the walls, also these should be protected by spiling, Spiling cannot serve as a primary support on its own, but has to be supported at the tunnel face by shotcrete arches or steel sets. Divided Front and Support by Arches If instability of the front occurs, a significant improvement can be achieved by dividing the front into gallery and bench. It is suitable to make the bench at least some 10 m long. In weak rock, systematic bolting and shotcreting may not be sufficient and arches have to be installed. The arches might either be shotcreted or consist of steel sets. The shotcrete arches might be reinforced in various ways. The possibilities are fiber reinforcement, a combination of fibers and wire mesh, reinforcement bars or lattice girders. It should be noted that fibers should not be used in the same layers that are reinforced by nets or bars. If the stand-up time is too short to allow the shotcrete to harden, steel sets have to be used. They should be erected as close to the face as possible and placed on an axial beam fastened to the tunnel wall. When the bench is excavated the forces are transferred down through the axial beam until vertical beams have been placed immediately under the steel arch.
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An improvement of the stability situation might be achieved by introducing invert struts. Multiple Drifts For extremely poor conditions with very short stand-up time and problems with the stability of the face, multiple drifting might be necessary. In this excavation method the gallery is divided into parts. Regarding the excavation of the gallery, the following method could be used: when one part is excavated, lattice girders or ordinary steel sets should be installed as primary support at the periphery wall as soon as possible. The wall facing the rock mass that is about to be excavated can be stabilized with a shotcrete lining. While part two is excavated, the shotcrete wall is left as a pillar support in the middle. In some situations it may be necessary to use a temporary invert strut to stabilize the floor of the gallery. When the entire gallery is excavated and primary or permanent support is erected, the shotcrete wall is removed. The bench should be excavated in a way that allows installation of the final support to form a closed section. Since the bench stabilizes the face, the length should always be at least 10 m. Rock Support under Special Rock Conditions Flowing Ground When high water pressures with large amounts of water are built up in the rock mass, flowing ground might be a problem. Flowing ground might occur in zones with heavily crushed material. Since the damage caused by flowing ground can be extensive, it is important to analyze correctly the information obtained from the feeler holes drilled in front of the tunnel. Stabilization of flowing ground is a very difficult work, which normally is performed in three steps. If the water flow is too intense to allow grouting, drainage of the rock must be performed as a first step. When reasonable pressure and flow are achieved, grouting can be performed. For safety reasons it is important to make sure that a good grouting result is achieved fairly far into the rock mass before further excavation is performed. As a last step the actual excavation is carried out. Normally, the use of multiple drifts is recommended for this kind of rock. The monitoring of water pressure, grouting results and water flow is important in order to secure a safe excavation. In the zone of the grade IVa-2 fault a rapid installation of the support might be required and then installation of steel sets might be suitable. The steel sets should be completely covered by fiber reinforced shotcrete. The thickness of the invert slab should be in the order of 300-500 mm. 3.2.3.6 Excavation and Support at Tunnel Portals When planning the excavation for a tunnel portal it is important that a feasible location in plan has been established by drillings. In order to reduce support requirements, the portal should be located in IB rock or preferably in II rock. Should the selected portal location be found to be located in poor rock, then either re-excavation starting from the top or time consuming tunnel excavation with heavy support has to be carried out. In the following it is assumed that rock of acceptable quality has been reached. The first step is to create a rock surface from which the tunnel excavation can start. The inclination of the slope above the portal area should be chosen in a way giving an over-all factor of safety of 1.5 for permanent slopes and 1.3 for temporary slopes. The cut slope in rock forming the portal rock should be stabilized. The inclination of this slope should be selected considering the rock conditions. Normally slopes steeper than 5:1 should be avoided. In order to stabilize the slope and thus preventing rock falls it is advisable to apply a layer of shotcrete with a thickness of 30-50 mm. If the slope is of limited height, say 5-10 m, netting might be possible for temporary slopes. Rock-bolting may be required. When the rock face is stabilized the preparations for the portal can proceed as follows:
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Start with shotcreting a 1m wide zone along the arch and wall perimeters of the portal. The shotcrete should preferably be reinforced with fibers (60 kg/m3 shotcrete) and the thickness of this shotcrete layer should be 100 mm. The next step will be the installation of spiling bolts along the perimeter of the arch. The spiling bolts should be placed 0.2 m outside the opening proper. The spiling bolts should have a length of 4 m, be spaced 0.5 m and be inclined 15-20 from the tunnel opening. The bolt diameter should be in the order of 25 mm and be fully grouted. The excavation can now start with drilling of the first round. The round should be given a length of maximum 2 m. Drilling and charging should be performed carefully resulting in smooth blasting, which should result in a minimum disturbance of the rock. The tunnelling muck is now removed and scaling carried out. After this operation, shotcrete with fibers with a layer thickness of 100 mm is applied in the arch and 50-100 mm on the walls. Another set of spiles with a length of 4 m is then installed from the face. The second round is also given a length in the order of 2 m and after blasting, mucking, scaling and supporting this round it can be decided whether it is necessary to continue with installation of spiles. If spiles are discontinued, it is recommended to proceed with reduced length of rounds for at least 5 additional rounds. Installation of bolts should be carried out in accordance with the rock support classes presented above. It is, however, recommended that the thickness of the shotcrete be kept as for the initial rounds.

A prerequisite for this method of starting the tunnelling work is that the rock mass has a standup time allowing the installation and curing of the shotcrete. In case the rock quality is so poor that the required stand-up time is not available, a method that gives more or less immediate support is required. The support method then to be considered is installation of steel sets. The preparation of the portal surface should be performed as described above. Also installation of spiling to the same length of 4 m is recommended. The length of the rounds has to be reduced to tentatively 1 m, which will also be the tentative spacing of the steel sets. The excavation has to be performed carefully as it is important that the sets have contact with and supports the rock. The rock between the sets is preferably supported with shotcrete. Is this not feasible, lagging has to be installed as support of the rock. When planning the excavation of the tunnel it is important that the required space is available for the temporary support with shotcrete and steel sets and the permanent lining. 3.2.3.7 Comment It is recommended that the rock be classified according to the RMR or Q system. The temporary support is proposed to be given a design in accordance with that indicated above. It should be noted that the suggested support is tentative and has to be adjusted to the conditions encountered. 3.2.4 Considerations Regarding Unit Rates of Underground Works

The unit rates for underground works may be estimated as follows assuming international competitive bidding:
Item Raise Boring Tunnel Excavation Fiber-reinforced Shotcrete Bolts Sub-item Establishment Boring Stoping Unit m m3 m m3 m Unit Rate, USD 25,000 2,000 60 3,125 375 12.5

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3.2.5

Construction Material

3.2.5.1 General Investigations have been performed in order to establish that sufficient quantities of material for the different dam types are available. For the selected alternative with a RCC dam in the Feasibility Study, the types of materials required are cohesive soil and rock-fill for cofferdam construction, rock for production of coarse aggregates (and possible fine) for the concrete, and sand to be used as fine aggregate for the concrete. 3.2.5.2 Performed Investigations The investigations performed in order to establish the quality and quantity of the alluvial soil have comprised the excavation of 30 test pits to depths varying in the range of 3.5-4.5 m. The rock quarry site was investigated by means of 4 core-drilled holes, drilled to a depth of 40 m each, and two geological sections have been constructed. Eight samples were extracted for laboratory testing. The sand borrow area was investigated earlier for the A Vuong Hydropower Project by PECC2. The area is located on Cai River at a distance of 25-30 km from the power station area. The length of the area is in the order of 5-10 km and the width some 100 m. The area was investigated by 60 drill holes with depths varying between 3 to 5 m. 3.2.5.3 General Borrow Areas

Soil borrow area A is located on the right bank upstream of dam site 2. It is located on a hillside between El. 350 m and El. 550 m with an area of 49.2 ha. The thickness of the topsoil to be removed is 0.5 m and the thickness of the layer to be explored is in the order of 3.5 m. The available quantity is 1.7 Mm3. Soil borrow area B is located on the left bank upstream of dam site 2. It is located on a hillside between El. 180 m and El. 280 m with an area of 4.32 ha. The average thickness of the topsoil is 0.5 m and the thickness of the layer to be explored is 3.5 m. The available quantity is 150,000 m3. Soil borrow area C is located on the left bank to the left of dam site 1B. It is located on a hillside with a slope inclination varying between 30 and 40 between El. 160 m and El. 280 m. The area is 4.6 ha with a topsoil thickness of 0.5 m and a thickness of the layer to be explored in the order of 3.5 m. The available quantity is 160,000 m3. The soil of the three borrow areas is alluvial material on bedrock of Members 1 and 2 of the Song Bung lower formation. Their soil mechanical properties are similar. Examples on values determined in the laboratory are given in the table below:
Atterberg Limits wl % Ip % Max Average Min 42.4 38.1 31.1 18.8 15.2 11.7 Proctor Compaction Optimum Water Dry Density Content, % t/m3 23.1 1.83 20.1 1.70 16.4 1.64 Shear Strength Cohesion Friction Angle kPa Degrees 27 21 24 18.4 22 16.9

Comment The soil is considered suitable to use as impervious fill in cofferdams. Rock fill will be obtained from required excavations.

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3.2.5.4 Concrete Aggregates Coarse Aggregate General The coarse aggregate is planned to be extracted from a quarry located on the right side of the river located some 4 km from the dam site close to National Highway14D. The quarry is located in granodiorite belonging to phase 2 of the Ben Giang-Que Son formation. The elevation of the ground surface within the area varies between El. 500 m to El. 800 m. The area of the quarry site is 73 ha (1.2x0.6 km) and the thickness of the overburden to be removed (alluvium and IA) is 10 m on average (6-18 m). The total quantity of material available, and suitable for aggregate production (IB and II), is in the order of 43x106 m3, i.e. essentially unlimited. Typical values determined in the laboratory testing are presented in the table below:
Rock Type Granodiorite IB and II Dry Density t/m3 2.66-2.68 Specific Gravity, g/cm3 2.70 Porosity, % 0.84 Compressive Strength, MPa Air Dry 105 Saturated >95

Comment The material is considered suitable for production of coarse aggregate to be used in concrete. Fine Aggregate General The area considered for extraction of sand has a length of 4.6 km. The average thickness is 3.9 m. The total available quantity of sand within the area is in the order of 1.4x106 m3. Two layers are present as follows: The upper layer 1 consists of yellowish grey brownish grey fine sand with a fineness modulus varying in the range of 1.3-2.0. The thickness of the layer varies from 0.5 m to 5.0 m with the average thickness 1.7 m. The major constituent of the material is quartz. The content of silt and clay is 2.5%, the content of mica less than 0.3% and the content of salt and organic material is insignificant. Layer 2 is normally encountered below layer1, but reaches the surface in some places. It consists of yellowish grey brownish grey medium to coarse sand with gravel. The fineness modulus of the sand varies between 2.2 and 2.9 with an average of 2.6. The average thickness is 2.2 m. The major constituent is quartz. The content of silt and clay is 1%, content of gravel 26%, content of mica <0.2% and the content of salt and organic material is insignificant.

Comment The main part of the sand is finer than 1 mm and there is a deficiency of 1-5 mm size material. Milling rock in the crusher plant can produce the missing coarser sand. It is also desirable to have a sand material with up to 15% of non-plastic fines (<0.075 mm) in order to reduce the RCC paste demand. A proportion of these fines might be obtained from crusher dust. 3.2.5.5 General Pozzolan

The investigations in order to find suitable sources of pozzolan are in progress but no testing has yet been performed specially for this Project.

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Pozzolan is present in the weathering crust of Proterozoic metamorphic rock of the Ngoc Linh formation (RR1nl). The components are sillimanite schist and sillimanite-gneiss-biotite schist. Another origin of pozzolan is basaltic rock, basalt volcanic tuff and basalt pumice from Mu Rua. A third source is fly ash from coal-fired power plants. Comment A number of sources of natural pozzolan have been mentioned in the Feasibility Report. The results of tests made for A Vuong dam on three natural pozzolans have been examined. Of these it appears that pozzolan from Mu Rua has given good results whereas pozzolan from Son Tinh and Phong My have given poor to indifferent results, possibly due to a highly variable source and poor pozzolanic activity. Based on this it would seem prudent to focus attention in further studies on Mu Rua pozzolan and only consider the other two sources if they can be conclusively demonstrated to have consistent and good pozzolanic properties. Good quality fly-ash is available from power stations on Luzon (Philippines) and to a limited extent also from Vietnamese power stations 3.2.6 Conclusions

The geological conditions within the Project Area are considered favorable for the construction of a hydropower project. The studies performed in the pre-feasibility and feasibility stages have involved comparison of different dam types, different dam sites, different waterway tunnels, aboveground and underground powerhouse locations. The geological conditions at the three dam sites investigated in the Feasibility Study are similar considering rock formation and weathering profile. The geology is suitable for the RCC gravity dam chosen for Song Bung 4 Hydropower Project. The investigations performed in order to establish sources for construction material has resulted in borrow areas in alluvial soil for cofferdam construction located at convenient distances from the dam axis. A rock quarry located some 4 km from the dam has been found in an igneous rock formation consisting of granodiorite. A sand borrow area located some 2030 km downstream of the power station has been investigated earlier for A Vuong Hydropower Project. There is a deficiency of 1 to 5 mm size material, which is considered possible to obtain by milling rock at the crusher plant. Non-plastic fines reducing the RCC paste demand might be obtained from the crusher dust. The quantities available in borrow areas and in the quarry are sufficient to cover the demand for the construction of the Project. Investigations of sources of pozzolan are ongoing. It is recommended that trial mixes be tested as soon as possible in order to make it possible to decide whether natural sources of pozzolan or fly-ash should be used.

3.3
3.3.1

Review of Dam Structure


Review of Dam Site and Dam Type Selection

3.3.1.1 Introduction This section reviews the dam site and dam type selection set out in the draft Feasibility Study dated May 2005. A full supply level for the reservoir of +222.5 m has been adopted. 3.3.1.2 Topography Topographical maps at a scale of 1:2,000 with a contour interval of 1 m have been used to evaluate the dam axes and dam types.

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The valley and future reservoir are narrow with steep valley sides as can bee seen from the valley cross-section at the dam site in Figure 2-5. The Pre-feasibility Report shows that 5 sites have been evaluated, Sites 1 to 3 for CFRD and Sites 4 and 5 for RCC gravity dam options. This report recommended a CFRD at Site 1 with a maximum normal reservoir level of +230 m. Only Axes 1 and 2 are shown on the drawings. Three potential dam axes have been identified in the draft Feasibility Report, numbered 1A, 1B and 2. Axis 1B is about 200 m upstream of 1A and Axis 2 is a further 450 m upstream. 3.3.1.3 Selection of Dam Types Given a reasonably strong rock foundation a CFRD and RCC gravity dam are typically the competing lowest cost options. These two dam types have been studied. The geological investigations have shown that the foundation conditions are suitable for any of the considered dam types. Also the availability of construction material makes all the considered dam types technically feasible. Drawing of Compared Alternatives, Book 2, dated March 2005, show an RCC dam on Axis 1A, a CFRD on Axis 1B, and an RCC dam on Axis 2. Book 1 of the same date, Drawings of Proposed Alternative, shows an RCC dam on Axis 1B. The full supply level is shown as +222.5 m. An RCC gravity dam has been shown on each of the three axes and the lowest cost option has been selected. The final selection of dam type and site is based on cost estimates. The ratio of costs between the two dam types accords with experience from other studies. Any errors in the cost of cementitious materials for the RCC dam options are unlikely to change the ranking. The spillway capacities for the RCC and CFRD are shown as being the same as are their freeboards. As a CFRD cannot be safely over-topped during a flood, its free-board should be increased to give a dam of safety equivalent to that of the RCC dam. This is important given the short hydrological time series for the river and the attendant uncertainties in the flood estimates. If this were taken fully into account, the cost of the CFRD options would increase, thus making the RCC alternatives even more attractive. We concur with the RCC gravity dam as the choice of dam type, and is also supported from a geological point of view. 3.3.1.4 Selection of Dam Site The dam site has been selected on the basis of cost estimates. The costs have been estimated as follow:
Site 10 VND 106 USD Cost Ratio 9 NPV, 10 VN
1 US$ = 15,800 VND.
9

1A 3145.71 199.1 1.035 283.42

1B 3038.37 192.3 1 367.09

2 3124.38 197.7 1.028 283.19

The estimate shows the best overall economy for Site 1B which has therefore been selected. However, the plunge-pool for the spillway for Site 1B is complicated as its exit is asymmetrical. Model tests are required to define the geometry, and the spillway chute may have to be constructed such that the water is ejected at an angle to the dam. Dividing walls between each of the five outlets might be required. The additional costs could be of the order of 2 to 3 million USD making the difference in price between Sites 1A and 1B smaller, maybe less than 4 million USD which is about 10% of the cost of the dam with diversion and spillway. It seems improbable that any additional costs required to achieve a well-engineered spillway at Site 1B
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would exceed the current cost difference. In terms of a rock excavation, it would represent some 1 million m3. We therefore agreed with the selection of Site 1B, but budgets should be included to cover additional costs which might arise because of the plunge-pool configuration. That can be defined only after model testing. 3.3.1.5 Dam Foundation The dam will be founded in stratum IB after removing the overlying strata eQ, IA1, IA2 and 2 m of stratum IB. The foundation grade is called IIA1 and is considered adequate from bearing capacity point of view. The final exaction of the dam foundation has to be made with careful blasting, rock breakers and other means which will minimize disturbance to the foundation rock. In fault zones of grade IV the gouge material has to be removed to a depth of 1-3 times the width of the zone and replaced by concrete. The inclination of the cut slopes should not be steeper than 1:2 in soil, 1:1 in stratum IA and 1:(0.6-0.7) in strata IIA and IIB. Cuts of limited height may be steeper and even vertical, but support measures may be required. Other cut slope angles may be adopted subject to satisfactory stability analysis. The specification for dam excavation will give detailed shaping criteria. Minor inflow of water is expected and has to be controlled by canalization and pumping. Recommendations regarding foundation treatment and grouting are given in Section 3.3.9. 3.3.2 Gravity Dam Design

3.3.2.1 General The general layout shown on the drawings is satisfactory. Comments on details of the layout and the dam cross-sections are given below. 3.3.2.2 Design Standards and Design Criteria The dam has been designed using Vietnamese standards TCXD VN 285:2002. This design standard has not been studied in detail, but the results show that the presented design is conservative as the various calculated factors are well within the allowable ranges. Further checks have been presented employing CDSA 1995, USACE 1995, FERC 1991, FERC 1999, and USBR 1987. These various codes reflect methods and standards of design which are employed extensively by international consultants and embody sound design principles. These codes include recommendations on loads and load combinations as well as acceptance criteria. The check calculations presented using these standards also show that the presented design is conservative and that there is room for optimization. Most of the detailed dam stability estimates made to date, examine the dam body as a whole resting on a rock foundation. Design checks are required for each layer in the dam, as has been done in the CADAM dam stability software. The shear strength of the dam/foundation interface has been set low with the shear coefficient f = 0.75 ( = 37) and c = 0.2 MPa. When using the above Canadian and American standards and codes, the foundation/rock shear strength must be set more realistically. Given the high rock strength at the site, the governing strength is probably the lift joint strength, the strength between RCC lifts. However, this should be checked using the orientation of the joints in the rock and joint shear strengths if joint orientations should be critical. For feasibility design purposes the following concrete cylinder strengths may be used:

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Proposed RCC Strengths for Feasibility Design Concrete Design Compressive Strength Design Tensile Strength Cohesion, Friction Angle Peak Residual Parent Concrete 15 MPa 1.6 MPa 1.5 MPa / 45o 0 MPa / 45o Lift Joints 15 MPa 1.3 MPa 1.1 MPa / 45o 0 MPa / 45o

For normal load combinations the allowable tensile stresses should be taken as zero. Note that the design tensile strength for lift joints should be assumed to operate over 80% of the area. 3.3.2.3 Comments on the Draft Feasibility Design Cross-sections The proposed upstream view and cross-section of the non-overflow dam is shown in Figure 32 and Figure 3-3, respectively. The slopes of the dam may not be fully optimized, but are not unreasonable. The crest width has been set to 10 m. Unless 10 m is required for operational reasons, it can be reduced to 8 m which is the minimum width for effective RCC construction. The width of 10 m may be related to the upstream reinforced concrete which is shown as 3 m thick and which would give an effective RCC placement width of 7 m at the top of the dam. It is strongly recommended that the reinforced concrete facings be deleted and that GE-RCC be used instead (Grout-Enriched RCC, see description of this technology below). The GERCC would be a facing only, ensuring a fair finish to the dam. Water-tightness would be taken care of by the RCC in the dam. The objections to the reinforced concrete shown are that it has a high cost, slows RCC placement with attendant cost and quality implications, and it is not required with high paste RCC. Most dams are now being built using GE-RCC (or GEVR, Grout Enriched Vibratable RCC) for reasons of cost and quality. GE-RCC would be used also on the downstream face of the dam instead of the reinforced concrete shown. The reinforced concrete shown at the base of the dam should be deleted. At the lowest section of the dam, un-reinforced levelling concrete (CVC, Conventionally Vibrated Concrete) is required to give a starting platform of adequate size to allow effective RCC placement. The contact between the RCC and the rock foundation outside this area may be made using GERCC or a bedding mix. GE-RCC is now increasingly used also for this purpose. The upstream face of the galleries in the RCC should be set at 8 m from the upstream face of the dam. This will give the required space for effective RCC placement in this area. This factor is important as the RCC in this 8 m band forms the principal water barrier in the dam. Unless earthquake loads dictate otherwise, gravity dams are normally built with vertical upstream faces. The theoretical benefits of sloping the upstream face are marginal and do not offset the additional complexities of building the sloping face. A vertical upstream face is recommended given the relatively low seismic design coefficients applicable to this site. The proposed cross-section at the spillway is shown in Figure 3-4. The comments made on the non-overflow section apply also to this section. The lip of the spillway protruding downstream of the vertical face of the dam serves no purpose, is costly and should be deleted or at least substantially reduced. The thickness of the spillway chute slab is shown as 3 m. This may be reduced to 1.2 m or even 0.9 m. The slab should be anchored to the underlying RCC as if the RCC were rock, i.e. with anchor bars either drilled and grout into the RCC or installed as horizontal bars between the RCC layers as they are placed. The shown extension of the piers downstream of the gate bearings may be larger than structurally required. To ensure stability of the crest block with gates it may be necessary to increase the participating mass. This may be done by drilling anchor bars into the top of the RCC and by providing a reinforced vertical down-stand at the upstream face of the dam as indicated on the crosssection. Hydraulic aspects of the spillway design are given below.

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Exisitng ground level

292.00

Figure 3-2 Upstream View of Dam, Current Design

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10.00

2.00

2.80

3.00

2.00

2.90

RCC
2.80

7 0.

3.00

12.00 63.02 23.09 3.91

Figure 3-3 Current Design of Dam Cross-Section

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3.50

4.20

4.10

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32.66 8.66 19.00 5.00

18.04

8.98

51deg 52min 38.6396sec

3.

00

3.00

2.90

2.00 3.00

2.80

RCC

4.10

3.50

4.20

3.00 12.00

15deg 0min 0.0000sec

Figure 3-4 Current Design of Dam Cross-section at Spillway

The foundation galleries are shown as being 3 x 3.5 m (w x h) which is exceptionally large. A common gallery size is 2.4 x 2.7 m (w x h) which may be adopted also here. However, the contractor may be given some choice in selecting the final size of the galleries to suit his equipment and method of working. The other galleries (drainage galleries) would normally be

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made the same size as the foundation galleries, i.e. 2.4 x 2.7 m. The lower galleries will be below the tailwater level during floods. Consideration should be given to providing a pump sump and pumps to maintain the galleries dry during such periods. Security of instrumentation and other electrical installations needs to be taken into account. Access to the galleries should be above the 5,000-year (0.02%) flood level. Pumping may be required in any case to maintain the lowest part of the foundation gallery free of standing water. 3.3.2.4 Free-board The free-board in the draft feasibility design has been set from the 5,000-year (0.02%) flood with an allowance for waves. Economic advantage may be taken of the ability of this type of dam to withstand over-topping, both by waves and from floods, without impairing safety. Consideration may be given to using a parapet wall to prevent intermittent over-topping by waves under normal operating conditions. One option is to make the top of the dam coincide with the design flood level (1,000-year, 0.1%) and provide a 1.2 m high parapet wall on top of it to take care of waves. The exact elevations would have to be checked, but a reduction in dam height by about 3.5 m might be possible. A crest level of +224.5 m with a 1.2 m parapet wall would contain the design flood and would give 0.3 m overtopping of the wall at the control flood level (5,000-year, 0.02%, flood). Depending on the design of the wall, it may be damaged, but this is acceptable for a flood of such rarity. 3.3.2.5 Joint Spacing Induced contraction joints are shown at 40 m spacing except under the spillway where a maximum spacing of 57 m is shown. The 40 m spacing may be a reasonable guess for feasibility design and is the same as was estimated for Ban Ve dam. However, within the 57 m bay there is the diversion culvert. If no further provision is made, a crack will most probably occur emanating for the protruding corner of the culvert. A joint should be provided at this location to prevent uncontrolled cracking and leakage. A study is required to find a sound configuration of the induced joint, the diversion culvert and the spillway bays. It would be beneficial to re-align the diversion culvert such that it would run normal to the dam axis. Reinforced concrete sections are occasionally used to limit crack propagation. This may be considered, but requires analysis to find the optimal location and extent. Such reinforcement might be most effective when installed well above the foundation where external and internal restraint is small. 3.3.2.6 Recommended Design The cross-sections of the dam made in accordance with the above recommendations are shown in Figure 3-5 and Figure 3-6. Figure 3-7 shows a plan of the dam and associated works. The downstream face slope has, from experience, been set at 0.8:1 (H:V). The sections should not be taken as final proposals, but as a starting point for further design development and optimization. The entire cross-section is built using RCC technology except for the spillway crest, chute and ski-jump liner. The spillway piers and chute walls will be built in conventional concrete.

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FWLC = 225.97 NWL = 222.5

225.7

8.00

SECTION 2-2
224.5

40

218.7

211.8
35.00

8.00

198.5

DWL = 195.0 189.5

33.00

156.5
5.60

RCC
Max tailwater = 149.5

33.00

8.00

123.5 120.7

Figure 3-5 Proposed Revision to the Design of the Non-overflow Cross-section

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SECTION 3-3
Covered slot in bridge for stop-logs
28.00 8.00

Pier width to be determined

FWLC = 225.97 NWL = 222.5

225.7 224.5
40

206.5
To be determined

35.00

Aeration slot R 25.00

198.5 DWL = 195.0

5.00

189.5
20 1.

Thickness to be determined

1.50

Optimal angle to be determined

177.5
33.00 106.53

Compensation outlet 8.00

80.50

2.70

156.5

2.40

RCC

Max tailwater = 149.5

35.50

8.00

121.0 118.0

Figure 3-6 Proposed Revision to the Design of the Spillway Cross-section

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Figure 3-7 Proposed Revision to Layout of Dam

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3.3.3

Review of Spillway

3.3.3.1 Design Criteria The spillway comprises a gated overflow on top of the RCC dam with a downstream ski-jump and plunge-pool. The spillway has been designed for the following floods: Design Flood, p=0.1% (1,000-year flood) - Maximum flood: - Design flood level: - Maximum discharge: - Maximum flood: - Control flood level: - Maximum discharge: 12,363 m3/s 223.86 m 10,750 m3/s 15,509 m3/s 225.97 m 12,763 m3/s

Control Flood, p = 0.02% (5,000-year flood)

The size and number of gates have been optimized and the general arrangements seem sound. The design flood for the spillway follows Vietnamese standard, however, it is recommended to verify the stability of the dam in the event of a PMF during the technical design phase. 3.3.3.2 Stop-logs and Stop-log Handling The section appears to shown a gantry crane for stop-log handling. Stop-logs will be used only on very rare occasions, maybe every 30 to 50 years, and installation of a gantry crane for this purpose would be an unwarranted capital cost and would require regular maintenance. Stoplogs can be handled by a mobile crane. The crest road is currently shown dog-legged over the spillway. With some adjustments the bridge may be placed upstream of the radial gates and run in a straight line from abutment to abutment. The gates would be assembled using a mobile crane set up on the bridge and the same arrangement would be used for any maintenance. A slot with cover-slab could be provided in the roadway to coincide with the stop-log slots in the piers. Stop-logs would normally be stored on one of the abutments, suitably protected against damage and corrosion. 3.3.3.3 Plunge-pool The depth of the plunge-pool has been estimated in Calculation Appendix 3 - Spillway. The depth of the plunge-pool seems small and further checks should be made with alternative formulae. An estimate using Martens equation gives an ultimate plunge-pool erosion depth some 15 m deeper than shown in the appendix and on the drawings. Other equations give depths even greater than this (e.g. Mason, Vernonese). These and other empirical equations give the depth of ultimate plunge-pool development. The floods may have a high peak intensity but they are of relatively short duration and it will take time for the plunge-pool to reach its ultimate size. Pre-forming the plunge-pool to an estimated ultimate depth and extent may not be warranted, but at least some of the plunge-pool should be pre-excavated and to a larger extent than shown on the drawings. Further work is required to define the size of the pre-excavated plunge-pool, including hydraulic model tests, but one might consider as a starting point the elevation given by the Mason formula for a 10-year flood which is 97.5 m or about 20 m lower than currently shown on the drawings.

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3.3.3.4 Ski-jump and Model Studies The exit of the ski-jump is shown as being horizontal. It is necessary to increase this angle to avoid a single hydraulic jump forming in the plunge-pool, see also comments in Section 3.3.3.5. Hydraulic model studies are required to give a final definition of the spillway shape and the size and shape of the plunge-pool. In this context the exit from the plunge-pool is asymmetric which makes a model study all the more important. Due to the rather narrow section of the river at the location of the plunge pool, high backwater velocities may be expected under certain conditions. 3.3.3.5 Cavitation and Aeration The peak water velocity on the chute is of the order of 30 m/s. Cavitation can occur at such velocities unless the spillway concrete is constructed to a very high standard with respect to both strength and flatness. Consideration should be given to providing aeration to the flow. This could be via an aeration gallery or might be arranged at the tail end of the piers without a gallery. In this case the lower part of the piers could be extended downstream in order to optimize the location of air injection. The efficiency of the aeration can be checked in a physical model provided it is of sufficiently large scale. It may be advantageous to raise the level of the ski-jump to reduce the water velocities. The distance to the plunge-pool could be largely maintained by increasing the exit angle from the ski-jump to 30 or 35 degrees. It may then be possible to dispense with aeration. The volume and cost of spillway concrete and underlying RCC would probably be increased which might negate any cost advantage gained in omitting aeration. 3.3.3.6 Piers and Dividing Walls The piers are shown as 3 m thick which should be adequate for the size of spillway given the relatively low earthquake accelerations. The upstream-downstream width shown seems large and investigations should be made to see if they might be shortened. No significant depth of concrete is required downstream of the gate trunnions for their support. The downstream end of the piers would be cut off square without hydraulic fairings. If the spillway is constructed with the general configuration shown, dividing walls between the spillway sections would not be required. However, if model tests show that the flow has to be turned to align it better with the river downstream of the dam, then such dividing walls would be required. 3.3.4 Diversion Arrangements

3.3.4.1 Diversion Capacity The planned diversion comprises a twin box culvert with each opening being 7 x 9 m (w x h). The size of the diversion is related to the flood frequencies, size and duration and the size and duration of acceptable over-topping of the dam. The 10-year (10%) flood has been used as a basis for the presented assessments. Overtopping of the dam is envisaged and the schedule apparently shows the RCC placement operation closed for the first wet season. Values for the 2-year and 5-year floods have not been found in the reports. To give preliminary assessments related to floods corresponding to these return periods, the floodreturn period graph has been extrapolated using a logarithmic relationship. The resulting peak floods are then 2,450 and 3,950 m3/s, respectively. If the initial placement of RCC were started at the beginning of the dry season (1 January),

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some 50 m height of dam could be placed within 6 to 7 months, i.e. prior to the onset of the wet season. Were a 2-year flood to occur at this time, the dam would not be over-topped and delays in placement would be due entirely to rainfall. With a RCC elevation of about +173 m, the dam would not be over-topped in a 5-year flood. A 10-year flood would be contained by a dam at elevation +175 m. It should be possible to attain this level of RCC construction by about mid-June in the first RCC construction season which is before the onset of the flood season. The upstream cofferdam height is currently shown at +139.5 m, about 20 m above the riverbed. If the dam can be constructed at the rates indicated above, the cofferdam could be constructed to contain the early dry-season peak flow only, which is about 300 m3/s for the first 3 months of the year (p=10%). The cofferdam crest level could then be set at, say +127 m. Note that the figures given above are indicative only and a more detailed analysis may give slightly different results. Consideration should be given to constructing a diversion that is smaller than the one currently shown in order to save costs, providing risks to the dam construction remain manageable. For example, preliminary calculations suggest that by reducing the diversion capacity to 2/3 of that shown would require a dam elevation of about +176 m to prevent over-topping of the 10-year flood. A further reduction of current capacity to 50% would require an RCC level of +177 m to prevent overtopping by the same flood. The height of the cofferdams would, however, have to be increased to maintain a reasonable level of risk. Halving the capacity of the diversion culvert might require an upstream cofferdam height at +131 m to provide protection during the first 3 months of RCC construction. Although these figures are all rough and preliminary, they show that an option with a reduced diversion culvert capacity should be examined. 3.3.4.2 Diversion and Cofferdam Construction The drawings show the excavation for the culvert extending beyond it on the abutment side of it. The cut for the culvert should be excavated by smooth-blasting (or pre-splitting) and made as near vertical as possible. The right-hand wall of the culvert would then be cast directly against rock. The smooth-blasted surface may require temporary support with shotcrete and rock bolts as needed. 3.3.4.3 Diversion Closure Diversion closure is shown as stop-logs inserted at the upstream end of the culvert. In the current design each of the culverts is 7 m wide. The details of the diversion closure require detailed study, but only when the size of the diversion culvert has been finalized. If two culvert openings are used, it would be normal to close one of them early in the dry season and then cast a plug thereafter. The plug would normally require cooling to near ambient long-term temperature and subsequent grouting before it could be put into service. Final closure would then be made of the remaining opening by means of stop-logs or a gate and a plug cast. The gate or stop-logs could then be salvaged. When designing the closure, the rate of rise of the water has to be considered and a system has to be proposed which takes this into account. 3.3.5 RCC Mix Design

The RCC proposed for Song Bung 4 Hydropower Project should be a high paste mixture which is designed to be watertight without the need for an upstream waterproof membrane. A high paste RCC is classified as a mixture with more than 150 kg of cementitious material. The cementitious materials will be Ordinary Portland Cement and a pozzolan. The pozzolan may be fly-ash, a natural pozzolan or ground granulated blast-furnace slag. In addition, inert filler can be used. The filler may be crusher dust or imported fines which typically display little or no pozzolanic activity. The addition of pozzolan has the desirable effects of reducing cement

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content, thus lowering costs and reducing the heat of hydration and giving slower strength development which benefits bonding of RCC layers and reduces thermal stresses. The paste/mortar ratio is increased, thus reducing the potential air voids in the concrete. The inclusion of pozzolan in the concrete also prevents alkali-silica reaction where this might be a problem. Any good quality Portland cement may be used. Low or intermediate heat of hydration cements is desirable to reduce the temperature rise in the dam. Portland pozzolanic cement is suitable, but its use reduces the opportunity for adjustment of the pozzolan content of the concrete unless pozzolan is also stored on site. Portland blast furnace slag cement is a further option. Commercial pozzolanic and slag cements can vary in their composition which is undesirable when used for RCC. Consistency of the cement properties during dam construction is important in ensuring a good and uniform dam concrete. Cement should ideally be delivered from a single manufacturer with proven ability to deliver a consistent product. It is sound commercial practice not to determine this single source prior to tender for dam construction. Several sources of cement may have to be investigated and approved prior to tender and concrete mix proportions determined for each. The most common pozzolan is fly-ash. Fly-ash properties vary with source. Differences in the origin of the coal and in power station design and operation can yield substantial differences in the physical and chemical properties of the ash. As for cement, prior approval of sources of fly-ash is needed. Nearly all fly-ash used in RCC dams has been ASTM Type F fly-ash. The RCC has to be designed to be not susceptible to segregation. Segregation can give porous layers at the base of lifts with ensuing water leakage. Segregation is aggravated by a large maximum size of aggregate (MSA). The MSA is often limited to 40 mm for natural (rounded) aggregate and 60 mm for crushed aggregate. On some dams the MSA is set at 40 also for crushed aggregate. In the core of very large dams, where bond and water-tightness may be less important, an MSA of up to 75 mm has been used, but this is not applicable to a dam the size of Song Bung 4. A cohesive mix also helps to prevent segregation. Cohesiveness in the fresh concrete is helped by a high paste content and a reasonably workable mix. The grading of the aggregate has to be tightly controlled and should be close to the theoretical optimal grading. Three sizes of coarse aggregate and one or two sizes of fine aggregate (sand) are commonly required to achieve this. The consistency of the fresh RCC has to be such that it can be compacted by heavy vibrating rollers and such that the rollers will not sink into it. Consistency is measured using the modified VeBe apparatus. VeBe times of 12 to 20 seconds commonly give the desired compaction properties for a modern 10 to 15 tonne single drum vibrating roller and are typical for mixes with little segregation. The RCC is compacted to high densities with the air void content being 2% or less. The permeability of completed dams using mixes as described above has been shown to be low, less than 10-8 m/s, provided the cementitious content exceeds 150 kg/m3, see ICOLD Bulletin 123, State-of-the-art of roller compacted concrete dams. For higher dams a lower permeability is desirable and the cementitious content should be 180 to 200 kg/m3. Other criteria may give higher cementitious contents than these. The strength of the RCC is given by requirements derived from the stress and stability analysis of the dam. Tensile strength is commonly the critical parameter where tensile strength of the lift joints is the most important. However, the seismic design loads for this site are low, some 0.04 g for the OBE, and earthquake-induced tensile stresses are likely to be low. Tensile strength is related to compressive strength and the latter is used for primary

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design and quality control. The presence of pozzolan leads to slow rates of strength gain. The design strength is commonly taken as the 90 to 365-day strength with 180-day and 365-day strengths often used for large dams. Many RCC dams have shown significant strength gain for several years after construction. RCC mixes are initially designed based on experience. For tender design a trial mix programme has to be made where a range of mix proportions are tested for fresh concrete and hardened concrete properties. In the absence of test data the cementitious content of the RCC has to be set conservatively high. For this review the following mix proportions are suggested:
Initial RCC Mix Design for Feasibility Study Purposes Material Coarse aggregate Fine aggregate Cement Pozzolan Water Air-entrainment Water reducing/ retarding admixture Content, kg/m3 1,431 717 100 120 126 0 4

The amounts of cement and pozzolan are at the upper end of what might be expected. RCCs of a similar strength have been made with less than 80 kg cement and 100 kg of fly-ash. If the sand is deficient in any fraction, particularly fines, then the pozzolan content may be increased and it then act partly as filler. Water reducing agent may be required to achieve the necessary workability. Air entrainment agents may be used in the RCC as a workability aid but their cost may not be warranted. The tabulated quantities have been set to achieve a design compressive strength estimated to be 15 MPa at 180-day maturity. The dam volume is such that it is probably not economic to use more than one RCC mixture. 3.3.6 Construction Methodology

3.3.6.1 Transport and Placement Methods RCC is normally placed in continuous layers extending from abutment to abutment. Speed of construction is an important factor as each layer of concrete needs to be placed on the underlying layer before the latter has aged to such an extent that a good bond between the layers cannot be achieved. The concrete is commonly transported to the dam using conveyors and may be placed directly by a conveyor or may be transferred to trucks for final placement. The concrete is spread in layers, normally 30 cm thick, using bulldozers and is compacted by 10 to 15 tone vibrating rollers. Until recently, all RCC was placed in horizontal layers. The capacity of the concrete manufacturing plant is then geared to placing the largest lift in the dam within one day, commonly 14 or 16 hours and such that the next lift can be placed within 24 hours. Regular,

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time-consuming and expensive lift joint treatment is avoided with this procedure. The sloped layer method has now been developed. In this method the RCC layers are placed on a slope as shown in Figure 3-8. The size of the layer is such that the next layer can be placed before its initial set. The total height of the lift, which may be 1.2 m or more, then gives the slope angle. With this method it may take several days to complete one lift from abutment to abutment. Each lift is homogeneous as each layer is placed on fresh concrete. The top surface, however, becomes a cold joint and requires treatment to ensure a good bond with the next lift. The methods of joint treatment are the same as for conventional concrete and give a similarly good bond. The cleaning and preparation of these surfaces is not on the critical path. The method has several further advantages. In the event of any disruption to the RCC production or delivery, the exposed surface is at any time relatively small and can more easily be prepared as a cold joint. (On a single horizontal layer the entire area from abutment to abutment would have to be prepared.) The requirement to place a minimum of one 30 cm lift per day, or about 10 m per month, no longer applies. Instead of the concrete manufacturing and transport plant being designed for placing the largest layer in one day, the plant can be designed for a desired typical placement rate.

Previous lift

Figure 3-8 Sloped Layer Method of Construction

3.3.6.2 Forming the Faces of the Dam The faces of the dam can be formed using various methods. Slip-formed kerbs have been used, but more often formwork is the chosen option. RCC can be placed directly against formwork or conventionally vibrated concrete (CVC) can be used. In the latter case CVC is placed against the formwork just in advance of the RCC layer. In recent years the GE-RCC (Grout Enriched RCC) has been developed. A variant is the GEVR (Grout Enriched Vibratable RCC) method. In the former the grout is placed on top of the fresh RCC adjacent to the formwork. In the latter grout is placed adjacent to the formwork just in advance of the RCC placement. The RCC thus enriched with grout is then consolidated using poker vibrators. Either method can work well and produce a fair face to the dam without honeycombing or voids. This method, in its two variants, has proven to be the lowest cost option for most dams where it has been used. Figure 3-9 and Figure 3-10 show the extent of GE-RCC (or GEVR) on the downstream and upstream faces, respectively. At the location of water-stops at the upstream face, the thickness of grout enriched RCC is increased to encompass the water-stop and drain assembly. The downstream face will be formed in steps. The steps might be 0.6 m high if horizontal lifts are used and may be 1.2 or 1.5 m high for the sloped layer method. The GE-RCC should in each case be of sufficient width for the entire step width (tread) to be formed in GE-RCC.

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Nominal face of dam Formwork

Layer boundary 0.96m

0.8 1.0
0.40m GE-RCC

Figure 3-9 GE-RCC on the Downstream Face of the Dam, Sloped Layer Method

Layer boundary

0.30m

Lift boundary

1.20m

Formwork

RCC 0.40m

GE-RCC

Figure 3-10 GE-RCC on the Upstream Face of the Dam, Sloped Layer Method

3.3.6.3 Leveling Concrete and Bedding Mix In order to start RCC construction, a flat platform has to be made at the bottom of the dam. It needs to be of sufficient area to allow effective use of the placing and compacting machinery. The platform is made with CVC - leveling concrete. The contact with the rock abutments can be formed with a layer of conventional concrete

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(bedding mix) or, now increasingly, using GEVR or GE-RCC. In all cases, except the leveling concrete, the contact concrete is placed just in advance of the RCC placement and is consolidated with it. 3.3.6.4 Forming Galleries Galleries can be formed by various methods. An effective method is to use GE-RCC against formwork and pre-cast beams for the roof. Gallery widths are commonly made 2.4 m which with 3 m long roof elements gives a bearing of 30 cm on each side. The roof elements are normally 30 cm thick to coincide with the RCC lift thickness. Wider galleries would require thicker, heavier and more costly roof elements. 3.3.6.5 Lift Joint Treatment Hot joints, joints where the RCC of a subsequent lift will penetrate its surface during compaction, will require no treatment other than removing free water and debris. Cold joints will require exposure of aggregate using green-cutting or other techniques and a bedding mix will be required. The bedding mix will be a mortar with a maximum size of aggregate less than 5 mm which would be spread immediately prior to being covered by RCC. 3.3.6.6 Crack Control by Means of Induced Joints and Waterstops Cracking of the dam due to thermal effects has to be controlled. This is done in part by placing cooled concrete, which reduces the cracking potential and by inducing cracks (joints) at regular intervals in the upstream-downstream direction. These contraction joints may be formed by introducing a crack inducer into the freshly placed RCC lift. This may be done by vibrating a steel plate into the RCC. Waterstops and a joint drain would be installed at the upstream end of the crack inducers as shown in Figure 3-11. At higher heads, two water-stops may be required upstream of the joint drain. The joint drains are formed by slip-forming a void as the RCC increases in height. The joint spacing can be obtained from thermal stress analysis of the dam body. Spacings vary with placement temperatures and climate. In this case the designs show a typical spacing of 40 m which is reasonable for the climatic conditions and assuming some pre-cooling of the concrete. Further joints are required at abrupt changes in foundation profile such as the outer edge of the diversion culvert. 3.3.6.7 Internal Drainage As with all concrete dams, internal drainage is required to ensure that the design assumptions for internal pore pressures are valid. The drainage consists of drilled drain holes located near the upstream face of the dam. The holes are drilled between the galleries which form part of the drainage system. The galleries are located not less than 8 m from the upstream face of the dam and are spaced at not more than 35 m or possibly 40 m. The limit on vertical spacing is required to ensure that the drains drilled at low cost will emerge into the gallery below. Hole diameters of 75 to 150 mm are used, but a minimum diameter of 100 mm is recommended. The joint drains are led to the galleries using PVC conduit. These drains are indicators of the effectiveness of the water-stops and afford means of access for grouting any deficiency.

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400mm

GE-RCC
700mm 250mm

200mm

Crack inducer, 2 mm thick HDPE sheet

250mm

RCC
300mm

Figure 3-11 Typical Water-stop and Joint Drain Detail

3.3.6.8 Recommended Methods of Dam Construction The following methods are proposed for Song Bung 4 Dam: 3.3.7 Placing: Sloped layer method Forming faces: Rock contact: GE-RCC against formwork GE-RCC Forming galleries: GE-RCC against formwork with pre-cast beam elements in the roof. Leveling concrete: CVC Placement Rates and Plant Capacity

The placement methods are described in outline in Section 3.3.6.1. To date most dams have been built using horizontal lifts. The RCC manufacturing and placement capacity then has to be designed to place the maximum lift in one working day, here taken as 14 effective hours. Figure 3-12 shows the volume of 30 cm thick lift plotted against elevation. The maximum lift volume is about 2,600 m3 at elevation +155 m. Increasingly, the sloped layer method is coming into use and it does not have this constraint on it. The area of each layer within a lift is then dependent on the lift thickness, the width of the lift, the setting time of the RCC and the rate of RCC delivery to the dam. The method lends itself to an even production with good plant utilization.

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230 220 210 200 190 Elevation, m 180 170 160 150 140 130 120 110 0 500 1000 1500 30 cm layer volume, m
3

2000

2500

3000

Figure 3-12 Lift Volume Versus Elevation

The following options have been examined: a) b) c) d) e) Horizontal layer (lift) placement raising the dam 10 m per month with an effective plant capacity of 200 m3/h Horizontal layer (lift) placement with an effective plant capacity of 200 m3/h. Sloped layer placement in 1.5 m lifts with an effective plant capacity of 200 m3/h. Sloped layer placement in 1.5 m lifts with an effective plant capacity of 175 m3/h. Sloped layer placement in 1.5 m lifts with an effective plant capacity of 150 m3/h.

The rated plant capacity will be higher than the required effective capacity. Rated capacities may be 1.5 to 1.7 times the effective (actual) capacity. RCC placement schedules have been made for the above options. To some extent the schedules can be steered to accommodate important project milestones. In the horizontal layer placement a delay of 24 hours for every 6 days has been incorporated to allow for unexpected down-time. In the sloped layer options a delay of 24 hours has been incorporated for every 1.5 m lift for similar reasons. In all options, placement is assumed to continue at the given rate for 14 hours a day. When placement reaches the bottom of the spillway ogee block, placement is assumed to continue on the right abutment with the remaining RCC on the left abutment being completed thereafter. For the purposes of this section of this review no account has been taken of any seasonal effect on placement rates. Horizontal layer placements have been limited to 3 per day as moving formwork may well be on the critical path. The table below shows the time estimates for the various options. Option b) is probably not realistic as formwork movement is likely to be critical and would delay the programme. Any of the other options could be adopted, but the sloped layer method, option e), at 150 m3/h may
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be optimal.
Estimated Net Times for RCC Placement (Excludes Delays for Flood and Rain) Option a b c d e 10 200 200 175 150 m/month m /h m /h m /h m /h
3 3 3 3

Method Horizontal layer Horizontal layer Sloped layer Sloped layer Sloped layer

Time to +198.5 m 8.0 7.2 8.7 9.7 11.1

Estimated Net Time, Months Right Left Abutment Abutment 2.8 1.1 1.3 1.5 1.6 2.8 1.0 1.5 1.7 1.8

Sum 13.6 9.3 11.5 12.9 14.5

The construction schedule is discussed further in Section 4.1. 3.3.8 RCC Manufacture, Transport and Placement

3.3.8.1 Aggregate Aggregate can be derived from gravel and sand deposits and from quarried rock. For minimizing segregation, the angular particles obtained from crushing quarried rock are often preferred and this is proposed in the current design. A suitable quarry has been located in granodiorite some 4 km upstream on the right side of the valley. Sand has been located in the river some 20 to 30 km downstream which is suitable for RCC. The transport cost, which might be 0.05 USD/tone and kilometer, is much less than the quarrying and process costs which might be in the region of 8 to 10 USD/tone of sand. Metamorphosed sandstone with some intercalated siltstone is present extensively and this rock may be suitable for RCC aggregate. This source should be investigated further. Aggregate production should start well in advance of RCC placements. Up to one third of the required aggregate is commonly produced in advance. This has the advantage of reducing the size of the aggregate plant and ensuring that aggregate production is not on the critical path for dam construction. There is limited space available for aggregate storage and a smaller initial reserve may be optimal. The aggregate plant would comprise a large jaw crusher and probably at least three cone and impact crushers. Three screening towers may be required. The capacity of the plant must be sufficient for the RCC and all the conventional concrete to be used in the project. Assuming aggregate production to be spread over 2 years, the required plant capacity of RCC and CVC in the dam alone might be 130 ton/hour (at 16h/day, 6 d/week, 48 weeks /year). The following three sizes of coarse aggregate are proposed:
Proposed Sizes of Coarse Aggregate 60 mm MSA 40 to 60 mm 20 to 40 mm 5 to 20 mm 40 mm MSA 20 to 40 mm 10 to 20 mm 5 to 10 mm

The fine aggregate, sand, is proposed to be taken from the river some 20 to 30 km downstream of the dam. This sand is mostly finer than 1 mm and there is a deficiency of 1 to 5 mm size material (Engineering Geology Report, Figure 6.6). It is likely that coarser sand will

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have to be produced by milling rock in the aggregate plant. It is also desirable to have sand with up to 15% non-plastic fines (<0.075 mm) which reduces the RCC cementitious material demand. Some or most of these fines may be crusher dust. The natural and manufactured sands will require separate stockpiles and will be batched separately. 3.3.8.2 Aggregate Stockpiles for RCC If the aggregate production were spread over 2 years, full production would start 9 months before RCC placement. The volume produced in this time, amounting to perhaps 270,000 m3, would have to be stockpiled in three separate sizes, with each pile being 50,000 to 130,000 m3 depending on the RCC mix proportions and the stacked density. Storage areas at suitable locations have to be identified and prepared in advance. Drawing 12006C-TD-TCTCK-02 shows an area designated for the crusher plant where some of the aggregate may be stored. An area of at least 50,000 m2 may be required for coarse aggregate storage, preferably immediately adjacent to the aggregate plant, but the topography might dictate that the storage be split between different locations. Overall economy with the shortest and flattest possible haul roads is important in planning these storage areas. Manufactured sand will have to be stockpiled in parallel with the coarse aggregate. For preliminary estimation purposes, natural sand is assumed to constitute 2/3 of the fine aggregate and manufactured sand the remainder. The volume of manufactured sand produced prior to commencement of RCC placement might be of the order of 50,000 to 60,000 m3 which would have to be stockpiled. The natural sand will presumably be processed near the borrow pit and stockpiles might be distributed between this area and the dam site. At the start of RCC placement there should be a volume already processed corresponding to at least 3 month RCC production available of which at least 1/3rd should be stockpiled at the dam site. The size of the aggregate storage at the batch plant should be sufficient for at least one days production, and preferably two days worth, provided reliable haul roads and trucks are provided to maintain daily production rates. 3.3.8.3 Batching and Mixing Batch-type twin-axle pug-mill mixers specifically developed for RCC are now commonly used and are recommended for Song Bung 4 Hydropower Project. Continuous feed pug-mill mixers give a greater variability in concrete strength and are not favored. Drum mixers have been used and may be appropriate for smaller dams where the investment in batch-type twin-axle pug-mill mixers cannot be justified. Batching is done is a conventional weigh-batching plant. Ice and chilled water may be required to control concrete temperature in the summer months. For the purposes of this review, a flake ice and chilled water plant has been an assumed requirement. Water for mixing and cooling may be derived from the river or perennial streams. Settling ponds will be required to remove the sand and silt load. The batch plant and mixing station would be located in proximity to the dam. An area some 400 m upstream of the dam has been identified. This area would also contain day-storage for aggregate as well as silos for cement and pozzolan. Aggregate would be transported by truck from the main stockpiles at the quarry site on a daily basis. If the cement and pozzolan is delivered in bulk, the silo capacity at the site will have to be sufficient for at least 2 weeks production. For the various placement options, see the table in Section 3.3.8 and the RCC mix proportions in the table in Section 3.3.6, the site storage would be as follows:

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Estimated Silo Storage Requirements Placement Rate m3/h 150 175 200 Cement Storage Tones 2,500 2,900 3,400 Pozzolan Storage Tones 3,000 3,600 4,000 Total Tones 5,500 6,500 7,400

These quantities are required to ensure that RCC production and placement can proceed independently of interruption to supplies. As indicated above, cement could also be transported in big-bags if available. These could be stored under cover at site and broken and blown into silos for use. This could substantially reduce the required silo capacity. 3.3.8.4 Transport RCC would be transported from the mixers to the dam with conveyors. From the site for the mixing station currently identified, the distance is about 400 m which is suitable. Transport on the dam may be with dumpers or the RCC may be placed directly from conveyors or a combination of both. Crane-supported conveyors are now in common usage. These are supplied by Potain, Rotec and others. The typical reach of suitable equipment is shown in Figure 3-13. In this review the use of one such crane is proposed. Most of the RCC can then be placed directly with minimal truck transport, mainly high on both abutments. Truck transport can be eliminated if two placing cranes are used. The choice will ultimately be that of the contractor. Tower cranes are assumed for placing conventional concrete in the spillway as well as handling its formwork and reinforcement. 3.3.8.5 Placing and Compacting Delivery of the RCC is described above. The RCC is dumped on the dam on to previously placed fresh RCC and is bulldozed into place in the required layer thickness. After being tracked in by the bulldozer, compaction is effected by heavy vibrating rollers. Grout for the GEVR (or GE-RCC) can be produced in a grout mixing plant and pumped or carried to the point of placement. The GEVR is compacted using poker vibrators after the RCC has been placed. Smaller hand-guided compactors will be required adjacent to formwork and confined areas, but usually not where GEVR is used. 3.3.8.6 Curing and Protection of RCC Placed RCC requires curing with water for at least 30 days after placement or until covered by fresh RCC, whichever is shorter. In summer the air temperatures are high and night-time placements will probably be required to minimize environmental heat gain. Temperatures of the RCC surface can be controlled using water misters and sprays. Free water has to be kept clear of RCC which is being worked.

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Reach of a large RCC placing crane

Figure 3-13 Plan of Dam Showing Reach of a Large RCC Placing Crane

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3.3.8.7 Placing Schedule The RCC would be placed as continuously as possible for the base of the dam to the crest. The spillway structure in conventional concrete would be constructed after completion of the RCC but the CVC in the ski-jump and the lower part of the chute may be started earlier as an operation independent of the RCC placements. There would be breaks in RCC placement due to rain and possible over-topping of the dam where the probability, frequency and duration of the latter would depend on the size of diversion culvert adopted. 3.3.9 Foundation Treatment

3.3.9.1 Consolidation Grouting The purpose of the consolidation grouting is to ensure that the foundation has reasonable uniform stiffness without significant soft areas. Such areas might arise where the rock contains significant open joints or where blasting during foundation excavation has loosened the rock. In-filled joints (joints which contain clay and other soft material) should not be present to any significant extent as these are confined mostly to the near surface, abutment zone which will be excavated. Tentatively, a depth of grout hole of 3 m set at a spacing of 4 m may be estimated. 3.3.9.2 Dental Concrete Dental concrete should be cast on the foundation where holes have developed as a consequence of the foundation excavation process, and may include areas where the rock is heavily sheared or fractured. The purpose of such concrete is to regularize and shape the foundation. The foundation shape should be such that the RCC can be readily compacted in its vicinity. 3.3.9.3 Grout Curtain and Foundation Drainage The results of the permeability tests are discussed in Report on The Evaluation of Alternative Dam Axes and The Selection of Dam Type. The overall impression is of rock which will in general have low to moderate gout takes, but with some 10% to 15% of the rock absorbing larger volumes. The grout curtain will be installed from the galleries provided in the dam and abutments. The holes should be angled so as to give the best intercept of the fissures and should in any case be angled in the upstream direction to create some distance from the drainage holes. In this case the joints would be oriented such that the holes may be vertical in a plane along the dam axis. A grout curtain corresponding to 0.6 x the local reservoir depth may be assumed subject to a minimum depth of 20 m. Curtain grouting is normally performed in one row down to a depth where the Lugeon values are 3 or lower. It is suggested that the holes in the grout curtain are inclined 15 towards upstream The drainage holes will also be installed from the galleries and will be angled in the downstream direction. Tentatively, the holes should be drilled at 6 m centers and be 100 to 150 mm diameter. The depth of the curtain may be assumed at 40% of the local reservoir head at the gallery subject to a minimum of 15 m. 3.3.10 Comments on Unit Rates on RCC

A unit rate of 564,707 VND/m3 (35.74 USD/m3) has been used in the cost estimates in the Feasibility Study. This includes provision of the all the concrete constituents, mixing, transport and placing. It is not clear how much cement and pozzolan has been allowed for.

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The unit price for cement is 789,000 VND/tone (50 USD/tone) including transport. A unit rate for pozzolan has not been found. The cost of RCC is commonly estimated on the basis of the cost of a) b) c) Providing the aggregate, batching and mixing, transport and placing The cost of cement and pozzolan Facing costs

The cost of item a) is mainly dependent on the size of the dam as RCC construction is capital intensive and varies little with local costs. For a dam of this size, employing crushed coarse aggregate and natural sand, item a) might be about 20 USD/m3. If the price of pozzolan is set to be the same as cement (typically is has a lower cost than this) and allowing 200 kg/m3 for cement and pozzolan combined, the unit rate for the RCC would be 30 USD/m3. Facing costs depend strongly on the methods used. If GE-RCC is to be employed, a budget rate might be 40 USD/m2. As set out above, the reinforced concrete facing to the dam would be eliminated. When these adjustments are made to the cost estimates, the overall cost of the dam is reduced by about 6% compared to the cost estimate in the Feasibility Study. 3.3.11 Arrangements for Dam Safety Monitoring

3.3.11.1 Monitoring Instruments Dam instrumentation is required to verify the design assumptions and demonstrate that the dam is functioning normally and within accepted safety margins. The extent of instrumentation and the frequency of readings should be such that these objectives are achieved but should not be more than necessary. Excessive data collection can negate the main objectives because of the burden of collection and reporting tend to delay reporting, possibly of important event and these event may be obscured by the sheer volume of data. The following dam monitoring instruments and installations are recommended, but the quantities should be reviewed in the Technical Design Phase: Seepage monitoring Total seepage from the galleries should be measured in a weir box installed at a suitable location. If the seepage water is pumped, the weir box should be installed at the pump outlet. All drainage wells and any internal drainage holes that yield water should be monitored individually. Pore pressures in the foundation Electrical piezometers should be installed in the foundation under the dam including the concreterock interface. They would be drilled in to various depths and the leads connected to monitoring boards with the galleries. Standpipe piezometers should be installed from the foundation galleries to various depths. Some 25 electrical piezometers and 15 standpipe piezometers might be allowed for. Tilt of the dam The tilt of the dam should be measured using a combination of pendulums and inverted pendulums. The anchorages for the inverted pendulums should be drilled into the foundation to a depth of at least 20 m. The pendulums would be installed in small shafts formed in the RCC and the spillway concrete. One set of pendulums would be installed in each of the proposed instrumented sections. Studs are required on the crest of the dam for monitoring dam deflections by precise
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survey. At least two studs are required on each of the RCC blocks defined by their induced contraction joints as well as on each of the spillway piers. Opening of induced cracks At the location of induced joints within the galleries and at the dam crest, devices should be installed which can measure the joint opening and any horizontal or vertical displacement across the joint. The installation is, at it simplest, studs on each side of the joint where their distance can be measured with a suitable caliper type instrument. Forty such installations may be required. Concrete temperature The temperature in the concrete should be monitored to verify the design estimates. Temperature sensors are required at selected locations and these are incorporated in the RCC as it is placed. Some 30 to 50 instruments may be required. Earthquake accelerations Two strong motion accelerometers should be installed with one on the crest of the dam and one in the bottom gallery. Two principal instrumented cross-sections are proposed. One would be located in the nonoverflow section where the dam is at its maximum height and one would be roughly centered on the spillway but coinciding with a pier. There are many options for monitoring the various instruments. The instrument leads can be all brought to a central monitoring station where reading can be made automatically or manually. At the other extreme, instrument leads can be collected to a number of terminal boards and read manually. During construction many instruments will be read wherever the cable ends happen to be whereas later the instrument leads would be brought to one or more terminal boards. As indicated above, crack monitoring is proposed to be done manually which has the advantage that the instrumentation readers observe the crack each time it is being measured. Automated electrical measurement is also possible. At the tender design stage the costs and merits of alternative concepts and methods of measurement should be evaluated. 3.3.11.2 General Measurements

A monitoring schedule will be required to cover the construction period, first filling and normal operation. This will form part of the operations and maintenance manual for the Project. It will include inspections, data collection from installed instruments, survey and record keeping. Inspections will be prescribed for the interior and exterior of the dam, the spillway and plunge-pool and the dam abutments, as well as the reservoir slopes. Actions to be taken in the event of unusual instrument readings or occurrences will also be described. This would inter alia give instructions for monitoring and survey after a major flood or earthquake, and would include a spillway and plunge-pool condition survey. The monitoring schedule should be prepared as part of the tender design and it should be revised and finalized before the end of construction. Measurements during Construction and First Filling The primary purpose of these measurements is immediate safety. Yet, they may also bring out interesting details in the overall behavior of the dam and its foundation due to complex factors, sometimes hardly known or scarcely considered in the design. During the construction period the dam will be exposed to high floods. It is essential to take the opportunity of monitoring the behavior of the dam and its foundation during these peak

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floods. The type of instrumentation to be considered is piezometers in the foundation and in the dam and joint and stress meters in the dam. Moreover, measurements carried out during the floods and the first filling will provide starting points for evaluation of the importance and severity of any variations in the behavior of the dam and its foundation. Measurements during Operation Period These measurements should provide information on the behavior of the structure both as a whole and at particular points. Their main purpose is to give a reliable picture of all evolutions, both favorable and such which might cause concern. 3.3.11.3 General Frequency of Measurements

Monitoring frequencies will depend on many factors and will vary over time. Instruments will be read from their time of installation to verify their function and to give base-line data. Regular reading will be made during construction, typically weekly. During first filling, monitoring of many instruments may be daily but may depend on the rate of filling. During the first year of operation most instruments will be read on a weekly or monthly basis, but in subsequent years the frequency may be decreased. Seepage monitoring is likely to remain frequent and possibly continuous throughout the life of the dam. Monitoring frequencies may change in response to observations and occurrences. First Filling All measurements should be made before filling is started (initial operation). The dates of the successive measurements will depend on the level the water has reached in the reservoir. The closer the water is to the full supply level, the shorter will be the interval between the measurements. A series of measurements carried out with the proper instruments should be carried out as follows: When the water reaches of the total height When the water reaches mid-height Every tenth of the total height for the third quarter of the total height Every 2 m of variation for the fourth quarter of the total height

In addition to this, some simple measurements can be carried out daily, such as visual examination of dam faces and abutments, leakage, downstream resurgent springs, pendulums and drainages. During Operation Measurements should be more frequent in the years immediately following the first filling, when active settlement is in progress. The following might apply: Settlement Period: Topometry: four surveys every year Pendulums: weekly measurements Strain gauges: twice weekly measurements Piezometers: weekly measurements Leakage, drainage: daily measurements Continuing monthly measurements of temperature measurement devices

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Normal Operation (after Stabilization of Settlement): The above frequencies can be reduced by half. Not only the frequencies of measurements, but also the number of instruments read can be reduced according to what is learned during the first years of operation.

The cables from the instrumentation in the foundation should preferably be drawn to a central station located in the grouting and drainage tunnel. In order to check scour in the plunge pool, depth measurements by eco-sounding or plumb line should be performed after large discharges over the spillway (> 4,900 m3/s).

3.4
3.4.1

Review of Waterway
Intake

The intake structure as proposed is well conceived and should under normal operational conditions be functional. The air vent should end in a bend or to the side of the structure to prevent objects being sucked to the opening. The intake structure will be founded in rock belonging to stratum IB, the quality of which is considered adequate. The inclination of the cut slopes should be 1:2 in the edQ stratum, 1:1 in the IA strata and 1:0.75 in stratum IB. 3.4.2 Headrace Tunnel

3.4.2.1 General The about 3 km long headrace tunnel will have a rock cover in the range of 45 m to 450 m. It will be excavated in Members 2 and 3 of the lower Song Bung formation in rock belonging to strata IIA and IIB (the main part), and it will be affected by one fault zone of grade IVa (IVa2) and 9 grade IV faults. It is estimated that about 5% of the tunnel will be excavated through tectonically disturbed rock. The invert of the excavated tunnel will have a width of 5 m. The span of the horseshoe shaped tunnel will be 7.6 m. In the Feasibility Study it is assumed that the entire tunnel will be concrete lined with a thickness of the reinforced lining of 0.6 m. Consolidation grouting will be carried out along the tunnel from the intake to the surge tank, in a staggered pattern with five 3 m long holes in sections spaced at 3 m. In a normal section of the tunnel, bolts of 25 mm with a length of 3 m will be placed in a grid pattern # 1.5x1.5 m, which gives10 bolts in each section. A 100 mm thick layer of shotcrete will cover the walls and roof of the tunnel. When passing faults of grade IV the same support will be installed, but the shotcrete will be reinforced by a net 6 mm # 100x100 mm. In the grade IVa-2 fault zone the above support will be applied with the addition of steel sets H200 spaced 1 m. Two adits are considered for the headrace tunnel, one adit 370 m downstream of the intake structure and one adit 42 m upstream of the surge shaft. The distance between the adits will be 2,638 m. With a progress of 20 m per week and considering a reduced progress when penetrating the fault zones, it should be possible to complete the tunnel excavation between the adits in a period of some 70 weeks. It might be possible to avoid the upstream Adit 1 and just have Adit 2 in the downstream end and perform the excavation from the upstream end through the intake. Such a solution would, however, interfere with the construction of the intake structure.

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3.4.2.2 Comment The proposed support is considered conservative and is assumed to accommodate both outer and inner water pressure without considering the rock medium. The outer water pressure will not put any load on the lining if the lining is drained by penetrating holes placed in sections spaced 3 m with three holes in each section, and drilled 1 m into rock. The inner water pressure can be taken by the rock mass provided that the minor principal stress is larger than the inner water pressure or if the ground water table is located at a higher elevation than the pressure line in the tunnel. If this is not the case some leakage from the tunnel will take place. The stress situation in the rock surrounding the tunnel can be determined by means of hydraulic fracturing tests performed from the tunnel as excavation proceeds. The headrace tunnel is recommended to be furnished with a permanent support of fiberreinforced shotcrete, in lieu of cast reinforced concrete lining, except in the upstream 100 m where a cast reinforced concrete lining is proposed to be installed. The permanent shotcrete lining should have a minimum thickness of 50 mm. Where the temporary support already have this thickness, no extra shotcrete is required. The shotcrete lining has to be drained in order to prevent the build-up of outer water pressure. Three drain holes should be installed in sections spaced 3 m. The holes should be drilled 0.5 m in rock. 3.4.3 Surge Tank

3.4.3.1 General The calculations contained in Volume 9, Book 3, Part 3 of the Feasibility Study have been briefly evaluated as basis for the review of the proposed surge arrangements. The proposed surge arrangements, comprising a 15 m diameter shaft with throttle and a 24 m diameter surge tank on top, appears to be well conceived. The shaft diameter is designed with a safety factor of at least 1.5 to the Thoma criteria. The nominal acceleration time of the waterway from the turbine to the surge tank is more than 2 seconds, which is in the high range. Stability calculations are not contained in the Feasibility Report. It is recommended that possible stability problems be evaluated in more detail in the Technical Design Phase, where the weight of the generating units (mass of inertia) needs to be considered. 3.4.3.2 General Engineering Geological Features

In the Feasibility Study the center of the surge shaft is located 42 m downstream of the point where Adit 2 joins the headrace tunnel. The lower 6 m of the shaft has an excavated width of 6 m. From El. 168 m the width is increased to 17 m up to El. 221.5 m. From this elevation the shaft consists of a freestanding cylinder with an inner diameter of 24 m. The part of the shaft located in rock is excavated in rock strata IB and IIA. The support to the surge shaft indicated in the Feasibility Study is consolidation grouting in 3 m deep holes placed in a staggered pattern of 3x3 m, 100 mm of shotcrete and a 1 m thick cast concrete lining. The slopes in the open cut from the ground surface down to El. 221.5 m should be given the following inclinations:

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Inclination of Cut Slopes Stratum edQ IA IB Inclination 1:2 1:1 1:0.6

The benches have heights in the order of 10-12 m and are separated by 3 m wide berms. The space between the toe of the slope and the freestanding part of the shaft at El. 222.5 m is given a width of 6 m. Comment The location of the surge shaft is considered appropriate allowing the excavation of the vertical shaft to be located in IB and IIA rock strata. A convenient way to excavate the shaft in rock is to start by raise-boring a central hole from the tunnel up to El. 221.5 m. The drilling of the rounds can then be performed from a platform, the blasted rock is then stoped into the central hole, mucked out in the tunnel and transported out through Adit 2. Installation of rock support is successively performed as the excavation progresses. The type of support considered is 3 m long fully grouted bolts in the small diameter part and 5 m long bolts where the diameter is 17 m, placed in a grid spaced 3 m and covering the walls with 100 mm of fiber-reinforced shotcrete. The shotcrete should be penetrated by drainage holes placed in a pattern spaced 4 m, and drilled 1 m into rock. Installation of a reinforced cast concrete lining below some +221.5 m is at present not considered necessary. In order to establish the rock stress situation around the shaft it is, however, advisable to perform hydraulic fracturing tests. 3.4.4 Penstock

3.4.4.1 General The diameter of the penstock is undersized and results in a water velocity of 9.5 m/s at full load. Normal velocity for a penstock would be in the range of 6-7 m/s. A narrow penstock would result in unnecessary losses and pressure rise due to water hammer. The pressure rise of the penstock due to water hammer appears to be high and is partly a result of the proposed narrow penstock. The propagation velocity of the pressure wave in the penstock is specified at 771 m/s, which appears to be low. Normal velocity would be more in the range of 1,100-1,200 m/s. 3.4.4.2 General Engineering Geological Features

In the present design the penstock starts at the centre line of the surge shaft and the same dimension as for the headrace tunnel (inner diameter of 6.8 m) is kept for 10 m. From this point, the inner diameter is reduced to 5.2 m over a 10 m long section. This inner diameter is maintained for the rest of the penstock up to the bifurcation. At a distance of 67.9 m a vertical part is introduced between El.155 m and El. 90 m. The lower part of the penstock is inclined 1 towards downstream and has a length of 108.4 m to the bifurcation. The bifurcation is currently located outside the cut slope where two pipes with an inner diameter of 3.4 m conveys the water to the powerhouse The rock is supported by 4 m long bolts placed in a staggered pattern, spaced 3 m in the larger sections and by 3 m long bolts in the same pattern in the bifurcations. Cast concrete linings with thickness of 0.3 m and 0.5 m are considered. In addition the penstock is

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proposed to be steel lined. Comment A vertical penstock underground is easier to excavate than an inclined penstock. The economical evaluation in the Feasibility Study also showed that a vertical penstock is more feasible and is supported. The steel lining of the whole length of the penstock is considered conservative. The present location of the vertical part of the penstock gives the shortest distance between the bend and the ground surface of some 45 m. For preliminary planning purposes, the required cover to prevent hydraulic fracturing of the rock mass in an unlined tunnel can be determined using the formula: CRM = hS x W x F / R x cos Where: CRM = minimum rock cover hS = static head W = unit weight of water R = unit weight of rock = slope angle F = safety factor Usually a safety factor F=1.5 is selected. With a static head of 71 m, a unit weight of rock of 2.65 t/m3, and a slope angle of 40, the minimum required rock cover can be calculated to be 52 m. Thus it is recommended that the vertical part of the penstock be shifted 35 m towards upstream. From a hydraulic point of view it might be feasible to install a thin (250 mm) concrete lining with drainage holes. Only the part of the penstock located closer to the powerhouse than 75 m is considered necessary to steel line. To verify this assumption the stress situation should be established by means of hydraulic fracturing tests. The excavation of the vertical part of the penstock is suggested to be performed by means of raise-boring. It is considered possible to support the rock in this part by means of spot bolting and shotcrete. The location of the powerhouse is recommended to be maintained, but the cut slope should be shifted towards downstream making it possible to cast the concrete against the rock. The angle of the cut slopes should be optimized, as it may be optimal to make vertical cuts supported with rock bolts and shotcrete. With such a solution the bifurcation will be placed inside the rock

3.5
3.5.1

Review of Power Station


Layout in the Feasibility Study

3.5.1.1 General In general the layout of the surface powerhouse is well conceived. The layout is to a large extent given by the choice to excavate from the surface to locate the turbines. This gives a very high powerhouse as all transports will arrive on the surface and the equipment has to be brought down to their respective locations. See also the comments regarding the possibilities for an underground location of the powerhouse in Section 3.5.4. The ground area of the powerhouse is given by the location of the units and the inlet valves, in addition to the space necessary for transport and assembly. There is ample space for the rest of the equipment due to the additional height of the powerhouse, which provides for

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more floors than usual. The design of the power station is of the outdoor type comprising a superstructure and a substructure founded on competent rock. The superstructure provides protective housing for the generator and control equipment as well as structural support for the main crane of the machine hall. The superstructure is prolonged and provides for an erection bay that protects component assemblies during inclement weather. The substructure or foundation of the powerhouse consists of concrete necessary to form the draft tube, support the turbine stay ring and generator, and encase the spiral case of the Francis type turbines. By utilizing the room at elevation +121.2 m in the erection area as an erection pit, the total height of the surface structure can be reduced by some 4 m. 3.5.1.2 Width of Powerhouse Minimizing the dimensions is one important principle of controlling cost and construction schedule of a powerhouse. The minimum possible width of a powerhouse is determined by the space needed by the turbine or generator with added necessary space for the construction and operation, concrete walls, and space for transport and erection. For Francis units in the lower speed range (here 250 rpm), the generator enclosure with corridor on one side will determine the minimum width of the powerhouse. The width of the corridor has been selected at 3.75 m, but could be reduced to about 2 m. The corridor is used for communication, electric panels, etc. The turbine inlet valves are normally placed inside the machine hall with easy access for installation and maintenance by the main crane. To ensure safe erection and dismantling it is recommended that the center of gravity of the valves is located within covering range of the main crane. With this layout, the turbine valves may require some space outside the boundary of the machine hall. The solution is to establish local alcoves for the valves. The size of such alcoves depends on the angle of intersection between the inlet pipe and the machine hall wall. Considering all design objectives, the optimum angle between the inlet pipe and the machine hall wall will be about 60 degrees. 3.5.1.3 Powerhouse Orientation By giving the powerhouse a positive rotation of some 20 degrees, the powerhouse would be oriented more in parallel with the contour lines of the surrounding terrain. The advantage would be less excavation, more straight tailrace canal and the possibility of reducing the powerhouse width as discussed in the section above. 3.5.1.4 Structural Concrete The concrete walls of the powerhouse are generally very thick, varying from 1.9 to 2.1 m. It is believed that the concrete quantities can be reduced by making use of concrete with higher strength thus reducing the thickness of the walls. Dynamic loads from the generating units are being transferred to the superstructure. If natural frequencies of structural components coincide with frequencies generated by the units, vibration problems may occur. 3.5.1.5 Location of Transformers The suggested location of the main transformers in the open air at elevation +125.5 m has resulted in very long high amperage busbars. Locating the transformers at a lower level and closer to the generators can save both losses and costs. The room between elevation +101.4 m and +112.25 m at the upstream wall could be modified to house the transformers. The

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transformers can be transported and lifted through the machine hall. 3.5.1.6 By-pass Arrangement The drawings do not show any by-pass arrangements in the powerhouse. In a situation where the waterway needs to be emptied, the powerhouse would need to have a by-pass arrangement. A normal arrangement would be to install a pipe from upstream of the turbine valve to the tailrace canal. 3.5.2 Number of Units

For a given installed capacity the optimum number of units depends on a number of factors, such as (i) size of the units in the total power system, (ii) construction cost, (iii) energy loss during maintenance, and (iv) turbine efficiency. In the case of Song Bung 4 Hydropower Project two and three units were investigated in the Feasibility Study at least taken items (ii) and (iv) above into account, giving an optimum for two units. The proposal of two units is supported as item (i) above is hardly applicable due to the small size of the units, less than 100 MW, compared to the total system capacity of over 11,000 MW, and item (iii) can be alleviated if maintenance is performed during the dry season when only one unit is normally operated. 3.5.3 Engineering Geological Features

3.5.3.1 General Different layouts for the powerhouse have been considered, and both underground and surface locations have been studied in the Feasibility Study. The rock of the Song Bung formation is competent and in case the foundation of the aboveground structure is placed on rock belonging to stratum IIA, no problems are to be expected from a stability point of view. The same is the case for an underground solution. If the cavern is located in stratum IIA, it is considered possible to excavate and support it with a reasonable support. 3.5.3.2 Surface Powerhouse The selected solution in the Feasibility Study is an aboveground powerhouse. As mentioned above the competent rock conditions of the area with the foundation located in IIA rock makes this alternative feasible. The extensive excavation with rock fill placed in an area between the cut slope and the concrete structure is not considered appropriate. A better solution would be to move the cut slope towards downstream and make the part against which the powerhouse structure will be cast nearly vertical. In order to make this possible it is necessary to support the slope with bolts and shotcrete, successively as the excavation proceeds. The excavation should be carried out by means of smooth-blasting and the support of 4-6 m long grouted bolts placed in a grid 3x3 m. The rock surface should be covered with a 50-100 mm thick layer of fiber-reinforced shotcrete. With this solution the bifurcation would be located inside the rock. 3.5.3.3 Underground Powerhouse An underground powerhouse can convey the large forces from the generating equipment to the surrounding rock mass. In the case with the competent rock of the Song Bung formation this can be accommodated without problems. An underground location is also favorable in case the Project is exposed to seismic loads and also reduces the exposure to large variations in tail water levels.

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The type of support that may be required to stabilize the excavation is 6 m long grouted bolts in the roof placed in a grid with 3 m side. In the upper parts of the walls, 2 to 3 rows of longer (9 m) bolts might be required. The main support of the walls should also be 6 m long bolts spaced in a grid with 3 m side. The roof should be covered with a 200 mm thick layer of fiberreinforced shotcrete while the thickness on the walls could be in the order of 100 mm. 3.5.4 Considerations Regarding Location of an Underground Powerhouse

3.5.4.1 General Layout In the Feasibility Study the location of an alternative underground powerhouse has been located in the downstream end of the tunnel. A possibility is, however, to place an underground powerhouse in the upstream part with a short headrace tunnel and a long tailrace tunnel. In this way the major part of the tunnel will be un-pressurized, and have a larger cover and to a greater extent be located in IIB rock. With such a solution the surge shaft upstream of the powerhouse can be eliminated. The short headrace tunnel is in this case suggested to be concrete lined with reinforced concrete preventing leakage. The vertical penstock and the lower horizontal part would be steel lined. The bifurcation would be located in the lower part of the tunnel. With this solution, a tunnel located at the present Adit 1 would serve as the main access tunnel to the powerhouse and from this tunnel construction tunnels will be excavated. An example on this type of solution is given in Figure 3-14 and Figure 3-15 below. In this case an underground transformer hall was constructed. The construction tunnels will be: From the main access tunnel, construction adits leading to the galleries of the powerhouse and transformer halls cavern as well as to the draft tube gate hall will be excavated. A continuation of the main access tunnel after passing the powerhouse cavern will lead to the lower part of the vertical penstock. A tunnel from the main access tunnel to the tailrace tunnel and the lower part of the cavern.

Figure 3-14 Example of Design of Underground Power Station-Plan

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Figure 3-15 Example of Design of Underground Power Station-Section

The construction tunnel down to the tailrace tunnel will serve as a surge tunnel (it should be noted that a construction tunnel with an area of say 50 m2 and an inclination of say 1:10 would give a surge area of 50 x 10 = 500 m2), and it is important that the portal of this tunnel is located at an elevation high enough to prevent the surge water from reaching the main access tunnel and flood the powerhouse. The tunnel will also serve as a construction adit for the upstream part of the tailrace tunnel. In Figure 3-15 a surge chamber is also shown, which is required in case the surge tunnel is insufficient. The cable tunnel can be vertical and equipped with an elevator for emergency use. As an alternative to the transformer hall indicated on Figures 3-14 and 3-15 an aboveground location of the transformer is possible The powerhouse cavern will be excavated starting with the top heading, with a span in the order of 8 m and a height of 8 m, being taken out. When the roof of this tunnel has been supported in accordance with the description above, the rock on both sides of this top heading is stoped out to the full width of the cavern and supported. The remainder of the cavern will be excavated by benching down from this top heading. The spoil would be transported out via the top heading or the main powerhouse access tunnel as appropriate. The material from the lower part of the cavern and the upstream part of the tailrace tunnel will be taken out through the future surge tunnel. As the excavation progresses, the walls have to be supported successively by bolts and shotcrete as stated above. The tailrace tunnel is recommended to be supported by means of bolts and shotcrete in accordance with Section 3.2.3. Drainage holes should penetrate the shotcrete layer in order to prevent the build-up of outer water pressure when the tunnel is emptied. In the downstream end of the tailrace tunnel a tunnel has to be excavated down to the tailrace. From the upper part of this adit, a small cavern from which stop-logs can be placed in the tunnel will be constructed according to Figure 3-16 below:

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Figure 3-16 Example of Design of Downstream End of Tailrace Tunnel for Underground Power Station

As an alternative to the stop-log chamber indicated on Figure 3-16 an aboveground concrete structure connected to the tunnel with a shaft might be feasible. A further option might be an outlet structure in open cut. 3.5.4.2 Comment It is recommended that an alternative with an underground powerhouse located in the upstream end be studied in the Technical Design Phase. The main advantage with this location is that the surge shaft upstream of the powerhouse can be avoided. Further the extensive excavation for the aboveground powerhouse is not required, but only minor excavations for the tailrace outlet..

3.6
3.6.1

Review of Electromechanical Equipment


Gates
Spillway Radial 5 15.0 x 16.0 16 145 Intake Fixed Wheel Plate 1 6.2 x 6.2 50 55

The following gates have been proposed for the spillway and intake:
Item Type Number of Units Dimensions, m Design Head, m Weight per Unit, tones

All gates are proposed to be operated by hydraulic cylinders. Similar gates have been used in other hydropower projects in Vietnam in recent years, and we concur with these proposals. 3.6.2 Turbines Number of units: Type of turbine: Turbine output: Rated head: 2 Francis with vertical shaft 80 MW 105.5 m
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The main parameters chosen for the turbine are as follows:

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Nominal runner diameter: Rated speed: Maximum flow rate: Suction head: Setting elevation:

2.8 m 250 rpm Qt = 85.88 m3/s Hs = -5.0 m m = 90

The height of the draft tube is 3.6 m and the length is 14 m. The outlet section of the draft tube is divided into two orifices with dimensions (w x h) 3.65 x 3.85 m. The runner will be made of high durable stainless steel, possible arc-welding or casting. Two servomotors drive the guide vanes of the turbine. The turbine will be equipped with a electric-hydraulic governor, digital with PID regulator rule and oil pressure class 6.3 MPa. The main data given seems reasonable. The rated speed could possibly be chosen as 300 rpm, but there are only marginal differences and we concur with the selected parameters. 3.6.3 Hydraulic Stability

3.6.3.1 General The Consultant has calculated surges and hydraulic stability with the simulation program ALAB. The conclusion is that the power plant is designed in a conservative and relatively safe manner, and the surges are within safe limits. Turbine Parameters: Turbine closing and opening time: Maximum water level of the reservoir: Water level at outlet: Flow before load rejection: 8 seconds +227.5 m +96.0 m 172 m3/s

3.6.3.2 Results Full Load Rejection Two units operating at full load at load rejection gives the following results: Maximum surge level (in surge tank): Maximum spiral casing pressure: Runaway speed: Runaway speed with locked servomotors: +241 m 154 m 383 rpm 489 rpm

Start-up of one unit and full load rejection One unit is operating at full load and unit 2 is started and loaded up to full load. A full load rejection after about 2 minutes gives the following results: Maximum surge level (in surge chamber): Maximum spiral casing pressure: Runaway speed: +242.2 m 153 m 383 rpm

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3.6.3.3 Comments The chosen values for the waterway and turbine seem to function well. The maximum upsurge is 2 m lower than the top level of the surge tank of +244 m. With 8 seconds closing time of the turbine guide vanes, the maximum waterhammer pressure is 154 m. The static head in front of the turbine is 137 m, which gives a pressure increase of 24%. An increase of the closing time of the turbines can reduce the waterhammer pressure. Hydraulic stability of the waterway and the two units is controlled and hydraulic stability seems to be acceptable. 3.6.4 Auxiliary Equipment in the Power Station Water supply system Fire fighting system Air compression system Water drainage and dewatering systems Oil pressure system Hydraulic measurement system

Preliminary descriptions and data are given for the following auxiliary systems:

These will all be specified in the Technical Design Phase, but we concur with the data and descriptions given at this stage. 3.6.5 Single Line Diagram

The overall single line diagram of Song Bung 4 Hydropower Project have been based on two generator-turbine units, with a rated capacity of 92 MVA (78 MW), connected to a 220 kV power system through two step-up transformers 13.8/230 kV with a rated capacity of 100 MVA. The use of generator-transformer block diagram gives a flexible and simple operation. It is proposed to make synchronization possible both at the generator circuit breaker and at the 220 kV unit circuit breaker. The latter is deemed unnecessary, but is according to Vietnamese standard and gives only a minor extra complication of the control system and can thus be accepted. 220 kV is proposed as the transmission voltage and the power will be transferred to the nearby Thanh My 220/110 kV substation over a 220 kV double circuit over-head transmission line. 110 kV is also a viable transmission voltage, but we agree to the proposed voltage of 220 kV, as the main bulk of the produced power will be transferred over a longer distance. The 220 kV switchyard is arranged in a double busbar scheme with a bus coupler and an bypass disconnecting switch on the outgoing feeders. The bypass switches is not deemed strictly necessary, but gives an extra flexibility at a marginal cost. We concur to the proposed alternative. Auxiliary power supply is proposed to be supplied by two auxiliary power distribution transformers connected to each unit. Backup will be provided from the 35 kV transmission line reused after construction. There will also be an emergency diesel generator. This is deemed to be a normal solution of auxiliary power supply for a power station of this size.

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Excitation power for the generators will be provided from the generator unit voltage system through the excitation transformer. We concur with the general layout proposed for the main single line diagram. 3.6.6 Generators

The power rating of the generators is determined of the rating of the hydraulic turbines. A normal generator voltage would be in the range of 10 kV to17.5 kV, based on nominal isolation of stator winding, number of pole pairs and rated current of the conductor in stator winding. At this stage a generator voltage of 13.8 kV is proposed, corresponding with generator voltage levels of existing hydropower plants in the system. This value will, however, be determined in the Technical Design Phase. The main specifications of the generator are as follows: Type: Rated power: Power factor: Rated voltage: Speed: Insulation class: Frequency: Number of units: Three phase, synchronous, vertical shaft 92 MVA (78 MW) 0.85 13.8 kV 250 rpm F 50 Hz 2

The excitation system of the generator is of the static type using 3-phase thyristor bridge rectifier supplied by an excitation transformer. The total weight of the generator is estimated to 560 metric tones, including a rotor weight of 280 metric tones. This is far heavier than would be expected from a recognized international supplier. The rotor weight is dimensioning for the powerhouse overhead traveling crane and for the civil support structure of the crane. It is in our opinion important that the technical specification opens for different designs (e.g. not include requirements for large moments of inertia, which will inevitably make for a heavy rotor). This item should be verified before the design of the powerhouse is finally determined. We concur with the main data of the generators, but not with the weight estimates with subsequent design requirements of the powerhouse crane with its civil support structure. 3.6.7 Generator Transformer

The generator transformer is of the 3-phase type with two windings, outside placement, natural oil cooling, forced air cooling (ONAF), and equipped with an off load tap changer, and with the following specifications: Rated power: Off-load tap changer range: Vector ground: Percent short circuit voltage: Number of units: 100 MVA 2302x2.5%/13.8 kV Ynd-11 12% 2

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The Feasibility Study actually proposes an on-load tap changer, but this is probably a misprint as the specification is typical for an off-load, and it should anyhow be an off-load. The rated power of the transformer is somewhat higher than the generator to cover for the maximum continuous output. We concur with the proposed main data of the generator transformer. 3.6.8 220 kV Switchgear

A conventional air insulated switchgear is proposed, located at some distance from the powerhouse, where a flat area suitable for the purpose can be obtained. A gas insulated switchgear could be an option as it could be located at the powerhouse, but is most probably much more expensive and we thus concur with the proposed alternative. The main switchgear equipment will have the following data: 220 kV circuit breaker: 220 kV disconnecting switch: 220 kV current transformer: SF6 type, 245 kV, 1,250 A, 31.5 kA/3s 245 kV, 1,250 A, 31.5 kA/3s. 245 kV, 200-400/5 A (for main transformer circuit), and 400-800/5 A (for 220 kV circuit). 220 kV voltage transformer: Lightning arresters: 230: 3 /0.11: 3 /0.11: 3 kV Zinc oxide type 192 kV, 10 kA

Numerous switchgears of this type at power stations and substations have been erected in Vietnam, and it is recommended to use the standardized solutions developed for these. 3.6.9 Auxiliary Power Systems

The auxiliary power consists of a 400 V AC system and a 220 V DC system. These are described in single line diagrams 12006C-TD-NM-D06 and D05, respectively. Both are built with backup in mind and we do not have any objections to these proposals.

3.7
3.7.1

Review of Transmission
General

A short, some 35 km long, double circuit 220 kV overhead transmission line from Song Bung 4 Power Station to a new substation at Thanh My is proposed in the Feasibility Study. Included in the cost of the transmission line is also the two receiving 220 kV switchgear feeders at Thanh My. These will most probably be designed in a similar way as the 220 kV switchgear at Song Bung 4 Power Station. 3.7.2 Transmission Line Type of line: Rated voltage: Conductor: Overhead Ground Wire: Length of lines route: Double-circuit line 220 kV ACSR-300 or equivalent OPGW-70 or equivalent + GSW-70 33.8 km

The basic data of the transmission line are as follows:

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Insulator: String of suspension insulators: String of tension insulators: String of jumper suspension insulators: String of tension insulators for lightning: Tower: Foundation:

Glass or porcelain 16 disc (70daN) 17 disc (160daN) 16 disc (70daN) 1 disc Steel tower for double circuit line Reinforced concrete, casted in place.

No technical problems are foreseen for the transmission line.

Tentative Construction Schedule

An outline of a tentative construction schedule is given in Figure 2 showing major items that are on the critical path.

4.1

Dam Structure and River Diversion

The item for the diversion culvert in Figure 2 includes temporary cofferdams required for its construction, excavation and concrete placement with subsequent removal of the temporary cofferdams. The foundation excavation item covers excavation, dental concrete, consolidation grouting and initial clean-up. The grout curtain, foundation drainage curtain and internal drainage holes would be made from the galleries and would not be on the critical path. The foundation preparation in the riverbed would be completed in 2009 to allow a prompt start of RCC placements in early 2010. This may entail constructing the cofferdams of limited height earlier than shown on the schedule, but with risk of these being lost in a flood. Cofferdams have been constructed with RCC and this may be considered also here. The foundation preparation would consist of removal of loose blocks, dental concrete, leveling concrete and consolidation grouting. The diversion closure is shown as a milestone signifying the start of reservoir filling. Following detailed analysis, the diversion closure may possibly start earlier than shown to ensure filling of the reservoir by mid 2012. It is also a lengthy process where typically one of the two diversion culverts is closed initially and fitted with a concrete plug followed by plugging the second culvert, which has to be done behind stop-logs. Time has to be allowed for casting the plugs, cooling and grouting them. This process might take as much as 3 months per plug. The last activity would be the pre-excavation of the plunge pool downstream of the dam and spillway structure. The excavation would be carried out in dry conditions during the filling of the reservoir, for a period of some 3 months, and should start immediately after diversion closure.

4.2

Waterway

The open-air work at the intake (earth and rock excavation) is estimated to be performed during a period of some 8 months. The time required for casting of the structure is estimated to be in the order of 1 year.

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Open-air work at the portals of the adits will be carried out during a three-month period. The time required for the excavation of the adit tunnels (Adit 1 and Adit 2 on the headrace tunnel and Adit 3 on the lower part of the penstock) is estimated to be 2 months assuming a rate of 20 m/week. The tunneling proper of the headrace tunnel can start 5 months after the start of the open excavation from Adit 1 and after 4.25 month from Adit 2. The tunneling rate in the headrace tunnel proper is estimated to be in the order of 20-30 m/week, which means that the headrace tunnel can be completed after some 15 months. The excavation of the surge shaft down to El. 222.5 m is estimated to be carried out during a 9-month period. Raise-boring the central hole with a length in the order of 68 m, from the tunnel up to El. 222.5 m, is estimated to be possible to perform during a 4-week period. The excavation is then carried out by stoping the blasted rock, through the central hole. The walls of the shaft are successively supported as the excavation proceeds. The stoping of the shaft is estimated to be possible to perform within a 4-month period. The horizontal parts of the penstock are considered possible to excavate at a rate of 20 m/week which means that the excavation can be completed in a period of 1 month if excavation is carried out on two fronts in the lower part. The vertical part will preferably be excavated using raise-boring. The required time to excavate and support this part might be in the order of 3 months. The installation of lining and steel lining of the penstock might require a 6-month period. The construction schedule in Figure 2 assumes concrete lining of the headrace tunnel in accordance with normal Vietnamese practice. As, however, mentioned in Section 3.4.2 an unlined tunnel is recommended that will shorten the construction time of the tunnel by over one year.

4.3

Power Station and Equipment Installation

The construction schedule in the Feasibility Study is divided into thee parts; hydromechanical equipment, electromechanical equipment and electrical equipment at the 220 kV switchyard. The first two are consecutive and estimated at 5 and 12 months, respectively. That is deemed as reasonable assumptions. The construction time of the 220 kV switchyard equipment is estimated at 7 months and this is also a reasonable assumption. This construction is also to a large extent independent of the powerhouse construction and is not on the critical line.

4.4

Transmission

The construction time of the 220 kV transmission line is estimated at 5 months and that is deemed reasonable. Acquiring right-of-way is usually critical for building of large overhead transmission lines, but there should be ample time to do all the necessary preparations as the transmission line should not come on the critical line.

4.5

Initial Filling of Song Bung 4 Reservoir

With the current construction schedule, see Figure 2, commissioning of the first unit is assumed at the beginning of July 2012 when the reservoir should be filled to the Full Supply Level of +222.5 m. Filling of the reservoir should be carried out during the last dry season for better control of the rate of filling and for excavation of the plunge pool in dry conditions. Based on 28 years of historical data (1977-2004), filling of the reservoir up to +222.5 m by July can be achieved for 18 years (64 %) if the filling commences at the beginning of December and a compensation flow of 7.2 m3/s (10% of mean annual flow) is by-passed the dam. For 8 of the remaining years the reservoir would be almost filled up to +222.5 m, but for the two driest year on record, 1982 and 1989, the reservoir would only be filled up to some

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+206 m and +170 m, respectively, at the beginning of July. For the year 1982, the reservoir would be filled up to +222.5 m in time for commissioning of the second unit at the beginning of October, while for a dry year like 1989 the reservoir would not be filled at all during the year. In spite of the small probability of not reaching the Full Supply Level before the commissioning of the two units, it is tentatively recommended that filling of the reservoir should commence at the beginning of December in the last dry season. A plan for filling of the reservoir needs to be studied in the Technical Design Phase to amongst others take the following into account: Provision of water downstream of the dam during filling. Controlled raise of the water level, i.e. filling during the dry season if possible. Construction of the plunge pool in dry conditions.

For provision of compensation flow downstream of the dam during impounding of the reservoir, a valve could be installed in the first plug of the diversion culverts and connected downstream of the plunge pool excavation with pipes.

4.6

Overall Tentative Construction Schedule

The tentative construction schedule for Song Bung 4 Hydropower Project shown on Figure 2 gives a total construction period of 3.75 years after commencement of the main works. The critical path of the construction will essentially be the following: Construction of the power station and erection of the electromechanical equipment. Completion of the dam and spillway structure, except for the spillway gates, by the end of 2011 to allow filling of the reservoir during the last dry season. Excavation of the plunge pool in dry conditions.

5
5.1
5.1.1

Cost Estimate
Review of Cost Estimate in Feasibility Study
Preparatory Works

5.1.1.1 Access Roads Unit rates for access roads varies to a large extend depending on the local conditions, such as topography, geological conditions, need for bridges, etc. In the Feasibility Study a common unit rate of 8 billion VND/km was assumed, and considering the conditions in the Project Area, this unit rate seems realistic. This item should also include the relocation of National Road No. 14 D that was estimated at 9.30 million USD in the Feasibility Study 5.1.1.2 Site Preparations This cost item includes leveling of sites, electrical and mechanical works for the site, communications for the site, temporary houses for EVN, etc, and the cost given in the Feasibility Study of 5.10 million USD seems realistic.

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5.1.2

Civil Works

A comparison with the main unit rates agreed in the construction contract for the nearby located Song Tranh 2 Hydropower Project, signed in August 2005, reveals that the unit rates adopted in the Feasibility Study on Song Bung 4 Hydropower Project, with a similar layout, are reasonable as seen in the table below:
Cost Item Structural Concrete, Open-air, M200 Structural Concrete, Open-air, M250 Structural Concrete, Open-air, M300 RCC Tunnel Lining Reinforcement, Open-air Reinforcement Underground, Tunnel Steel Ribs Tunnel Excavation, Large Tunnel Tunnel Excavation, Small Tunnel Unit Rate FS, USD 49.2-56.6/m3 52.4-61.6/m3 66.6/m3 3 35.7/m 85.6-86.1/m3 627/ton 763/ton 837/ton 27.1/m3 3 37.3/m Unit Rate Song Tranh 2, USD 51,8/m3 55.2/m3 64.7/m3 3 34.1/m 85.0/m3 650/ton 845/ton 950/ton 29,3/m3 3 40/m Difference USD -2.6-4.8/m3 -2.8-6.4/m3 1.9/m3 3 1.6/m 0.6-1.1/m3 -23/ton -82/ton -113/ton -2.2/m3 3 -2.7/m

In the cost estimate for civil works for Song Bung 4 Hydropower Project it is recommended that the unit rates applied in the Feasibility Study are maintained apart for the following items: Reinforcement underground to be increased to 850 USD/ton, in accordance with the table above. Steel ribs to be increased to 950 USD/ton, in accordance with the table above. Tunnel excavation for large tunnels to be increased to 30 USD/m3, in accordance with the table above. Tunnel excavation for small tunnels to be increased to 40 USD/m3, in accordance with the table above. Raise Boring is increased to 2,000 USD/m, in accordance with Section 3.2.4. Ankerbolts is increased to 12.5 USD/m, in accordance with Section 3.2.4. Temporary works by the civil works contractors, such as services roads and auxiliary works (camps. workshops, storages, etc.), and the costs given in the Feasibility Study have been adopted. Operation building located close to the power house, and other works in the power house. Mechanical and Electrical Works

In the cost estimate for civil works, the following items are included:

5.1.3

A review of the estimated costs for the mechanical and electrical works have been made in this PPTA based on various cost data and assuming international competitive bidding, with the following costs compared to the Feasibility Study:
Cost Item Hydro-mechanical Equipment Power Station Equipment PPTA MUSD 15.08 32.16 FS MUSD 7.36 32.68

As seen in the table above, the estimated costs for the power station equipment (turbines, generators, transformers, etc.) is nearly identical, but the estimated costs for the hydro-

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mechanical equipment (gates, penstock, etc.) are considerable lower in the Feasibility Study. The estimated cost for the power station equipment given in the Feasibility Study is maintained. The estimated cost for the hydro-mechanical equipment given in the Feasibility Study is also recommended to be maintained, as most of this equipment can be manufactured in Vietnam while the review assumed foreign suppliers and international competitive bidding. 5.1.4 Transmission

The costs for Transmission given in the Feasibility Study is recommended to be used as these costs are site specific and therefore realistic. 5.1.5 Engineering and Administration

The costs for Engineering and Administration of 11.38 million USD given in the Feasibility Study is recommended to be used, as these costs are specified in detail and therefore realistic, but excluding the costs for supervision consultant that is included in Section 5.4, and including a contingency of 10%, giving a total of 12.52 million USD.

5.2

Environmental Management Costs

The Environmental Management Costs for Song Bung 4 Hydropower Project is estimated at 0.62 million USD, including 10% contingencies, according to the Environmental Impact Assessment (EIA) Report.

5.3

Resettlement and Social Mitigation Costs

The Resettlement and Social Mitigation Costs for Song Bung 4 Hydropower Project are estimated at 19.83 million USD, including 10% contingencies but excluding Independent Monitoring Services included in Section 5.4, according to the Resettlement and Ethnic Minority Development Plan (REMDP) Report.

5.4

Implementation Support

As mentioned in Section 6.1.3.3, it is intended that international and domestic consultants will be recruited to assist in the implementation of the Project for the following services with an estimated cost of 5.10 million USD, including 10% contingencies: Implementation Supervision Consultant, with an estimated cost of 4.95 million USD. Independent Monitoring Services, with an estimated budget of 150,000 USD.

5.5

Cost Structuring

In the Feasibility Study a flat rate of 11% is added for contingencies of the total of all cost items, but it is recommended that the following percentages are used for contingencies and miscellaneous costs:
Project Component Preparatory Works Civil Works Sub-component Preliminary Works Dam (RCC) Spillway Waterway (Underground) Power Station (Surface) Contingencies, % 10 10 Miscellaneous, % 10 5 5 10 15

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Switchyard Mechanical Equipment Electrical Equipment Transmission Engineering and Administration Environmental Management Costs Resettlement and Social Mitigation Costs Implementation Support 5 5 7 10 10 10 10

5.6

Tentative Total Investment Cost

A tentative cost estimate for Song Bung 4 Hydropower Project is given in Table 2 based on the estimates outlined above. The total investment cost is estimated at 206.8 million USD including physical contingencies, but excluding price contingencies, taxes and financial costs, as summarized in the table below:
Estimated Investment Cost in Million USD Cost Item Preparatory Works Civil Works Electrical and Mechanical Works Transmission Environmental and Social Mitigation Costs Engineering and Administration Implementation Support Total Investment Cost Cost in MUSD 23.8 95.6 42.0 7.3 20.5 12.5 5.1 206.8

The estimated total investment costs given in the table above do not include for the following recommended or commented technical issues given in Chapter 3:
Part Dam Spillway Sub-part RCC Cofferdam Chute Plunge Pool Plunge Pool Rock Support Rock Support Diameter Length Overall Item Redesign Reduced Level Dividing Walls Deeper Level Support of banks Unlined Unlined Increased Reduced steel-lining and reduced concrete lining Dimensions and Rearrangements Estimated Cost MUSD -5.8 -0.2 +2.5 +1.5 +0.7 -6.5 -0.4 +0.6 -1.4 -0.5 -9.5

Headrace Tunnel Surge Arrangements Penstock

Powerhouse (Surface) Total

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The recommended omission of the gantry crane at the spillway is not included in the table above, as it seems not to have been included in the cost estimates in Volume 7 of the Feasibility Study. A possible cost saving by an underground powerhouse has not been accounted for, as this alternative will be investigated by PECC3 in the Technical Design Phase. The total cost of Song Bung 4 Hydropower Project, including price contingencies, taxes and financial charges, are accounted for in Chapter 8.

6
6.1
6.1.1

Implementation and Procurement


Project Implementation
Implementation Schedule

Loan consideration by the ADB Board is scheduled for December 2006. Preconstruction activities, such as detailed design, preparation of bidding documents, tendering and awarding of supply and construction contracts should be completed by December 2008. Preliminary construction activities are planed to be started in January 2008. Construction of the main components of the Project will commence at the beginning of 2009 and take 3.5 years until commissioning of the first unit and another 3 months for commissioning of the second unit for commercial operation by mid 2012. An Implementation Schedule for Song Bung 4 Hydropower Project has been prepared, based on current information, as shown in Figure 3 with the following milestones: Approval of the Feasibility Study by November 2006. Approval of the loan by ADBs Board by mid-December 2006. Preparation and approval of the Technical Design and Bidding Documents by March 2008. Recruitment of Implementation Supervision Consultant by February 2008. Signing of contracts for civil works by December 2008. Signing of contracts for electromechanical works by December 2008. Commencement of main construction works by January 2009. Commissioning of the Project by mid 2012.

The activity on the critical path is the approval of the Technical Design and Bidding Documents, and any delay would also delay the completion of the Project. It should be noted that commencement of the main works in January have some advantageous as follows: The works will start at the onset of the dry season when excavation works will be prominent. The filling of the reservoir can be scheduled for the last dry season for better control of the rate of filling, and for excavation of the plunge pool in dry conditions.

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6.1.2

Implementation Agency

6.1.2.1 General The Implementing Agency for the proposed ADB loan for Song Bung 4 Hydropower Project will be Hydropower Project Management Board No. 3 (ATD3) in Da Nang, a project management unit within EVN responsible for development of hydropower projects in Central Vietnam. ATD3 reports to EVNs Vice President for Generation Construction. ATD3 is authorized by EVN to carry out project management of new hydropower plants in Central Vietnam from the initial stages of river resource planning, pre-investment work, and construction until the plant becomes operational. Since its inception in 1995, ATD3 has managed several projects funded by international donors, including SIDA and JBIC. In addition it has managed other investment projects funded by EVN. Similar project management boards manage other investments in generation, transmission and distribution projects in other parts of Vietnam. The following is an organizational chart of ATD3:
Director Tran Van Hai

Department of Environment & Resettlement Deputy Director Tran Ngoc An

Technical Department Deputy Director Le Duong Thuan

Department of Investments in HP (Vu Gia Thu Bon rivers) Deputy Director Nguyen Van Le

Department of Investments in HP (Song Ba) Deputy Director Dang Van Tuan

Project Department Nguyen Van Chuang

Planning & Economic Department Trinh The Dung

Organisationadministrative Department Vu Duc Toan

Finance & Accounting Department Nhu Thiep

Le

Materials & Equipment Department Nguyen Van Son

ATD3 currently has around 130 employees, with specialists in engineering, environmental, resettlement, economic and finance, of which some 100 have management experience from previous hydropower projects in Vietnam. Presently, ATD3 is managing four hydropower projects under construction: A Vuong, Song Ba Ha, Song Tranh 2 and An Khe-Ka Nak. A brief description of the various departments within ATD3, relevant to the implementation of Song Bung 4 Hydropower Project, is given below apart from the Finance and Accounting Department that is given in Section 8.6. 6.1.2.2 Environmental and Resettlement Department The Environment and Resettlement Department act as an advisory body to the Director of ATD3, and the compensation committees, for management of compensation, resettlement and environmental issues of the hydropower projects under management of ATD3. Other responsibilities include coordination with local government agencies in related issues and handing over possession of sites to contractors. The department has a total staff of 35 divided into the following specialties:

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Specialty Hydraulic Construction Engineers Road Construction Engineers Civil Engineers Electrical Engineers Mechanical Engineer Economist Surveyors Electrician Accountant Construction Technicians Unskilled

Number of Staff 7 6 4 2 1 1 2 1 1 2 5

Mr. Le Trung Thanh, who is assisted by two deputy managers, heads the department. The qualification of the senior staff of the department is summarized below:
Name Year of Birth Education Years in Present Position Previous Work Manager Le Trung Thanh 1959 Bachelor in Business Administration 7 Deputy Manager of General Affairs for Song Hinh Deputy Manager Nguyen Minh Chien 1969 Bachelor in Hydraulic Construction 4 Supervisor Deputy Manager Nhuyen Binh 1977 Bachelor in Hydraulic Construction 0 Expert in the Department

6.1.2.3 Technical Department The Technical Department is responsible for the management of technical activities related to planning, investment preparation, construction and commissioning of Song Ba Ha and An Khe-Ka Nak hydropower projects in Ba River Basin. The department has a total staff of 29 divided into the following specialties:
Specialty Hydraulic Construction Engineers Hydrologists Civil Engineers Road Engineers Geologist Power Economist Mechanical Engineer Surveyors Electrician Accountant Unskilled Number of Staff 10 2 3 2 1 1 1 1 1 1 2

The department is headed by Mr. Vo Van Tri, who is assisted by three deputy managers. The qualification of the senior staff of the department is summarized below:
Manager Name Year of Birth Education Vo Van Tri 1958 Bachelor in Hydrology Deputy Manager To Hoang Nam 1960 Bachelor in Electronics Page 104 Deputy Manager Nguyen Minh Van 1965 Bachelor in Mining Deputy Manager Nhuyen Dinh Vu 1970 Bachelor Electricity

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Years in Present Position Previous Work

3 Manager of Technical Dept. for Song Hinh

3 Deputy Manager of Technical Dept. for Song Hinh

0 Expert Technical Department

0 Expert in the Department

6.1.2.4 Project Department The Project Department is responsible for the management of technical activities related to planning, investment preparation, construction and commissioning of A Vuong, Song Tranh 2, Song Bung 2, Song Bung 4, Dak Mi 1 and Dak Mi 4 hydropower projects. The department has a total staff of 45 divided into the following specialties:
Specialty Hydraulic Construction Engineers Hydrologists Civil Engineers Road Engineers Geologist Electrical Engineer Mechanical Engineer Economist Surveyors Planner Unskilled Number of Staff 15 10 5 1 1 2 1 1 1 1 3

The department is headed by Mr. Nguyen Van Chuong, who is assisted by three deputy managers. The qualification of the senior staff of the department is summarized below:
Manager Name Year of Birth Education Years in Present Position Previous Work Nguyen Van Chuong 1964 Bachelor in Hydraulics 2 Deputy Manager of Technical Dept. Deputy Manager Nguyen Xuan Binh 1973 Bachelor in Hydrology 0 Expert of Project Department Deputy Manager Vuong Thanh Chuong 1970 Bachelor in Mechanics 0 Expert of Project Department Deputy Manager Tran Dinh Phi 1978 Bachelor in Hydraulics 0 Expert of Project Department

6.1.2.5 Materials and Equipment Department The Materials and Equipment Department is responsible for management of materials and equipment, preparation of bidding documents, negotiations, signing of contracts, follow-up of supply and installation schedules, and follow-up of payments for contracts. The department has a total staff of 18 divided into the following specialties:
Specialty Electrical Engineers Translators Economist Administration Number of Staff 7 7 1 1

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Mr. Nguyen Van Son, who is assisted by one deputy manager, heads the department. The qualification of the senior staff of the department is summarized below:
Name Year of Birth Education Years in Present Position Previous Work Manager Nguyen Van Son 1955 Bachelor in Mechanics 1 Deputy Manager of Planning Department Deputy Manager Nguyen Van Lan 1972 Bachelor in Electricity 0 Expert in the department

6.1.3

Project Implementation

6.1.3.1 Executing and Implementing Agencies EVN will be the Executing Agency (EA) responsible for the overall implementation of the Project. The Hydropower Project Management Board No. 3 (ATD3) will be the Implementing Agency (IA). ATD3 will coordinate and monitor all construction activities of Song Bung 4 Hydropower Project. A Project Director, directly reporting to one of the vice-presidents of EVN, will be responsible for overall project management, approval of contracts, and payments. A Project Manager from ATD3 will be responsible for physical implementation activities on a day-to-day basis and for the preparation of progress reports, supported by staff from the Finance and Accounting, Project, Materials and Equipment, and Environmental and Resettlement departments. The organization chart for management of the Project is found in Figure 4. 6.1.3.2 Implementation of Resettlement The Environment and Resettlement Department within ATD3 will facilitate land acquisition as well as social and environmental mitigation measures, and ensure that local concerns are adequately addressed. The following authorities will organize the implementation of the compensation and resettlement programs for the Project: At provincial level the Directorate Committee headed by the Deputy Chairman of the PPC. At district level the Compensation, Support and Resettlement Council headed by the Deputy Chairman of the DPC, which also includes representatives from ATD3. The Implementation Team with representatives from the villages, communes, districts and ATD3, assisted by (i) Finance Officer, (ii) Land Administration Officer, (iii) Ethnic Minority representative, (iv) Irrigation Engineer, (v) Agriculture Engineer, and (vi) representatives from Womens Union, Youth Union and APs. Implementation Support

6.1.3.3 General

To assist in the implementation of the Project, it is intended that international and domestic consultants will be recruited in accordance with ADBs Guidelines on the Use of Consultants to provide the following services: Implementation Supervision Consultant, to work under ATD3s Project Department and being responsible for the daily supervision of civil works and erection of the equipment as the Engineer, as well as monitoring the environmental protection measures during construction.

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Independent Monitoring Services, to monitor the conduct, progress and outcome of the relocation and livelihood restoration of people affected by the Project

Budgets The budget for the Implementation Supervision Consultant is estimated at 4.95 million USD with the following cost breakdown:
Item Fee for International Consultants Fee for Domestic Consultants Reimbursables Contingencies TOTAL No of Staff 9 39 Person-months 121 1,129 Average Rate US$/Month 22,562 1,190 Cost US$ 2,730,000 1,343,500 432,600 443,900 4,950,000

The budget for the Independent Monitoring Services is estimated at 150,000 USD with the following cost breakdown:
Item Fee for Domestic Consultants Reimbursables Contingencies TOTAL No of Staff 2 Person-months 126 Average Rate US$/Month 733 Cost US$ 92,400 42,700 14,900 150,000

6.2

Procurement Plan

As mentioned in Chapter 8, the following parts of Song Bung 4 Hydropower Project are anticipated to be financed by Asian Development Bank (ADB) following discussions with EVN: Preliminary civil works (river diversion, adit tunnels, etc.). Civil works construction of dam structure, including monitoring equipment. Civil works construction of spillway. Civil works construction of water conveyance system (intake, headrace tunnel, surge tank, and penstock), including steel lining of the penstock. Civil works construction of power station (powerhouse, tailrace canal and switchyard). Electromechanical equipment for the power station (turbines, generators, transformers, control equipment, switchyard equipment, etc.). Hydro-mechanical equipment (gates, etc.), excluding steel lining of the penstock. Transmission Line. Relocation of Highway 14D. Implementation Supervision Consultant. Independent Monitoring Services.

The remaining parts of the Project, such as access roads, environmental and social costs, and engineering and administration costs, are anticipated to be financed by EVN.
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The parts of the Project to be financed by ADB are anticipated to be divided into the following contract packages:
Contact Package Package I Lot I.01 Package I Lot I.02 Contract Description Civil works construction for Preliminary Works, Dam, Spillway, and Monitoring Equipment for the Dam Civil works construction for Intake, Headrace Tunnel (including Adits), Surge Tank, Penstock (including steellining of Penstock), and Power Station (including Tailrace Canal and Switchyard) Electromechanical Equipment Hydro-mechanical Equipment Transmission Line Relocation of Highway 14D Implementation Supervision Consultant Estimated Cost Million US$ 50.39 38.27 Procurement Method ICB Works ICB Works

Package II 32.68 ICB Goods Package III 5.64 ICB Goods Package IV 6.81 ICB Package V 9.30 ICB Works Package VI 4.5 QCBS Lot IV.01 Package VI Independent Monitoring Services 0.14 CQS Lot IV.02 Note: Price and physical contingencies, taxes and financing charges are not included, see Chapter 8.

The civil works contracts will be unit rate type of contracts, and the general conditions will be according to Conditions of Contract for Construction for Buildings and Engineering Works Designed by the Employer, Multilateral Development Bank Harmonized Edition 2005 prepared by FIDIC (FIDIC MBD version 2005).

7
7.1

Economic Analysis
General

The Economic Analysis of Song Bung 4 Hydropower Project has been prepared by ADB Staff, and Sections 7.2 to 7.4 has partly been based on data presented in the First Interim Report.

7.2
7.2.1

Macroeconomic and Sector Context


Macroeconomics

By consistently pursuing a wide range of reform policies, especially reform of state-owned enterprises (SOE), by encouraging domestic as well as foreign investment, and by expanding the private sector, and aided by a stable political environment Vietnam continued to achieve remarkable economic growth during the last 5 years. The five-year average GDP growth reached 7.3% per annum for the period 2000-2005, with the growth of the following year higher than the preceding one. In 2005, GDP growth was 8.5%. Industry and services together accounted for nearly 80% of GDP and was the main driver of economic growth. These two sectors recorded 10.3% and 7.5% growth, respectively, while agricultural sector expanded at 3.3%. The average inflation for 2005 was around 8%, slightly higher than in 2004. Broad money supply and credit growth have recorded 28% and 36%, respectively, driven by the broad based economic growth. The fiscal deficit was maintained at 3.8%, being below the governments target of 5%. The fiscal position is expected to remain expansionary, but manageable, to cover the investments in infrastructure and adjustment cost of structural reforms. The average economic growth for the period 2006 2010 is expected to be around 8.5% (5-year average) with industry and services to grow at the rates of 11% and 8.0%,

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respectively. The key development challenges of Vietnam are to sustain the high economic growth and reduce the inequality between urban and rural areas through targeted poverty reduction. To increase the competitiveness and maintain high GDP growth of 8.5%, Vietnam needs to maintain an investment level of more than 35% of GDP for a period of time mainly to develop necessary physical infrastructure, amongst them, infrastructure in the energy and power sector. 7.2.2 Power Sector Issues and Challenges

The ADB Energy Roadmap for Vietnam, which constitutes a part of the Country Strategy and Program for the period 2006-2010, identifies key issues and challenges of the power sector. These issues are briefly summarized in paragraphs that follow. Demand for electricity is projected to grow at a very high rate (e.g. 15%/year till 2010 and 11 %/year till 2015). Meeting this rapidly growing demand in order to ensure uninterrupted supply for economic production, as well as for satisfying the population needs, is the most challenging task facing the power sector in Vietnam. To meet this challenge requires mobilizing adequate capital for investment in generation, transmission and distribution; implementing an appropriate tariff structure so as to stimulate rational consumption pattern; reforming the sector to facilitate competition; creating appropriate regulatory mechanism to manage the sector under a more competitive environment; managing environmental impacts while ensuring financial viability of the utility. Maintain adequate investments to meet the rapid growth in demand for electricity is a formidable task. According to the draft 6th Master Plan1 the total investment requirement of the power sector for the period 2006-2010 is estimated to be 24.2 billion US$ consisting of 17.1 billion US$ for generation and 7.1 billion US$ for transmission and distribution network. Electricity of Vietnam (EVN) is expected to invest about 16 billion US$ and the remaining will be invested by non-EVN sources. A similar level of investment is required for the period 2011-2015. It is estimated that EVN's internal cash generation during the period 2006-2010 will reach 8 billion US$, thus EVNs net borrowings are expected to be 8 billion US$ in order to make up the total investment requirement of 16 billion US$ during the period 2006-2010. In spite of the ambitious plans to divest most of EVNs owned power plants and distribution assets, the bulk of new investments will be financed through borrowings on commercial terms. The availability of concessionary ODA sources and domestic funds through the government financed Development Assistance Fund (DAF) is limited, and EVN is increasingly resorting to borrow on commercial terms from Export Credit Agencies and from ADB on OCR terms. The development of a competitive power market as envisaged in the Electricity Law (effective July 2005) is to develop a power market on the principles of transparency and competition to achieve economic efficiency, to attract investments from both state and non state sectors and to ensure the legitimate rights of the consumers and the investors. The Law states that the state monopoly would be limited to power transmission, national load dispatch and strategically important large power plants. This leaves the power distribution and non-strategic power generation to potential private sector investors. The Law specifically encourages investments from foreign private investors, and joint ventures between foreign investors and domestic enterprises. Subsequent to the enactment of the Electricity Law, the Electricity Regulatory Authority (ERA) for the power sector has been established. As the first step toward a competitive power market, EVN will be converted to a holding company. Most of EVN owned power plants will be equitized. However, the three multipurpose hydropower projects and the transmission network (220 kV and 500 kV) will be
Draft Master Plan VI has been completed in December 2005. It is now awaiting comments from line ministries and to be approved by the Government before June 2006.
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retained within EVN. This equitization of key subsidiaries of EVN (i.e. power plants and provincial power distribution units) started in 2005 and is expected to be completed by 2008. EVNs stakes in the equitized provincial distribution utilities would be held through the eight existing regional Power Companies. EVNs cooperate restructuring program would be completed by 2008, before the establishment of wholesale competitive power market in 2009. For a long period of time the cross sector average electricity tariff stood at 0.052 US$/kWh, significantly below the long-run marginal cost of supply (LRMC was estimated to be 7.5 US cents/ kWh). EVN has planned to raise the tariff to the level that sustains the investment in system capacity, but the government requires that tariff increase should be gradual to avoid general inflation. In 2006, an 8.8% tariff increase had been approved, bringing the cross sector average tariff to 0.057 US$/kWh. In general the power sector in Vietnam is developing strongly. There are issues and challenges which are being addressed by the Government, MOI and EVN. The Song Bung 4 Hydropower Project helps to partly meet the challenges by adding new generating capacity to meet the national demand. In parallel with expanding the supply system, the Government is pushing ahead the national program on energy/electricity conservation. Since early 1990s, several projects had been carried out with assistance from bilateral as well multilateral cooperation. Energy conservation and demand side management are among the key components of the national programs titled "Development of national strategies and policies for sustainable energy future" and "Comprehensive program on energy efficiency and conservation in Vietnam" being implemented by the Ministry of Industry and Ministry of Science and Technology. The first phase of the World Bank sponsored demand side management project was completed in 2002. The project assessed the potential of electricity conservation from the end-use side, focusing on the household consumption. A survey of household electricity consumption was carried out, which identified the major end uses with significant potential for conservation, e.g. lighting (19.2% of the total household electricity consumption); electric rice cooker (18.1%); refrigerators (15.5%), etc. Examples of international cooperation in the area of demand side management include the UNDP/GEF project on efficient public lighting, ECASEAN sponsored project on cogeneration, and WB DSM project second phase. All of these aims to help reduce peak demand and lessen the pressure on the supply side investment. Renewable electricity is also given due attention, even though it will take time for renewable electricity to gain a considerable share in the generation mix. The development of renewable electricity is more advantageous in the remote areas, such as mountainous districts or islands. Mini and micro hydropower is being utilized intensively in the northern and central mountains. A couple of wind farms are in operation on Bach Long Vy Island, providing roundthe-clock electricity for the population on the island. In the future the government plan to increase the share of renewable energies in the country capacity mix.

7.3

Demand Analysis

Vietnam had sustained a high growth of 14.2% in electricity demand during the period 1990 2003 and during the recent times (i.e. 2000 2005) the growth rate has further increased to 15.2%. Electricity consumption in 2005 was 44.96 TWh, being 13.3% higher than 2004. Electricity demand in Vietnam will continue to grow with this high rate to support economic expansion and improvement of the standard of living. Under the preparation of Mater Plan VI, a new projection of electricity demand for the period 2006-2025 has been conducted. The Institute of Energy (IOE), a system planning organization of EVN, has been entrusted with the task of projecting country demand and system expansion planning. IOE prepares country master plan for power sector development every five years.

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IOE has used a combination of projection methods in order to prepare the load/demand forecast. Within the short-term future (e.g. up to 5 year) demand and load projections were estimated based on the so-called direct method. This direct estimation is based on surveys of all registered new demand of committed or planned expansion, or newly created, industrial and economic zones together with major urban centers collected on province-by-province basis. The provincial demands were estimated first, and then the regional and then country demands were carried out by adding up the provincial demands. Such direct survey and demand estimation is considered to be appropriate as it closely follow the economic development plans at the provincial level, which are prepared not only for the purpose of electricity demand projection, but taking into account multi-facets of developments. For the longer-term future, i.e. 10 years and beyond, provincial economic development plans are less definitive, so IOE uses a regression analysis. The regression analysis takes into consideration elasticity factors, tendency of electricity intensities of major consumers and past statistic data. IOE has carefully analyzed the statistical data and also elasticity coefficients. Future electricity demand is projected for three regions (e.g. northern region, central region and southern region) and combined to get a country projection. This combination of methods for demand projections has been used in the past for all master plans. The results of demand projections have been reviewed and commented on by various government agencies, and normally approved by the Prime Minister as part of an overall Master Plan. The table below contains main indicators of the demand projection resulted from Master Plan VI. A full table of demand forecast by regions is given in Table 3.
Main Indicators, of the IOE's Demand Forecast 2005-2025 Year 2005 2010 2015 Annual demand, GWh 44,96 97,11 164,96 5-year growth rate, % 16.3% 11.2% Per capita consumption, kWh 549 1106 1774 T&D losses and own-use, % 14.7 13.8 13.2 Peak load, MW 9512 19553 32196 Source: IOE 2005, Master Plan VI (final draft) Hanoi. 2020 257,26 9.3% 2629 12.5 48642 2025 381,16 8.2% 3703 11.7 71416

According to Mater Plan VI in the table above, the electricity demand will grow at 16.3% per annum from now until 2010 and 11.2 % thereafter until 2015. The demand growth is driven by rapid growth in industrial and commercial sectors, increase in electrification from less than 40% in 1990 to over 88 % in 2005, urbanization and increased living standards with domestic demand growing at 19%. The demand for electricity and the corresponding peak load are expected to reach 97.11 TWh and 19,553 MW in 2010, and 165 TWh and 32,200 MW in 2015, compared to 39.7 TWh and 8,400 MW in 2004. The system losses would be reduced from 14.7% in 2004 to 13.8% in 2010 and 12.3 % in 2015, and the load factor will increase to 68.4% in 2010 and 69.1% in 2015 from 65.7% in 2004. Over time, demand projections are by necessity adjusted to be in harmony with the economic development scenarios. The graph in Figure 7-1 below demonstrates the relative accuracy of the electricity demand projection made by IOE as compared with the actual levels of energy consumption.

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Figure 7-1 Comparison of Demand Projection by IOE with Actual Historical Data
60,000 50,000 40,000 30,000 20,000 10,000 0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

MP VI MP V Actual

Source: IOE 2005, Master Plan VI (final draft) Hanoi.

The graph clearly shows that the IOE projection is in good matching with the actual data. Master Plan IV accurately predicted the demand for 1995-1996. Due to the impacts of the Asian financial crisis, the actual electricity demand in Vietnam is lower then the projection of Master Plan IV as seen by the gap between actual demands and projected demands for the period 1998- 2000. Master Plan V took into consideration the impacts of the financial crisis which predicted slightly lower then actual demand (strong recovery). Subsequent update of Master Plan V closely followed the actual demand (e.g. for the period 2004-2005). Figure 7-1 above thus shows that the IOE projection is in good matching with the actual data. The demand projection in Master Plan VI takes into consideration evolution of demand load factor (LF) by the northern, central and southern regions. Over the years, load factors in all three regions have been improving from 0.61 in 1996 to 0.64 in 2004. The southern region has the highest LF, followed by the central region and then the northern region. In 2004, these LF are 67.8%, 58.5% and 57.2% for the southern, central and northern regions, respectively. The higher LF for the southern region is induced by the higher share of electricity consumption for industrial production. Such share was more than 50% for the southern region, while it was below 40% for the northern region. A typical daily load curve also experiences a positive shift: as the difference between maximum load and minimum load has been reduced. In addition the daily peak (at around 11 am) is getting closer to the evening peak (at 19 20 pm) reflecting the fact that the electricity consumption in industrial and commercial sectors play more and more dominant role. Regarding the structure of the demand, before 2004 households represented the largest consumer followed by industry, commercial and then agricultural sectors. Recently, the industrial sector consumption surpassed that of the household and become the largest consumer. In 2005, the shares of the industry, household, commercial and agricultural sectors were 45.8%, 44.2%, 8.6% and 1.4%, respectively. During the period 1996-2004 the growth rate of electricity consumption of the industry was also remarkable at 16.3% per year. Even though the share of the commercial sector remains small, its growth rate was as high as 16.5% per year during 2000-2005. Compared to the industrial and commercial sectors, household growth rate of electricity consumption was somewhat lower, however, it was more than 15% per year for the period 2000-2005.

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7.4
7.4.1

Least Cost System Expansion Plan of the Vietnam Power Sector


General

Every five year, IOE prepares a Master Plan, which looks into all aspects of the power system development. A Master Plan normally covers demand forecast, least cost expansion plan, transmission expansion plan, fuel supply assessment, rural electrification program, investment requirement and others. Master Plan VI also includes regional interconnection and power trade with neighboring countries, environmental aspect of system development, and organizational reform of the power sector. Master Plan VI plans for the development between 2006 and 2015 with outlook to 2025. Thus the horizon of the least cost expansion planning is to 2025. 7.4.2 Existing Generating System

At present the Vietnam electricity system is a well developed unified system stretching over the country with the backbone being a 1,700 km long high voltage (500 kV) transmission line connecting all load and generation centers between northern and southern parts of the country. The northern region has abundant coal resources, whereas the southern region is endowed with off-shore gas for electricity generation. Hydropower resources are available throughout the country with the most concentrated potential on Da River in the North. The Red River delta and Mekong River delta are the concentrated demand centers, both growing rapidly in recent years. By the end of 2005, the total installed generating capacity of the power system in Vietnam amounted to 11,386 MW. The breakdown of this capacity by fuel type is given in the table below. During the last few years, there was a noticeable shift from dominant role of hydrobased capacity to gas-based capacity. The structure of the generating capacity will continue to evolve, as coal capacity will be added significantly during the next five years. Similarly, with Son La Hydropower Project coming online, the share of hydropower will be significant again for a period of time.
Installed Capacity in MW and their Share, End of 2005 EVN Non-EVN Type of Capacity Total Hydro 4069 150 4219 Coal 1245 210 1455 Oil 200 389 589 Gas 3037 1841 4878 Diesel 245 245 Total 8796 2590 11386 Share 37.1% 12.8% 5.2% 42.8% 2.2% 100%

The existing capacity comprises of generating capacity of EVN power plants, and those outside EVN (called non-EVN). At present, non-EVN capacity already accounts for 22.7 % of the total system capacity (see the table below). Non-EVN power plants in turn consist of IPP, BOT and power plants owned by other enterprises in Viet Nam (e.g. VinaCoal). Details of the existing generating capacity are given in Table 4. 7.4.3 Options for Expansion of the Generating System

The options for future development of the power system, without looking at other system constraints, and investment requirements, are derived from the following considerations: Availability of domestic fuel supply. Availability of domestic renewable energy resources.

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Possibility of importing fuels. Power trade (import/export) with neighboring countries.

Vietnam has considerable domestic energy resources for power generation, including hydropower, coal, natural gas and oil, and some potential of renewable energy sources. The hydropower potential in Vietnam, based on survey of 87 rivers, is estimated at 308 TWh/year with a capacity of 70,000 MW, while the economic potential is estimated at 120 TWh/year and a capacity of 30,000 MW. Taking into account the environment and social criteria, the feasible hydropower potential is estimated to be 20,750 MW and 83TWh. In the future, hydropower projects over the whole country, i.e. northern, central and southern regions, are considered as candidates for system expansion. The full list of hydropower projects considered in the planning exercise is given in Table 5. Thermal generating capacity in the future will rely on coal in the North and gas in the South. The expansion planning also considers importing coal (from Indonesia and Australia) for producing electricity in the later part of 2020s. In addition, nuclear energy will also be a possible candidate for meeting high electricity demand in far future. The availability of coal with various quality in the Quang Ninh geological basin and under the Red River delta makes it possible to develop a sizable coal-fired power capacity in the North, particularly in Quang Ninh, Cam Pha, Hai Phong, Ninh Binh, and Uong Bi. Coal power stations can also be built in the central region, for which candidates under consideration are Nghi Son and Vung Anh power plants. Off-shore crude oil, associated gas and natural gas have been exploited since early 1990s. A large portion of collected gas has been used for electricity generation, notably in the South, given the proximity to the gas production location. In the future, candidates under consideration include power stations in Ca Mau, Omon, and extension of the existing Phu My power plants. New sties will be investigated for more plants. Candidate power plants and their main characteristics are shown in Table 5. The table below summarizes the projection of supply of hydrocarbon fuel in Vietnam and the corresponding total demand of the country. The table shows that after 2025, Vietnam will not be able to meet its energy demand using only domestic resource and it will become a net energy importer.
Supply and Demand of Hydrocarbon Fuel toward 2025 2005 2010 2015 41.42 33.93 19.34 29.97 13.96 14.46 2020 60.75 62.95 19.48 44.56 14.39 14.91 2025 64.54 100.13 18.62 54.6 16.2 16.34

Coal Supply 29.2 32.91 (Million tons) Demand 13.62 22.41 Oil Supply 17.8 20.36 (Million tons) Demand 11.0 18.29 Gas Supply 6.5 8.52 (Billion m3) Demand 4.5 8.31 Source: IOE 2005, Master Plan VI (final draft) Hanoi.

7.4.4

System Planning Methodology

The starting point is Master Plan V, but with extended planning horizon to 2025. The planning exercise is formulated based on the set of candidate plants and taking into consideration constraints that reflect the fuel availability and system reliability criteria (power plant outage, maintenance requirement, transmission line reliability rule, etc.). Two possibility of gas supply were considered, 14 billion cubic meters (b.c.m) and 10 b.c.m per year during 2020-2025. The two most important reliability criteria are the loss of load

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expectation (LOLE) criteria, applied to the whole generation system, and the rule n -1 applied to the transmission capability. The LOLE criterion stipulates that the expected loss of load should not exceed 24 hour per year (LOLE < 24 per year). The n-1 rule takes into account the situation when one circuit of the double circuit 500 kV transmission line is not functioning and the whole system still works stably. System optimization was carried out using the software STRATEGIST. It is a tool for dynamic programming optimization based on the lowest total discounted system costs. STRATEGIST's approach is similar to the previously used WASP model, but allowing for taking into study the transmission system with interchange between sub-systems (up to 15 systems can be considered and three systems were actually considered in Master Plan VI, North, Central and South). STRATEGIST operates by taking as input the load demand via a module LFA (Load Forecast Adjustment). The second module, GAF (Generation And Fuel) simulates the dispatch of all thermal and hydropower units and linkages. The PRV (PROVIEW) then finds the optimal system configuration through a dynamic programming process. Apart from demand data, other important inputs for optimization are (i) technical and finance econimic data of all generation sources, fuel types, fuel price, investment cost, O&M cost, efficiency, load factor, failure frequences, etc., (ii) investment cost, voltage, length, O&M cost, losses, failure frequences, etc. for transmission lines, and (iii) fuel supply availability/limitation, and fuel costs. Fuel costs are forecasted taking into account international projections. O&M costs are based on national/international practices. The costs are economic costs without provision of taxes and environmental costs are not included. 7.4.5 Least-cost Expansion Generation Plan up to 2025

The optimization of the system expansion results in a optimal schedule of new capacities to be added to the system for the whole period 2005-2025. Graphically, the peak load and the system aggregated capacity are shown in Figure 7-2 below. The numerical values and reserve margins are tabulated in the table below. It may be noted that the reserve margin is small for 2006 and 2007, before new capacity coming online. The reserve margin will reach 26.6% in 2011 and then slightly decline, but will still remain at a level of 20%. This is due to the reliability constraint of the 500 kV transmission line. After 2020, new capacity will have quite large unit size (e.g. 600 MW) leading to correspondingly robust margin requirement.
Figure 7-2 Evolution of Peak Demand and Available System Capacity over the period 2006-2025
90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Capacity

Demand

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A full list of new capacity and the schedule of their coming online is documented in Table 5. The optimal expansion plan confirms that the Song Bung 4 Hydropower Project is part of the optimal schedule and will be commissioned in 2012. The optimal system expansion is a combination of all types of generating capacities reflecting the resource base of the country. Hydropower will continue to be developed. Thermal power, such as gas and coal based, will also have their share in the generation mix. It is noticeable that contribution to the system from renewable sources will become more and more significant. The mix of small and mini hydropower and wind power represent renewable energy sources with increasing value of capacity. By 2011, renewable capacity will reach only 100 MW, but will increase to 500 MW in 2015 and to about 1,000 MW in 2025.
Generating Capacity vs. Peak Demand of the System, 2006-2025 Year 2006 2007 2008 2009 2010 2011 2012 Demand MW 11160 12966 15115 17349 19689 21987 24352 Capacity MW 12107 14397 18312 22524 26157 29975 33206 Reserve 7.8% 9.9% 17.5% 23.0% 24.7% 26.6% 26.7% Year 2016 2017 2018 2019 2020 2021 2022 Demand MW 34980 37994 41208 44693 48541 52571 56882 Capacity MW 44993 50195 53695 57145 62765 65265 71846 Reserve 22.3% 24.3% 23.3% 21.8% 22.7% 19.4% 20.8% 2013 26622 35930 25.9% 2023 61485 76646 19.8% 2014 29251 38035 23.1% 2024 66256 82296 19.5% 2015 32077 40337 20.5% 2025 71208 88096 19.2%

The demand forecast in Section 7.3 shows that the central region has lower demand compared to the demands in the North and South, however, in the next 25 years demand in the central region will grow with the highest rate. Song Bung 4 Hydropower Project, being located in Quang Nam Province, is an important generation source to meet this fastest growing demand in the central region.

7.5
7.5.1

Economic Valuation of Costs and Benefits of Song Bung 4 Hydro Power Project
General

According to the ADB Guideline on Economic Analysis of Projects, the economic viability of Song Bung 4 Hydropower Project (SB4 HPP) was examined by comparing the two scenarios of with" SB4 HPP and "without" SB4 HPP. The comparison takes into account the costs as well as the benefits to the society in these two scenarios. The basis of comparison is that both scenarios face the same projected electricity demand as detailed in Section 7.3 above. 7.5.2 Costs

The costs to the society are the investment and the operating costs of Song Bung 4 Hydropower Project, and the costs of social and environmental mitigations. Investment costs in turn can be categorized into equipment costs (including cost of the 220 kV transmission line connecting Song Bung 4 Hydropower Project with the national network), construction costs, engineering, administrative and management costs related to the construction of the power plant. The costs also include physical contingencies, but exclude the interest during construction and price contingency. In this analysis domestic price numeraire is used. For ease of presentation, US dollar is chosen as unit of currency, and all values in Vietnamese Dong (VND) are converted to USD using the exchange rate of 1 USD = 15,800 VND. Equipment costs are estimated based on
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international experience and is quoted in USD (world price). To reflect the social value of the Project, based on the domestic price numeraire, a shadow exchange rate factor is used (SERF = 1.1 for Viet Nam2). Construction costs and administrative costs are estimated based on domestic unit rates (available to PECC3 as well as SWECO) and are quoted as domestic price level numeraire. Summary of the cost components are tabulated in the table below:
Investment Costs of Song Bung 4 Hydropower Project in Economic Terms Shadow Value Items MUSD SERF MUSD Cost of construction 108.54 1 108.54 Cost of equipment 40.04 1.1 44.04 Admin & other costs 17.62 1 17.62 Cost of transmission line 6.81 1.1 7.49 Physical contingency 13.33 1.1 14.66 Env./Social mitigation costs 20.45 1 20.45 Total Investment w/o IDC 206.79 212.80 Source: ADB estimate based on PECC3, SWECO International

7.5.3

Benefits

7.5.3.1 General According to the least cost expansion plan of Master Plan VI (MP VI) Song Bung 4 Hydropower Project will be brought online in 2012, generating about 537 GWh of electricity. It will be connected to the national transmission network via a 220 kV transmission line in the central region. At present the electricity system in Vietnam is a unified system stretching over the country with the backbone being a 1,700 km long high voltage (500 kV) transmission line connecting all load and generation centers between the northern and southern parts of the country. The central region has lower demand compared to the demands in the North and South, however, in the next 25 years, demand in the central region will grow with the highest rate. Song Bung 4 Hydropower Project, being located in Quang Nam Province, is an important generation source to meet this fastest growing demand in the central region. More importantly, Song Bung 4 Hydropower Project helps to increase the reliability of the 500 kV transmission line, the back-borne of the transmission network. As described above, the 500 kV connection stretches over 1,700 km. Technically, for reliable operation of this long high voltage transmission link, it is necessary with a boot up voltage centre in the middle of the line. So far the Yaly Hydropower Power Plant plays that role. As the power transfer between North and South grows, Song Bung 4 Hydropower Project will contribute to the voltage stabilization of the double circuit 500 kV transmission line. Thus "without" SB4 HPP the entire system will be more vulnerable to the voltage variation. This is a non-quantifiable benefit of having Song Bung 4 Hydropower Project. The study by the Institute of Energy shows that, during the next 25 years, the economics of the system operation dictates that electricity is being transported from the North (where cheap domestic coal is available) to the South (where gas supply is limited). Thus having Song Bung 4 Hydropower Project in the system reduces the amount of transferred electricity thereby increasing the reliability of the system as a whole. Other non-quantifiable benefits include flood control on Vu Gia River and irrigation benefits resulting from the regulating capacity of the Song Bung 4 dam. In order to compare the system behavior in the "with" and "without" scenarios, the powerSee RRP No. 38196:"Proposed Loan Socialist Republic of Viet Nam: Northern Power Transmission Expansion Sector Project" Asian Development Bank, November 2005, Manila.
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planning tool of Institute of Energy (STRATEGIST) was used to simulate the production and power exchange between regions. First the optimal expansion plan of Master Plan VI was simulated, which corresponds to the "with" SB4 HPP scenario. As a result, plant generation and power transfer among regions, and loss of load expectation (LOLE), are calculated. The "without" SB4 HPP scenario is simulated by taking out the SB4 HPP from the system while keeping unchanged other generation sources. Since production of hydropower stations are dependent on water availability and regulation of water due to other duty of such hydropower plants, their production levels in case of "without" SB4 HPP were kept the same as in the "with" SB4 HPP case. Without SB4 HPP, the system load will be met by increased production from thermal power plants to the extent possible. If it is not met by increased production of thermal power plan it is considered curtailment of the consumer demand. The result of the simulation of the "with" SB4 HPP scenario shows that the system dispatches 537 GWh from the Song Bung 4 Hydropower Project every year. In the "without" SB4 HPP scenario, LOLE increased quite substantially, see the table below. More importantly, the LOLE increased not for the central region, where it would have been expected, but in the northern and southern regions, where the demands are higher and reserve capacities are smaller. The shortage of electricity in the North and South will cause more damages with concentrated industrial and commercial businesses.
Changes of LOLE (hour/year) in the three Regions North Year Central wSB4 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0.43 0.34 1.40 21.97 21.61 21.53 22.92 20.38 21.68 22.04 20.84 22.21 20.96 woSB4 0.76 0.87 1.94 25.42 25.91 25.02 26.38 24.21 25.51 25.51 23.37 25.60 25.29 wSB4 0.31 0.12 0.35 7.87 0.00 0.09 1.64 4.76 23.84 14.09 13.38 25.91 11.41 woSB4 0.71 0.39 0.53 15.56 0.00 1.69 8.84 7.70 30.52 18.52 14.29 27.46 15.80 South wSB4 19.06 16.18 20.03 23.24 22.29 23.02 21.26 20.11 22.81 24.35 22.45 22.89 24.41 woSB4 23.50 20.47 24.84 26.48 25.51 27.39 24.85 25.54 27.58 28.93 27.77 27.48 26.86 ENS GWh 56.63 62.29 75.53 123.62 117.55 142.73 164.85 203.96 226.94 219.38 211.31 233.83 233.16

2025 20.61 24.29 14.72 21.12 23.87 27.69 294.93 Note: wSB4 LOLE in the "with" Song Bung 4 Hydropower Project calculation woSB4 LOLE in the "without" Song Bung 4 Hydropower Project calculation Source: Model simulation results, IOE, March 2006

It is noted that the LOLE in the Southern region exceeds the national standard starting from 2014 and the LOLE of the Northern region exceeds the limit of 24 hour/year starting from 2015. For the central region, the rate of LOLE increase is high but the absolute value of LOLE change is small, and LOLE for the "without" SB4 HPP scenario does not exceed reliability standard for most of the years during the expansion planning period. The increase of the LOLE between the "with" and "without" SB4 HPP scenarios is a measure of the expected energy not served (ENS in the last column of the table above) had the same values of LOLE been kept in both scenarios. The other part of shortage due to without SB4 HPP is partly covered by the increased production of thermal power plants both in the

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Northern and Southern regions. In this analysis, the economic value of electricity generated by Song Bung 4 Hydropower Project is measured by the costs to the society of not having it. This cost comprises the costs of sub-optimal operation of thermal power plants to partly replace Song Bung 4 Hydropower Project and the costs to the consumers (industrial, residential, commercial) due to unserved electricity (ENS). In other words, the benefits of having Song Bung 4 Hydropower Project is the sum of two components: the non-incremental benefits accrued by not having to run thermal power plants at their sub-optimum; and the incremental benefits accrued to the consumers by having sufficient supply of electricity to their satisfaction. 7.5.3.2 Non-incremental Benefits The extra amounts of thermal production in the Northern and Southern regions vary year by year as shown in the table below. The IOE model considers the three regions of the country, therefore allowing knowledge about thermal production of power plants that produce to offset Song Bung 4 Hydropower Project.
Increased Production of Thermal Power Plants to Offset Song Bung 4 Hydropower Project, GWh Year By Coal By Gas/Oil Total

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

270.75 182.01 163.25 59.77 88.51 86.36 81.30 86.46 86.14 245.50 116.89 214.37 87.47 78.69

197.69 279.70 284.28 339.79 318.80 294.91 278.64 233.58 210.92 59.12 195.21 75.79 203.37 149.95

468.44 461.71 447.53 399.56 407.31 381.27 359.94 320.04 297.06 304.62 312.11 290.17 290.84 228.64

Source: Model simulation results, IOE, March 2006

The extra production by power plants in the Central and Northern regions is coal-based and in the South gas and/or furnace oil based. The capacity factor of Song Bung 4 Hydropower Project (156 MW, 537 GWh) is about 39 %. With this capacity factor, Song Bung 4 Hydropower Project will likely be operating at the shoulder regime. It is considered that the thermal power plants that will cover the load of Song Bung 4 Hydropower Project will also be operating at the shoulder load regime. For the northern region these will be domestic coal power plants and for the southern region these will be gas-fired power plants. The corresponding average costs are 0.0474 USD/kWh for coal and 0.0528 USD/kWh for gas, see Table 8. These production costs are used to value the benefits of Song Bung 4 Hydropower Project by non-incremental benefits in terms of avoided costs of running thermal power plants outside their optimal regime. 7.5.3.3 Incremental Benefits As thermal power plants cannot cover all the shortage of electricity due to thewithout" SB4 HPP scenario, final consumers suffer expected power shortage. This represents the incremental value of benefits of having Song Bung 4 Hydropower Project. The shortage of

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electricity supply due to "without" SB4 HPP causes different costs to different consumer categories. The household consumer will likely have to curtain their consumption, whereas industrial/commercial consumers will use alternative generating sources to replace shortage of electricity. The household consumer electricity demand function is assumed to be of the natural logarithm function (Choynowsky, 2002)3: ln(Q) = a + b*P where: Q is the electricity consumption level of an individual household, P is the corresponding price of electricity a and b are the coefficients specific to a given situation. With such a demand function, the loss of consumer welfare due to a reduction of consumption from level Q1 to level Q2 (Q2 < Q1) is measured by:
Q1

HH_loss =

Q2

Pdq

Or after integrating over the Q2 Q1 range: HH_loss = Q1 * (P1-1/b) Q2 *(P2-1/b) where: P1 is the price level at Q1 and P2 is the willingness to pay for an extra kWh while consuming at Q2 (to reach a higher consumption level). For small changes in consumption level (e.g., Q1 ~ Q2) it can be assumed that P1 ~ P2 and the above equation is simplified to: HH_loss = (Q1 Q2) * (P1-1/b) In the "without" SB4 HPP case, part of demand will be covered by extended thermal generation as shown in Section 7.5.3.2. The remaining represents shortage to the consumer. For the period 2011 2025 this shortage is shown in the table below for three consumer groups namely Household, Commercial and Industry (inclusive of agriculture). As can be seen, demand curtail for household sector is relatively small (because of the small size of Song Bung 4 Hydropower Project and also owing to ability of some thermal power plants to partly cover the shortage). The equation for benefits calculation presented above is applicable for an individual household. In this analysis such equation is being applied for an average household in Vietnam.
Shortage of Electricity Supply (GWh) due to without SB4 HPP by Consumer Categories ENS-HH ENS per HH ENS-IND ENS-COM Total ENS GWh/a kWh/a GWh/a GWh/a GWh/a 22.21 0.977 22.21 11.11 55.53 24.92 1.084 24.92 12.46 62.29 30.60 1.316 30.60 15.30 76.50 49.79 2.118 49.79 24.89 124.47 46.66 1.963 46.66 23.33 116.66 57.09 2.376 57.09 28.55 142.73 65.61 2.701 65.61 32.81 164.03 81.59 3.322 81.59 40.79 203.96 90.78 3.656 90.78 45.39 226.94 87.75 3.495 87.75 43.88 219.38 P. Choynowski 2002, Measuring Willingness to Pay for Electricity, ERD Technical Note No.3, Asian Development Bank, Manila.
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84.77 3.340 84.77 93.53 3.645 93.53 93.27 3.595 93.27 118.16 4.505 118.16 Source: Model simulation results, IOE, March 2006

42.38 46.77 46.63 59.08

211.92 233.83 233.16 295.39

Numerical Coefficients of the Typical Household Demand Function P0 Q0 P1 Year Q1 Coeff a Coeff b 2008 5127 119 768 1378 7.659918 -0.00056 2009 5127 119 779 1485 7.755385 -0.00058 2010 5127 119 790 1593 7.845926 -0.0006 2011 5127 119 802 1655 7.899698 -0.00061 2012 5127 119 812 1707 7.943688 -0.00062 2013 5127 119 823 1747 7.979367 -0.00062 2014 5127 119 835 1773 8.005962 -0.00063 2015 5127 119 846 1792 8.027019 -0.00063 Source: RRP 38196 and ADB staff calculation

In 2004, the population of Vietnam stood at 83.2 million, with the average household size of 4.5 people there were 18.5 million households. Using a population growth rate of 1.12%/year (decreasing over time to 1.09%/year) and average household size decreasing from 4.5 to 3.8, it is possible to estimate the number of households in Vietnam for the whole study period. Dividing the electricity shortage by the number of households yields the level of electricity curtail per household, which can be used for calculation of welfare loss. It can be seen from the table above that the amount of shortage that an average household suffers is relatively small compared to the average consumption level of 120 kWh. Thus the equation with small changes can be used to simplify the calculation process. Using data from previous sources4 the values of coefficients a and b of the demand function are estimated for a typical household in Vietnam (see the table above). As a result, the following equation represents quite well the electricity demand function for a typical household: ln(Q) = 8 0.0006 P Figure 7-3 below shows the demand function expressed by this equation:

see RRP No. 38196 "Proposed Loan Socialist republic of Viet Nam: Northern Power Transmission Expansion Sector Project", ADB November 2005
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Figure 7-3 Typical Household Electricity Demand Curve


6,000 5,000

P, VND/kWh

4,000 3,000 2,000 1,000 0 0 500 1,000 1,500 2,000 2,500

Q, kWh
Source: Based on Choynowski, 2002 and ADB staff calculation

Applying the actual demand function and taking the integral of the household loss (the equations above), given that the current tariff of electricity is 853 VND/kWh5, the economic value to the household consumer would be 2,520 VND per kWh at the consumer end. Since Song Bung 4 Hydropower Project is a generation project, in order to attribute the consumer welfare benefit to Song Bung 4 Hydropower Project, a portion of benefit pertaining to T&D should be excluded. The ratio between generation to T&D costs in the power system of Vietnam is about 80:20, resulting in the economic value of not having a kWh of 2,020 VND/kWh or 0.128 US$/kWh at the generation level, i.e. the benefits of Song Bung 4 Hydropower Project. The cost to the industrial and commercial consumers is the cost of alternative generations. According to the experts of Institute of Energy, a most popular replacement for grid electricity is the stand-alone diesel generator, capacity from 150 kW to 5 MW. The levelized costs of diesel generation is 0.01445 US$/kWh. The table below summarizes the results of the benefit calculation. The table contains the economic value of electricity from Song Bung 4 Hydropower Project looking from the consumer perspective. The total economic values of Song Bung 4 Hydropower Project is a sum of the avoided costs of operating thermal power plants at sub-optimum, avoided costs to the industrial consumers who have to use more expensive source of electricity (diesel generators), and welfare loss of household consumers who have to reduce their consumption involuntarily. The project life is 40 years, starting from mid 2012. However the planning period ends in 2025, thus the level of benefits after 2025 needs to be estimated. In this analysis it is assumed that the level of thermal electricity replacement, as well as not served electricity, remain approximately as in 2025 thereafter. The flow of the net benefits, comparing the "with" and the "without" SB4 HPP, can thus be obtained, which allow calculating the lifetime net present value of net benefits, which amounts to 51.06 million US$ and the economic internal rate of return to 14.95 %.

This is the approved average price of electricity averaged across the consumer categories to be effective since March 1, 2006.
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Economic Benefits of SB4 HPP Valued by Consumer Categories, MUSD Benefits to Benefits to Benefits to Total Avoided Household Industrial Commercial Benefits Costs of Thermal Consumers Consumers Consumers Power 2012 23.92 2.90 3.28 1.64 31.73 2013 24.05 3.19 3.60 1.80 32.65 2014 23.41 3.87 4.37 2.18 33.83 2015 21.45 6.33 7.15 3.58 38.50 2016 21.70 6.02 6.80 3.40 37.92 2017 20.34 7.31 8.26 4.13 40.03 2018 19.24 8.44 9.54 4.77 41.98 2019 17.10 10.44 11.80 5.90 45.24 2020 15.89 11.62 13.13 6.56 47.19 2021 15.39 11.23 12.69 6.34 45.65 2022 16.51 10.82 12.22 6.11 45.66 2023 14.80 11.97 13.52 6.76 47.06 2024 15.55 11.94 13.49 6.74 47.72 2025 12.31 15.10 17.06 8.53 53.00 Source: ADB Staff calculation

7.6

Sensitivity Analysis

The sensitivity of the resulted NPV and EIRR with respect to main input parameters has been analyzed by using the @RISK program. The main input parameters subject to the sensitivity analysis include the generation level of Song Bung 4 Hydropower Project, the capital investment costs, and the values that household, industrial and commercial consumers attach to the un-served electricity. Variation of these parameters and corresponding variation of NPV and EIRR are shown in the table below.
Sensitivity of NPV and EIRR Relative to Key Input Parameters NPV ($51.06 m) Low High Parameter Low Base High (Million (Million US$) US$) Capital, MUS$ -7% 217.97 20% $54.34 $4.11 Generation, GWh -10% 524 3% $28.75 $52.77 HH_WTP, US$/kWh -20% 0.128 9% $38.50 $51.98 Non HH_WTP, US$/kWh -3% 0.145 24% $40.50 $60.13 Source: ADB staff calculation using @RISK EIRR (14.95 %) Low 15.26% 13.64% 14.20% 14.30% High 12.20% 14.99% 14.96% 15.28%

The cumulated probability distribution of EIRR and NPV with 1,000 Monte Carlo simulation using @RISK is shown in Figures 7-4 and 7-5 below. The result of simulation shows that the Project is economically robust. With a wide range of input variation, according to the table above, there is a 99 % probability that EIRR equal or exceeds 12 %. Similarly there is only a 1% probability (out of 1,000 simulations) that NPV goes below zero (EIRR <12%). This conclusion is further confirmed by data in the table below.

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Figure 7-4 Cumulated Probability Distribution of EIRR (1,000 Simulations)


sensitivity_all Cumulative Distribution of EIRR
100%

80%

60%

probability
40% 20% 0% 10.00%

11.00%

12.00%

13.00%

14.00%

15.00%

16.00%

17.00%

Source: ADB staff calculation using @RISK

Figure 7-5 Cumulated Probability Distribution of NPV (1,000 Simulations)


sensitivity_all Cumulative Distribution of NPV
100%

80%

60%

probability
40% 20% 0% ($10.00)

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

Source: ADB staff calculation using @RISK

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Expected Values and Standard Deviation of EIRR and NPV EIRR Expected value 13.74% Standard deviation 0.94% Minimum 11.77% Maximum 15.87% Coefficient of variation 0.068 Probability of negative outcome 0.0% Note: Expected value is different from the base value Source: ADB staff calculation using @RISK

NPV 32.09 MUSD 15.85 MUSD -4.84 MUSD 67.44 MUSD 0.494 0.6%

7.7

Conclusion

The analysis presented so far demonstrates that there is a fast growing demand for electricity between 2005 and 2025, especially the demand in central region, where Song Bung 4 Hydropower Project is to be constructed, grows fastest. The analysis also shows that Song Bung 4 Hydropower Project is part of a vigorously planned schedule of capacity addition, and is scheduled to be added to the grid in 2012. The economic robustness of Song Bung 4 Hydropower Project has been confirmed by economic valuation of cots and benefits of the Project with extensive sensitivity analysis. The Song Bung 4 Hydropower Project yields an EIRR of 14.95 % and a corresponding NPV of 51.06 million US$ over the project lifetime of 40 years.

8
8.1

Financial Analysis
Introduction

This Chapter gives an account of the financial analysis of the PPTA on Song Bung 4 Hydropower Project, Phase II. It is divided into the following sections: Section 8.2: Cost analysis of proposed investment. Section 8.3: Financial analysis of proposed investment. Section 8.4: Past financial performance of EVN. Section 8.5: Future financial performance of EVN. Section 8.6: Financial management capability of EVN/ATD3 to administer proposed loan.

8.2

Cost Analysis of Proposed Investment

As part of their expansion program to meet expected future demand, EVN are planning to build a number of new power stations in the next few years. One of these is Song Bung 4 Hydropower Project in Central Vietnam. Part of the construction of this plant is expected to be funded by ADB, with EVN providing the remainder of the funding from its own resources and by a loan from Vietnam Development Bank for the resettlement costs. 8.2.1 Cost Estimates

The cost estimates for the civil works, equipment supply, transmission, and consultancy services are given in Section 5.6. The cost of environmental and social mitigation measures is included in these costs, as well as for engineering and administration.
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All the required work to complete Song Bung 4 Hydropower Project has been grouped into packages, and each package will be funded by either ADB or EVN. The cost analysis has been carried out in 2005 USD terms. Local currency costs are shown in current VND using an exchange rate of 15,800 VND/USD. EVN will have the pay VAT on certain materials, equipment and services, and this is shown separately, though ATD3 has indicated that EVN will eventually be able to recover all the VAT associated with expenditure on Song Bung 4 Hydropower Project. Import duty and other taxes payable on imported equipment, which EVN cannot be reimbursed, are identified separately. It is assumed that EVN will pay all taxes, including taxes on procurement packages funded by ADB. The phasing of the actual expenditure has been estimated, and physical contingencies have been estimated as follows: Equipment 5% Transmission 7% Civil works construction 10%. Engineering & Administration - 10%. Implementation support, and environmental & social mitigation 10%.

The cost contingencies for local and foreign cost expenditure (including physical contingency) in each year have been estimated using the ADB methodology as follows: International inflation: assumed to be 1.2 to 2.8 % per annum according to the table below. Local inflation: 4% per annum, as per ADB guidelines. Rate of exchange: No real appreciation or depreciation in the VND/USD exchange rate.
2007 International (USD) inflation Vietnamese (VND) inflation Rate of exchange (VND/USD)
Source: EVN, Consultants estimates

2.8% 4% 15994

2008 1.2% 4% 16437

2009 1.2% 4% 16891

2010 1.2% 4% 17359

2011 1.2% 4% 17839

2012 1.2% 4% 18333

It is assumed that ADB and EVN will finance the following components of the Project: Component
Civil Works-Dam and Spillway Civil Works-Waterway and Power Station Electromechanical Equipment Hydro-mechanical Equipment Environmental Mitigation Cost Resettlement and Social Mitigation Cost Relocation od Highway 14D Implementation Supervision Consultant Independent Monitoring

ADB
Yes Yes Yes Yes No No Yes Yes Yes

EVN
No No No No Yes Yes No No No

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Preparatory Works Transmission Line Engineering and Administration IDC on ADB loan ADB Commitment fee Taxes and VAT

No Yes No Yes Yes Yes

Yes No Yes No No Yes

The foreign and local currency component of each item has been estimated. IDC has been calculated on the following assumptions: All moneys required to meet planned expenditure in a particular year are assumed to be disbursed in the middle of the appropriate year (i.e. only a half years interest is charged in the first year of disbursement). No loan repayments are assumed to take place before 2012. IDC is calculated on the closing balance of each loan at the end of the year. All interest payable over the period 2008-2011 is assumed to be IDC. Physical and cost contingencies are included in IDC calculations.

ADB charge an annual commitment fee of 0.75% on the difference between actual cumulative disbursements and the following assumed disbursement schedule:
2008
Proportion of undisbursed loan liable for commitment fee charge 15%

2009
45%

2010
85%

2011+
100%

Source: ADB Operations Manual bank Policies 29 Oct 2003

The table below gives a summary of the cost of the proposed investments by procurement package.
Summary of Cost of Investments Total (M USD) A. Base cost 1 1 Civil Works-Dam and Spillway 2 Civil Works-Waterway and Power Station 3 Electromechanical Equipment 4 Hydro-mechanical Equipment 5 Environmental Mitigation Cost 6 Conservation Off-set 7 Resettlement and Social Mitigation Cost 8 Implementation Supervision Consultant 9 Advisory Project Management Consultant 10 Implementation Resettlement Consultant 11 Panel of Experts 12 Third Pary Monitoring 13 Preparatory Works 14 Transmission Line 15 Engineering and Administration 16 VAT and other taxes 50,39 36,55 32,68 7,36 0,56 9,30 18,03 4,54 0,00 0,00 0,00 0,10 12,29 6,81 11,38 15,25

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Sub-total A B. Contingencies C. Financing charges during implementation 2 Total


1 2

205,24 30,10 18,44 253,78

Based on 2005 prices and an exchange rate of 1USD=15800 VND

Includes interest and commitment charges.IDC has been computed at an interest rate of 6.36% for the ADB Loan and at 7.80% for the VND Loan Source: consultants estimates

The table below gives a summary of the cost of the proposed investments by component, and foreign and local cost in USD and VND terms.
Summary of Cost of Investments (by sub project)
Foreign A. Investment costs 1 Civil Works-Dam and Spillway 2 Civil Works-Waterway and Power Station 3 Electromechanical Equipment 4 Hydro-mechanical Equipment 5 Environmental Mitigation Cost 6 Realignment of Highway 14 D 7 Resettlement and Social Mitigation Cost 8 Implementation Supervision Consultant 9 Advisory Project Management Consultant 10 Implementation Resettlement Consultant 11 Panel of Experts 12 Third Pary Monitoring 13 Preparatory Works 14 Transmission Line 15 Engineering and Administration 16 VAT and other taxes Sub-total (A) B. Recurrent costs [None] Sub-total (B) Total Base case C. Contingencies b 1 Physical c 2 Price Sub-total (C) D. Financing charges during implementation 1 Interest during construction 2 Commitment charges 3 Foreign exchange losses 4 Front end fees Sub-total (C) Total Project costs
a

Local

bn VND Total

of base cost

Foreign

Local

M USD Total

% of base cost

240,4 174,3 441,7 99,5 0,0 0,0 0,0 50,5 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 1006,4

560,8 406,8 77,9 17,6 8,9 147,8 286,6 21,7 0,0 0,0 0,0 1,6 195,4 108,3 180,9 242,4 2256,9

801,2 581,1 519,6 117,0 8,9 147,8 286,6 72,2 0,0 0,0 0,0 1,6 195,4 108,3 180,9 242,4 3263,3

24,6% 17,8% 15,9% 3,6% 0,3% 4,5% 8,8% 2,2% 0,0% 0,0% 0,0% 0,0% 6,0% 3,3% 5,5% 7,4% 100,0%

15,12 10,97 27,78 6,26 0,00 0,00 0,00 3,18 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 63,30

35,27 25,59 4,90 1,10 0,56 9,30 18,03 1,36 0,00 0,00 0,00 0,10 12,29 6,81 11,38 15,25 141,94

50,39 36,55 32,68 7,36 0,56 9,30 18,03 4,54 0,00 0,00 0,00 0,10 12,29 6,81 11,38 15,25 205,24

24,6% 17,8% 15,9% 3,6% 0,3% 4,5% 8,8% 2,2% 0,0% 0,0% 0,0% 0,0% 6,0% 3,3% 5,5% 7,4% 100,0%

0,0 0,0 1006,4

0,0 0,0 2256,9

0,0 0,0 3263,3

0,0% 0,0% 100,0%

0,00 0,00 63,30

0,00 0,00 141,94

0,00 0,00 205,24

0,0% 0,0% 100,0%

73,6 184,9 258,4

216,8 337,8 554,5

290,3 522,6 813,0

8,9% 16,0% 24,9%

4,63 3,90 8,53

13,63 7,94 21,58

18,26 11,84 30,10

8,9% 5,8% 14,7%

245,0 19,7 0,0 0,0 264,7 1529,5

58,7 0,0 368,6 0,0 427,3 3238,7

303,7 19,7 368,6 0,0 692,0 4768,2

13,91 1,15 0,00 0,00 15,06 86,88

3,38 0,00 0,00 0,00 3,38 166,90

17,29 1,15 0,00 0,00 18,44 253,78

a b c

Based on 2006 prices and an exchange rate of 1USD=15800 VND Computed as 10% for all items except Electro-mechanical equipment 5%, hydro-mechanical equipment 5.0% and transmission line 7%. Assuming annual cost inflation of 1.2-2.8% (foreign currency) and 4% (local currency in USD terms)

8.2.2

Financing Plan

It is assumed that ADB will fund all the components involving foreign currency costs. Foreign currency costs cover the cost of equipment that need to be imported into Vietnam (provided it is sourced from a ADB member country) plus any equipment and/or works that is procured

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under ADB ICB rules and may actually be carried out by an eligible Vietnamese company. The foreign currency cost estimates include such works. EVN is assumed to fund all the local currency costs from its own internal resources. It is assumed that there is no money from GoV, and no increase in EVNs share capital to cover the cost of Song Bung 4 Hydropower Project. The table below shows the finance plan for the planned investments discussed in Section 8.2.1.
Finance Plan
Total (M USD) Asian Development Bank VND Loans EVN Total
Source: Consultants estimates, ADB

% 77,4% 7,8% 14,8% 100,0%

196,44 19,90 37,44 253,78

In total ADB would provide 196.4 million USD, EVN would provide 57.3 million USD, of which 37.4 million USD will come from their own internal sources and 19.9 million USD from the VND loan. ADB would fund about 77% of the total cost and the remaining 23% would be funded by EVN. The table below gives the financing plan for each component by funder.

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Finance Plan for each Component


Total
M USD

ADB
M USD

EVN
M USD

A. Investment costs 1 Civil Works-Dam and Spillway 2 Civil Works-Waterway and Power Station 3 Electromechanical Equipment 4 Hydro-mechanical Equipment 5 Environmental Mitigation Cost 6 Realingment of Highway 14D 7 Resettlement and Social Mitigation Cost 8 Implementation Supervision Consultant 9 Advisory Project Management Consultant 10 Implementation Resettlement Consultant 11 Panel of Experts 12 Third Pary Monitoring 13 Preparatory Works 14 Transmission Line 15 Engineering and Administration 16 VAT and other taxes Sub-total (A) B. Recurrent costs [None] Sub-total (B) Total Base case C. Contingencies D. Financing charges during implementation Total Project costs % of project cost

50,39 36,55 32,68 7,36 0,56 9,30 18,03 4,54 0,00 0,00 0,00 0,10 12,29 6,81 11,38 15,25 205,24

50,39 36,55 32,68 7,36 0,00 9,30 0,00 4,54 0,00 0,00 0,00 0,10 0,00 6,81 0,00 11,45 159,18

0,00 0,00 0,00 0,00 0,56 0,00 18,03 0,00 0,00 0,00 0,00 0,00 12,29 0,00 11,38 3,80 46,06

0,00 0,00 205,24 30,10 18,44 253,78

0,00 0,00 159,18 22,20 15,06 196,44 77,4%

0,00 0,00 46,06 7,90 3,38 57,34 22,6%

The table below shows the disbursement schedule of the funds by each funder over the period 2007-2014.
Disbursement of Loans
Funding ADB Loan VND Loan EVN Total
M USD M USD M USD M USD

2007 0,00 0,00

2008 0,50 7,26 12,72 20,49

2009 33,12 4,57 8,57 46,27

2010 52,04 2,76 5,75 60,56

2011 105,58 4,71 9,38 119,66

2012 5,19 0,42 0,72 6,33

2013 0,09 0,15 0,24

2014 0,09 0,15 0,24

Total 196,44 19,90 37,44 253,78

8.3

Financial Analysis of Proposed Investment

In this Section a financial analysis of the construction of Song Bung 4 Hydropower Project is undertaken on the assumption that it is a stand-alone project selling bulk electricity to the power market at a fixed price.

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8.3.1

Capital Cost

The capital cost of Song Bung 4 Hydropower Project is as given in Section 8.2. The analysis is performed over a 40-year period, the expected lifetime of the mechanical equipment. However, the civil works are expected to have a lifetime of 50 years and so after 40 years there is some residual value in the plant that could be of interest to an investor wishing to refurbish Song Bung 4 Hydropower Project. The residual value is assumed to be 30% of the total cost of the civils work (28.7 million USD) 8.3.2 Output and Tariffs

The following table summaries the expected saleable output and bulk tariff in each season from Song Bung 4 Hydropower Project.
Season Dry Wet (July, Aug and Sep) Total
Source: EVN Feasibility study, consultants estimates

Output (GWh) 427.5 109.6 537.1

Selling price (Us Cents/kWh) 4.50 4.20 4.44

Full production is assumed to start in 2013 (the year after construction finishes). Output in the final year of construction is assumed to be 50% of full production. Although in theory Vietnam has created a power market for setting the price of bulk electricity, selling prices are still set primarily in relation to costs rather than market conditions. The selling prices are set to cover costs and provide a satisfactory return on the investment, so it is hardly surprising when the project achieves the desired rate of return. There are two issues; first the methodology used by to calculate the tariff, and whether the calculated price will actually be implemented. However 4.2 USc/kWh is consistent with expected tariff for other new hydropower plants and the expected selling price of bulk electricity from future non-EVN hydropower plants. 8.3.3 Operating Costs

The operating costs of Song Bung 4 Hydropower Project are estimated to be as follows:
Component Asset value (M USD) O & M Costs (as a % of asset value) Annual O & M (M USD)

Civils Mechanical & Electrical Transmission Total


Source: Consultants estimates

95.63 42.04 6.81 144.48

0.5% 1.0% 1.5% 0.69%

0.48 0.42 0.10 1.00

In addition the cost of environmental monitoring is assumed to be 11,000 USD/annum over the period 2012-2016. A hydro tax of 14 VND/kWh is also payable on all output from Song Bung 4 Hydropower Project.

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8.3.4

Weighted Average Cost of Capital

The cost of equity in Vietnam is difficult to estimate because the capital market is still in its infancy. EVN has only recently started to raise small amounts of capital on the Vietnamese capital markets and so there is little track record of what the cost of capital to EVN has been. In March 2006 it issued 22 million USD in a bond issue at an interest rate of average deposit rate + 1.2%. Further issues are expected in the year. EVN is said to be considering issuing international bonds, but has not done so to date. In the absence if any firm information on likely cost of raising money on the international money markets, the cost of capital has been built up from general country data. The existing risk-free interest rate determined by the rates of 10-year treasury bonds issued in VND is about 8.5% for bonds, corresponding to about 3.5% in USD terms assuming current inflation of 5%. The risk rate is estimated at 11% based on the rate for Indonesia, Philippines and Cambodia. The asset beta for Vietnam is assumed to be 0.4, giving an equity beta of 0.85 based on EVNs current equity/long term debt ratio of approximately 29:33. This equity beta compares with an estimated equity beta of about 0.9 for Turkish power companies. Thus the cost of equity (in VND terms) is as follows: 8.5% + (11*0.85)% = 8.5% + 9.4% = 17.9%. Moodys quote a typical interest rate of 10.6%, and a country risk premium of 6% on government bonds for Vietnam, giving a total of 16.6%. An Vietnamese inflation rate of 5% per year, an inflation rate of 0% for the ADB loan, and a tax rate of 28% have been assumed for the Weighted Average Cost of Capital (WACC) calculation. The table below shows the WACC calculation, based on the sample finance plan given in Section 8.2.1, is 4.32%. A minimum test rate of 1.8% has been assumed.
Weighted Average Cost of Capital
Amount (M USD) Weighting Nominal Cost Tax Rate Tax Adjusted Cost Average Inflation Rate Real Cost Actual Rate* Weighted Component

ADB EVN Capital Total

196,44 37,44 233,9

84,0% 16,0%

6,36% 13,50%

28,00%

4,58% 13,50%

0,00% 5,00%

4,58% 8,10%

4,58% 8,10%

3,85% 1,30% 4,32%

* c/f minimum rate Minimum interest rate 1,80%

Source: Consultants estimates, ADB

8.3.5

FIRR Calculation

The table below shows the FIRR analysis based on the above assumptions. The NPV, assuming a WACC of 4.32%, is 94.8 million USD before tax, or 76.5 million USD after tax. This shows that under these assumptions, Song Bung 4 Hydropower Project is financially viable.

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FIRR Analysis for Song Bung 4 Hydropower Project


Cash Flow - Song Bung 4 HPP
Sales
GWh

Revenue
M USD

Capital expenditure
M USD

Operating costs
M USD

Total expenditure
M USD

Net cash flow (Pre tax)


M USD

Profits tax
M USD

Net cash flow (Post tax)


M USD

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 Total

0 0 0 0 0 269 537 537 537 537 537 537 537 537 537 537 537 537 537 537 537 537 537 537 537 537 537 537 537 537 537

0,00 0,00 0,00 0,00 0,00 11,92 23,84 23,84 23,84 23,84 23,84 23,84 23,84 23,84 23,84 23,84 23,84 23,84 23,84 23,84 23,84 23,84 23,84 23,84 23,84 23,84 23,84 23,84 23,84 23,84 23,84

0,00 19,48 42,37 52,16 103,17 5,88

-43,47 179,59

0,00 0,00 0,00 0,00 0,00 1,25 1,48 1,48 1,48 1,48 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47

0,00 19,48 42,37 52,16 103,17 7,13 1,48 1,48 1,48 1,48 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 1,47 -42,00 Before tax Discount rate (WACC) NPV (MUSD) IRR

0,00 -19,48 -42,37 -52,16 -103,17 4,79 22,36 22,36 22,36 22,36 22,37 22,37 22,37 22,37 22,37 22,37 22,37 22,37 22,37 22,37 22,37 22,37 22,37 22,37 22,37 22,37 22,37 22,37 22,37 22,37 65,84

0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,02 0,20 0,39 0,57 0,76 0,94 1,13 1,31 1,47 1,61 1,75 1,89 2,03 2,17 2,31 2,45 2,59 2,73 2,87 3,01 3,15 3,29 3,43 6,26 After tax

0,00 -19,48 -42,37 -52,16 -103,17 4,79 22,36 22,33 22,15 21,97 21,79 21,61 21,43 21,24 21,06 20,90 20,76 20,62 20,48 20,34 20,20 20,06 19,92 19,78 19,64 19,50 19,36 19,22 19,08 18,94 59,57

4,32%

Discount rate (WACC) NPV (MUSD) IRR

4,32%

94,8 7,91%

76,5 7,37%

8.3.6

Sensitivity Analysis

The FIRR has been recalculated for five scenarios under the following changes to the previous assumptions: Dry season selling price reduced to wet season price of 4.2 US cents/kWh. 20 % Increase in capital cost. Start date of full production delayed until 2013 (no change in phasing of Capital expenditure). Output from power plant reduced by 20%. 20% increase in O& M costs.

The table below gives the new NPV for each of the above scenarios, and the breakeven value (i.e. the value required for the IRR to equal the WACC)

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Sensitivity Analysis

Sensitivity NPV Base case 1. Reduction in selling price 2. 20% increase in capital cost 3. Start date delayed until 2013 4. Output reduced by 20% 5 20% increase in O & M costs
94.8 79.3 57.3 77.8 38.2 92.3

Pre tax IRR


7.9% 7.4% 6.2% 7.1% 5.9% 7.8%

Post tax Breakeven


0 3.0 USc/kWh 50.6% 2018 -33% 750%

NPV
76.5 64.6 39.1 31.7 30.9 74.6

IRR
7.4% 6.9% 5.7% 5.6% 5.6% 7.3%

Of the scenarios examined, the FIRR analysis is most sensitive to a reduction in output, and least sensitive to an increase in O&M costs. Output has to reduce by 33% for the NPV to become zero, while O& M costs would need to increase by 750%. Capital costs would have to increase by 50%, or for a 6-year delay before starting production, for Song Bung 4 Hydropower Project to become financially unviable. 8.3.7 Financial Statements for Song Bung 4 Hydropower Project

On the basis of the assumptions about sales, tariffs and operating costs given in the previous section, forecast Profit and Loss, Balance sheets and cash flow statements have been prepared on the assumption that Song Bung 4 Hydropower Project is a stand-alone entity. It is assumed that Song Bung 4 Hydropower Project is 100% owned by EVN and that EVNs capital contribution to the construction of Song Bung 4 Hydropower Project is in the form of equity. It is assumed that EVN takes all the profit after tax as dividend payment since there is little need to build up capital for further investment in Song Bung 4 Hydropower Project once it start operations (these dividend payments can be used to fund other subsequent investments in EVN). The following assumptions are made regarding balance sheet items: Depreciation period 25 years (this is a compromise between the expected life of Song Bung 4 of 40-50 years and the short depreciation period currently used by EVN for hydropower stations). Tax rate 28% Delay in paying operating costs - 1 month Delaying receiving payment for electricity sales 1 month Stocks of spare parts 2% of equipment value

Tables 6, 7, and 8 give the forecast Profit and Loss Statements, Balance Sheets and Cash Flow statements, respectively, for the period 2008-2047 in USD. Tables 9, 10, and 11 give the same information in VND.

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8.4
8.4.1

Past Financial Performance of EVN


Introduction

Electricity of Vietnam (EVN) was founded in 1995 as a result of a Government decision in 1994 as the merger between nationwide power producers and distributors. EVN is under the direct control of the prime minister and competent State Management Agencies. Since its creation in 1995, GoV exerts has undue influence over its operations of EVN in a number of ways. GoV can use EVN as a way of implementing government policies, such as to request EVN to provide cheaper electricity to certain categories of customers, employ more staff to provide employment, provide various social services, and procure materials and services from other state owned enterprises (SOEs). GoV also determines the electricity tariff that directly affects EVNs financial performance. Thus GoV, as EVNs owner, can influence its financial performance, where shareholders in a normal company do not enjoy this privilege. The financial performances and projections of EVN were assessed from the consolidated financial statements of all of its entities and activities. EVNs financial statements are a consolidation of the financial statements of its component entities, including 15 independent accounting entities, 20 dependent entities, six administration units, and 14 construction/project management units. The consolidated financial statements include subsidiaries and joint ventures which the company controls more than 50% of the voting power. Significant balances and transactions between consolidated subsidiaries have been eliminated in consolidation. Since 1998, EVN has taken out a number of large loans from international and local financiers, and plans to continue to do so in the foreseeable future in order to finance its capital expenditures. As well as ensuring these loans get repaid, most international financiers have a wider agenda in promoting the economic reform process in general within Vietnam, and in particular to assist EVN to move forwards operating as a profitable, commercially oriented company. Therefore in the previous projects, EVN has been requested to establish relevant financial reporting measures, such as self-financing ratio, debt service coverage ratio, and return on assets. These measures were included as part of loan covenants. 8.4.2 Historical Performance

The table below summarizes the main financial results over the last six years. A summary of the profit and loss statements, balance sheets and cash flow statements can be found in Annex 1.

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Summary of EVNs Financial Performance 1998-2004


1998 Sales (GWh) Increase in sales Revenue Average revenue Operating expenses Profit before interest and tax Interest payments Profits tax Profit after tax Net fixed assets Equity Long term borrowing Funds from operations Capital expenditure (net) Debt service Cash from internal sources Return on assets Return on equity Operating ratio Self financing ratio* GWh % bn VND VND/kWh bn VND bn VND bn VND bn VND bn VND bn VND bn VND bn VND bn VND bn VND bn VND bn VND % % % % 17709 1999 19531 10% 14121.6 723 12024.6 2097.0 363.7 644.8 1088.5 36676.9 27090.7 19064.1 5882.7 11586.8 1254.6 3019.5 5.7% 4.0% 85.2% 30% 2000 22398 15% 16510.4 737 14562.8 1947.6 550.4 514.5 882.7 45959.2 28366.1 25565.2 7571.4 13939.4 2036.5 4082.6 4.2% 3.1% 88.2% 35% 2001 25843 15% 19209.7 743 17081.9 2127.8 587.3 541.5 999.0 51204.7 28747.2 26601.3 6739.9 9206.6 3811.6 3478.2 4.2% 3.5% 88.9% 32% 2002 30257 17% 23565.5 779 20435.1 3130.5 782.6 676.3 1671.5 58687.1 34175.6 32644.8 8413.1 9915.4 2823.5 6279.4 5.3% 4.9% 86.7% 58% 2003 34907 15% 30245.7 866 27364.8 2880.8 1032.4 19.9 1828.5 65735.3 36749.1 39349.8 10903.8 13329.4 2719.7 9155.7 4.4% 5.0% 90.5% 70% 2004 39696 14% 34530.2 870 30481.7 4048.5 1313.0 296.5 2439.0 74236.4 40540.6 45308.6 10654.4 16256.5 4503.0 7385.1 5.5% 6.0% 88.3% 37%

13472.7 761 11496.5 1976.2 417.5 535.1 1023.6 28995.2 25199.4 12824.7 (2808.1) 4530.8 417.5 (4468.4) 6.8% 4.1% 85.3%

* The 2004 self financing ratio is based on forecast capital expenditure of 30455.5 bn VND in 2005

Source: EVN, consultants calculations

8.4.3

Sales and Income

During the seven year period 1998-2004, volumes of electricity sales have more than doubled to just under 40,000 GWh. Income has more than doubled from 13,472 billion VND in 1998 to 34,500 billion VND in 2004. Average revenue per kWh increased significantly in 2003 compared to 2002, as a result of the tariff increase. However there has been no tariff increase since then and average revenue per kWh increased only slightly in 2004 to 870 VND/kWh. Figure 8-1 shows the increase in sales and revenue per kWh.

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Figure 8-1 Summary of EVNs Sales and Revenue per kWh 1998-2004
45000 1000

40000

900

35000

800

700 30000 600 Sales (GWh) 25000 500 20000 400 15000 300 10000 Revenue (VND/kWh)

200

5000

100

0 1998 1999 2000 Sales (LH scale) 2001 2002 2003 2004

Revenue VND/kWh - RH scale

Source: EVN annual report, consultants calculations

Over 90% of EVNs revenue comes from electricity sales, and 8% from other services and product. Income from the telecommunications business at 232 billion VND in 2004 is less than 1% of total EVN income. The proportion of electricity sales in the residential sector fell slightly from 46% in 2003 to 44.5% in 2004, while sales in the industrial sector increased from 44% to 45.2%. The impact of this change is reflected in the slightly higher income/kWh since industrial customers pay more for their electricity. The remaining 10% of sales are in the agriculture, business services and other categories. There are no significant exports of electricity. 8.4.4 Production and Supply

In 2004, EVN produced over 40,000 GWh at its own power stations and purchased a further 6,000 GWh from IPPs. Figure 8-2 shows the breakdown of supply of electricity by type of plant in 2004.

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Figure 8-2 Summary of Electricity Supply 2004

IPP 13% Diesel 0% Hydropower 39%

Gas turbine 32%

Oil fired TPS 1%

Coal fired TPS 15%

Source: EVN annual report

In 2004, the largest source of power was hydro electricity (39%), followed by gas turbines (32%) and coal-fired power stations (16%). IPPs (includes imports) accounts for 13% of total supply. There has been a significant change in the generation pattern compared to 2003, as summarized in the table below, which has implications for costs.
Summary of Electricity Supply (GWh) 2003, 2004
Hydropower Coal fired TPS Oil fired TPS Gas turbine Diesel IPP Total 2003 18971 7223 891 12131 45 1564 40825 2004 % change 17635 -7.0% 7015 -2.9% 602 -32.4% 14881 22.7% 42 -6.7% 6026 285.3% 46201 13.2%

The total supply has increased by 13%, compared to an increase in sales of 14%, the difference being explained by a reduction in losses. However, hydropower has declined by 7% due to lack of water, and the resulting deficit has been made up primarily from gas-fired power stations, and by a huge increase in power purchases from IPPs. The cost of this replacement power will be significantly more expensive than generating it at hydropower stations. It is understood that hydropower output continued to be below expectation in 2005, and that EVN had to further increase output at thermal power stations and increase imports, particularly from China, which adds to EVNs operating costs. Losses have reduced slightly from 12.23% in 2003 to 12.09%. The scope for further significant reductions in losses in the future will be limited.

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8.4.5

Operating Costs

A detailed breakdown of operating costs for 2004 is not yet available. However, total operating costs increased from just under 22,000 billion VND to almost 26,500 billion VND, an increase of 20%. Similar sized increases in selling and administration costs also occurred. Depreciation is one of the largest operating costs for EVN, accounting for over 30% of its operating costs. Under VAS, depreciation period are in general shorter than those allowed under IAS, which accounts for the relatively high levels of depreciation. EVN also rely on these high levels of depreciation to help fund their future capital expenditure program. The other high costs are fuel for thermal power stations and power from IPPs. At present EVN is paying less than the market price for its coal, but gas is procured on long term contract in USD. Coal prices are expected to increase in real terms as the GoV pursues its policy of making Vinacoal self financing. Other operating costs fell from 4,250 billion VND in 2003 to 1,780 billion VND in 2004, mainly as a result of much lower foreign exchange losses. This is because the USD/VND and JPY/VND exchange rates were fairly stable during 2004. EVN receives no direct subsidies from GoV to cover its operating costs. However, the GoV does inject additional capital to help finance capital expenditure, and other indirect subsidies (such as cheap coal, access to loans from State owned banks) are available. 8.4.6 Capital Expenditure

During 2004, EVN invested over 16,000 billion VND in new capital work, an increase of 3 billion VND compared to 2003. Since 2000, EVN has invested over 90 billion VND in new generation capacity, new transmission lines and distribution networks. Approximately 50% of this expenditure has been financed by taking out additional long-term loans, and the remainder has been financed from its own resources and capital injections by the Government. Total outstanding loans increased by 6,000 billion VND in 2004 to over 45,000 billion VND. During 2004 the Government injected 46 billion VND of additional capital to help finance new capital expenditure, compared to 196 billion VND in 2003. In total since 1998, the GoV has invested an additional 8,000 billion VND, representing about 9% of EVNs capital expenditure. Various transmission and distribution networks in rural areas have been transferred to EVNs balance sheet (both as assets and as a contribution to capital) at no actual cost to EVN. This is an indirect subsidy to EVN since it charges depreciation on these assets (at a fairly high rate), but does not need to repay the cost of obtaining these assets. EVN is expected to inherit more such lines in subsequent years as local communes find it difficult to finance the repair and upgrading of such assets. 8.4.7 Overall Position

Overall EVN is in a healthy financial position, and it managed to increase its post tax profit in 2004 by over 80%, in spite of no increase in tariffs and a large increase in its operating costs. The additional profit is mainly due to an increase in sales and a reduction in foreign exchange losses. It has regularly made a profit and is generating sufficient cash to fund its current operations. However, significant changes in operating costs will occur in future years (e.g. real increases in price of coal, purchasing more electricity from IPPs, and higher cost of electricity from new plants) mean that without significant tariff increases the present level of profits can not be maintained. The proposed equitisations will provide some funds, but this is a one off exercise and only delays the need for real tariff increases. EVN recorded a revaluation of certain assets of Vinh Son-Sing Hinh hydropower plants,
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Khanh Hoa Power Company (belonging to PC3) and the Electrical Equipment Manufacturing Company. The Auditors remark that this selective revaluation of certain assets in a particular asset class is not in accordance with IAS reporting standards, which require the revaluation of fixed assets to be recognized for the entire category of assets, and not just certain ones6. 8.4.8 Compliance with Covenants

The Auditors stated in the 2004 accounts that EVN complied with the Self financing ratio covenant, i.e. the self financing ratio was at least 30%. The table in Section 8.4.2 shows that in 2004 it was 37%.

8.5
8.5.1

Future Financial Performance of EVN


General

EVN is a large and financially complex entity operating in a rapidly changing business organizational and institutional environment. It operates under a set of often conflicting objectives than can make it difficult to plan and operate effectively. At one level it is responsible for providing electricity, a basic necessity both for the population and industry, and is heavily criticized when it fails to do so. However, the Government uses electricity tariffs as a form of social policy and thus the income EVN receives is not necessarily that required to cover all its costs. The Government has realized that this situation can not continue and that the power sector needs to be run and operated on a more commercial and business orientated basis. To this end it is planning to establish some sort of electricity market in generation and supply to encourage greater efficiency. However it will be some time before this is established and functioning, and in the mean time the pressure is on EVN to become more responsive to the needs of the country and end users. It is important that EVN remains financially viable in the future if it is to fulfil its role of being the main supplier of electricity to end users in Vietnam and provide the necessary energy to enable the economy to grow. The existing system is currently operating at maximum capacity and there is little or no slack to meet additional demand. Without a reliable supply of electricity in the future there is real danger that the economic growth will slow down or living standards will decline due to frequent and prolonged power cuts. It is therefore vital that EVN is able to fund its future operations. EVNs major costs in the future are fuel for thermal power stations, power purchases from non-EVN owned power stations, capital expenditure to replace worn out overloaded assets and provide additional capacity to meet expected demand, and repaying existing and future loans that it has taken out to fund capital expenditure. It is vital therefore that the future tariffs cover not only the operating costs of EVN, but also the cost of the necessary investments, including repaying the loans EVN needs to help fund this expenditure. Also EVN has to ensure that it has sufficient funds to comply with any loan covenants. Without sufficient money, EVN will be unable to fund the necessary capital expenditure and so the reliability of supply will fall. To assist with financial planning a computer financial model has been written to enable EVN to evaluate the financial implications of different assumptions about future operations. To this end a new business model of EVN has been developed to assist EVN evaluate the impact of changes, in respect of the following:

The Auditors made a similar comment on the 2002 accounts regarding the revaluation of Hoa Binh HPP.
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Future Costs. The cost structure of EVN will change significantly in future years. The cost of fuel will continue to be a significant cost and so EVNs future costs are closely linked to changes in the cost of buying coal, gas and fuel oil. EVN is also planning on purchasing significant volumes of electricity from IPPs in the future, which will make this a significant additional cost. EVN is embarking on an ambitious capital expenditure plan to install the necessary capacity to meet future demand, and obviously this has to be paid for. Much of this expenditure will be financed by taking out loans, and thus the cost of servicing these loans will increase overall costs. It is important that EVN has a realistic estimate of all future costs, and the factors that drive these costs. End User Tariffs. These determine EVNs income and hence its profitability and viability. End user tariffs will need to cover these future operating costs together with the cost of funding the capital expenditure program, servicing the loans and complying with loan covenants. If tariffs are set too low then EVN will not have the necessary funds to operate and expand the system, resulting eventually in power shortages. However tariffs need to be set on the basis that EVN operates in an as efficient way as possible by eliminating unnecessary expenditure and getting best value from money from its expenditure. Institutional Aspects. The structure of EVN, and the power market in general, is changing, and this will increase pressure on EVN to be financially and commercially viable. The unbundling of EVN into separate generation, transmission and distribution entities will increase transparency and reduce the scope for implicit cross subsidies. The planned equitisation process will only be a success if the new shareholders obtain a satisfactory return on their investment. Finally the introduction of a power market into Vietnam will mean EVN will be subject to commercial or regulatory pressure to be more competitive.

The existing financial model (Independent Creditors Model - ICM) is more of an accounting model than a business model and as such not really suitable for examining the issues described above. The emphasis in the existing model is on producing consolidated financial statements rather than modeling the main processes driving the business. The consolidated data required by the existing model is not readily available, and the results not useful in monitoring and controlling the main business activities. The existing model does not look at the various existing or proposed new entities within EVN, even though some of these are significant businesses in their own right. Many of the assumptions (such as the capital expenditure plan) are hard wired into the existing model, making it very difficult to evaluate the impact of changes in these assumptions. Others issues, such as equitisation are omitted altogether. It is difficult to carry out meaningful sensitivity analysis of a particular set of assumptions 8.5.2 Outline of New Business Model

8.5.2.1 General The main driver for the model is the demand forecast defining how much electricity different categories of consumer require, and the associated capital expenditure and generation schedule to meet this demand. The information given in the draft Master Plan VI is planned to be used since this gives the latest demand forecasts and associated investment plan and generation schedule. The links between demand, capital expenditure program and generation schedule are complex and these will not be modeled within the existing business plan. Instead the demand forecasts, capital expenditure plan and generation schedule will be assumed fixed. In order to perform sensitivity analysis on these key variables, various

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different scenarios will be included (e.g. 10% reduction in demand, 1 year delay in capital expenditure program). From this information an energy balance can be obtained and this will be used to determine the expected revenues and cost of generating, transmitting and distributing this electricity. The main modules in the model are as follows: Distribution Companies. Each of the planned new 58 equitised provincial distribution companies and the existing ones that are not planned to be equitised are modeled separately. The cost of operating the 110 kV network is excluded from the model of each equitised distribution company; instead it will be included in the single buyer entity since not all the new PCs will operate the 110 kV network. Power Plants. Each existing and planned EVN power plants, including JVs where EVN has a majority shareholding (referred to as EVN JV Power plants, to distinguish them from other JV where EVN is a minority shareholder), is modeled separately. It is assumed that each power station sells its electricity to the Single Buyer Entity. Single Buyer Entity. This entity serves two purposes in the proposed model. First, it acts as single buyer of electricity by buying electricity from all EVN power stations (including EVN JV PP), Other JVs, IPPs, and imports, and then selling bulk electricity to each Power Company. Second, it operates the HV transmission network, and the three hydropower plants (Hoa Binh, Tri An and Yaly) that are planned to stay in total EVN ownership. The costs of the Single Buyer are the cost of buying electricity from other power stations, the cost of operating the 110 kV and above transmission network, and the operating costs of Hoa Binh, Tri An and Yaly hydropower plants.

In addition there are simple modules for the non-core businesses: Telecom, the Electrical and Mechanical Manufacturing Companies, and the Consulting Companies. Figure 8-3 illustrates the main cash flows between the various modules:

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Figure 8-3 Summary of Main Cash Flows Between Entities


Dividends Equitisation Proceeds Dividends

Customers

Non Core Businesses

Operating Costs eg Wages, Materials, Services, Finance costs.

End Users

64 Power Companies

EVN Single Buyer of Electricity


(Including HV Transmission Hoa Binh, Tri An and Yaly HPP)

EVN Equitised and EVN JV Power Plants

Coal Gas Oil

IPPs + Imports

Other JVs

Loans, loan repayments

The main cash flows are for the core business. End users pay the Power Company for the electricity supplied and used. The Power Company in turn pays its own operating costs (e.g. wages, materials, interest on money it has borrowed). It also pays the Single Buyer for the supply of bulk electricity. The Single Buyer then pays all the Power Plants for the electricity they have generated at the appropriate tariff. The EVN Power Stations use this money to pay for the fuel (coal, etc) and their own operating costs. Also shown are the expected flows from the core activities to the non-core businesses, which will also have their own customers for their services and products, and their own operating costs. Some of their income will come from the core business entities in EVN. The cash flows of loans to finance the capital expenditure program of each entity, and the interest and loan repayments are also shown. Equitisation proceeds from the sale of shares in equitised Power Companies and Power Plants, and Non-EVN contributions to EVN JVs flow into EVN (represented here by the Single Buyer) These Entities will also pay dividends to their shareholders. EVN will also receive a proportion of the profits from Other JVs it has invested in. The Model is described in more detail in Annex 2. It is important to realize the limitations of such a model. EVN is a large and complex organization, with over 150 separate entities, each of which is a significant business in its

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own right. The model is by necessity an approximation of EVNs actual operations. The model requires a lot of data initially to seed the model, some of which is readily available, or only available with considerable effort. Where relevant data is not readily available, sensible estimates have been used until more accurate data become available. 8.5.2.2 Key Inputs The key inputs to the model are: Enduser demand, capital expenditure plan, generation schedule (from Master Plan VI). Financing of capital expenditure (split of expenditure by foreign and local currency, % of financing by loans, interest rate, repayment period). Planned equitisations (entity, timing, expected % to be equitised). Future end-user tariffs by major category. EVN Joint Ventures Power Plants (timing, amount of EVN contribution). Future fuel costs, cost of power purchases. Other operating costs by entity. Information of Other JVs (total cost, EVNs share, expected return)

Further details of the inputs are given in Annex 3. 8.5.2.3 Outputs The main outputs are: Financial statements and performance indicators for each entity. Consolidated financial statements and performance indicators for Core Business. Consolidated financial statements and performance indicators for EVN as a whole. Sensitivity results. Internal transfer prices.

8.5.2.4 Results The User Guide for the Business Model is given in Annex 4.

8.6
8.6.1

Financial Management Capability of EVN/ATD3


Introduction

This Section describes the financial management capability of EVN to deal with the proposed ADB loans for the Song Bung 4 Hydropower Project. It addresses some of the financial management issues and requirements associated with the proposed loans, and whether EVN has the necessary capability to manage the proposed loans in a satisfactory way to meet ADB requirements. The analysis has been divided into two parts; the arrangements for receiving and repaying the loan by EVN, and the monitoring and control of expenditure financed within EVN. ADB plan to make the proposed loan direct with EVN, rather than with the MoF. This implies that the procedures for receiving, and more importantly repaying the loan will be different
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from previous loans, where the MoF was responsible for making timely repayments of interest and principal to ADB. Instead this responsibility will now fall on EVN. The ADB Financial Management Assessment Questionnaire was used as the basis for obtaining the information together with information obtained when doing similar assessment in the Northern Power Project Management Board in 2005. The questionnaire is given in Annex 5. 8.6.2 Executing and Implementing Agency

EVN, the Executing Agency for the proposed loan, was founded by decision no 562/TTG dated 10 October 1994 issued by the Prime Minister, and Government decrees 14/CP dated 27 January 1995, and is under the direct control of the Prime Minister and competent State Management Agencies. EVN is a vertically integrated electricity utility responsible for: The production, transmission, and supply of electricity. The design and construction of projects. The manufacture of electrical equipment. Providing related services to customers.

EVN is an independent legal entity acting as a holding company overseeing various business units, consisting of 15 independent accounting entities, 20 dependent accounting units, 14 construction/management boards, six administrative units and subsidiaries where EVN holds more than 50% of the voting power. The table below lists major projects managed by EVN:
Summary of Major Projects Managed by EVN
Project Loan External Financiers ADB ADB ADB JBIC JBIC JBIC JBIC JBIC JBIC JBIC WB WB WB Amount ($Million) $80.00 $100.00 $120.00 61,932.00 72,826.00 53,074.00 7,000.00 43,819.00 14,030.00 13,127.00 $199.00 $150.00 $225.00 1995 1997 2004 19931998 19931998 19931997 1996 19972002 19982002 2000 1998 2000 2002 Year

Power Distribution and Rehabilitation Project Central and Southern Viet Nam Power Distribution Northern Power Transmission Sector Project Phu My Thermal Power Plant Project Pha Lai Thermal Power Plant Project Ham Thuan-Da Mi Hydropower Project Da Nhim Power System Rehabilitation Project O Mon Thermal Power Plant and Mekong Delta Transmission Network Project Dai Ninh Hydropower Project Phu My-Ho Chi Minh City 500 kV Transmission Line Project Transmission and Distribution Project Rural Energy Project System Energy, Equitization and Renewable Energy Project

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The Implementing Agency for the proposed ADB loan will be Hydropower Project Management Board No. 3 (ATD3) in Da Nang, a project management unit within EVN that is responsible for the development of hydropower projects in Central Vietnam. ATD3 reports to EVNs Vice President for Generation Construction. ATD3 is an administrative unit of EVN formed in accordance with Decision No 176 NL/TCCBLD dated 1 April 1991 by the former Ministry of Energy (now MoI). Later on it was renamed to ATD3 with decision no 361 DV/TCCB-LD dated 27 May 1995, and Decision 295 /QD-EVNHDQT dated 13 November 2002 by EVN. ATD3 is authorized by EVN to carry out project management of new hydropower plants in Central Vietnam from the initial stages of river resource planning, pre-investment work, and construction until the plant becomes operational. The principle activities of the finance department of ATD3 are: Obtaining detailed information on planned source of investment capital (including funds from State Budget, EVN, loans and donors) for each investment, and using these funds according to the investment loan plan. Recording the cost of the actual work done. Reviewing and monitoring ATD3s compliance with the State Standard and Regulation for construction and investment, and monitoring the management and usage of materials and assets. Authorizing payments to the contractors. Preparing financial statement for senior management and other relevant agencies. Preparing and submitting a report when the project is completed. Controlling the internal finances of ATD3.
Summary of Major Projects Managed by ATD3 Name of Project
Song Hing A Vuong Song Ba Ha An Khe Kanak Song Tranh 2

The following table summarizes the main projects ATD3 has worked on:

Main Donor
SIDA JBIC Chinese bank

Value
1860 bn VND 3 860 bn VND 3 715 bn VND 3 755 bn VND 4 152 bn VND

Status
Yes Ongoing Ongoing Ongoing Ongoing

EVN and ATD3 have experience of implementing major investment projects funded by international donors. Since its inception in 1995, ATD3 has managed several projects funded by international donors, including SIDA and JBIC. In addition it has managed other investment projects funded by EVN. Similar project management boards manage other investments in generation, transmission and distribution projects in other parts of Vietnam. ATD3 can provide related services, such as construction supervision of hydropower and transmission projects, appraisal and evaluation of cost estimates for power projects, consulting services in preparation of bidding documents, and evaluation of bids. The following is an organizational chart of ATD3:

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Director Tran Van Hai

Department of Environment & Resettlement Deputy Director Tran Ngoc An

Technical Department Deputy Director Le Duong Thuan

Department of Investments in HP (Vu Gia Thu Bon rivers) Deputy Director Nguyen Van Le

Department of Investments in HP (Song Ba) Deputy Director Dang Van Tuan

Project Department Nguyen Van Chuang

Planning & Economic Department Trinh The Dung

Organisationadministrative Department Vu Duc Toan

Finance & Accounting Department Nhu Thiep

Le

Materials & Equipment Department Nguyen Van Son

ATD3 is registered under IS09001 since 2004. 8.6.3 Flow of Funds

There are two planned sources of funds for the proposed investment; ADB and EVN. The funds from each source will be used to fund the following activities.
Type of Expenditure Equipment packages procurement by ICB Direct purchase packages (Foreign equipment) Civil works packages (ICB) Local overheads, project preparation, administration International consultants (ICB) Local consultants Resettlement costs Contingency Interest during construction (ADB Loan) Taxes ADB EVN

Disbursements of ADB loan for civil works and equipment procured under ICB, direct purchase and LCB will be through direct payment procedures in accordance with ADBs Loan Disbursement Handbook. Payment for other services funded by ADB will be via a local impress account held by EVN HQ (and not under the control of ATD3). Payments to be funded by EVN will be via a dedicated bank account under the control of ATD3, funded by EVN HQ. The following diagram shows the expected flow of funds from EVN and ADB:

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Figure 8-4 Funds Flow Arrangements


EVN HQ HPPMB3 Taxes

EVN's retained earnings

Project Bank a/c

Overheads etc

Expenses Funded by EVN Impress account Local Expenses funded by ADB

ADB

Supplier Funded by ADB

Cash flows

Co-ordination

Foreign and local equipment procured by either ICB or LCB under the loan will be paid directly by ADB after approval from EVN (who will be advised by ATD3). For local works to be paid for under the ADB loan, EVN HQ (and NOT ATD3) will establish and control an impress account. EVN (at ATD3s behest) will request payments from ADB into this account as required, depending on expected phasing of this expenditure. ATD3 will be responsible for checking invoices etc, and requesting payments from this account, but EVN HQ would actually make the payments. For expenditure not covered by the ADB loan, ATD3 will establish a separate bank account into which EVN will transfer the necessary funds as required. ATD3 would make payments from this account as necessary. 8.6.4 Repaying the Loan

EVN intend to establish a new company, Song Bong 4 Hydropower Company (SB4HPC) to own and run the Song Bung 4 Hydropower Plant. The proposed ADB loan would appear on SB4HPCs balance sheet, but the exact form depends on the future legal status of SB4HPC. If it is an independent entity (similar to Cao Tho) with EVN owning all the shares, then an internal on lending agreement between EVN and SB4HPC will probably be required, since ADBs agreement will be with EVN and not SB4HPC. However, if SB4HPC is equitised like other power plants, then the loan could appear directly on SB4HPCs balance sheet. Either way, SB4HPC would be responsible within EVN for repaying the loan and the interest. SB4HPC will have to repay the loan via the income it receives from selling its electricity in the proposed bulk power market. Although some work has been done on designing and developing this market, it is not functioning at present and is unlikely to do so for another year or so due to delays in establishing the necessary communication systems.

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The ability of SB4HPC to repay the loan depends on many factors, including: Setting of cost reflective end user tariffs that will enable EVN to recover sufficient money to cover all its costs. Without this (and assuming no Government subsidy) some parts of EVN will not have enough money to cover their costs. Setting cost reflective bulk supply tariffs. It is important that the price paid by distribution companies covers the cost of supplying bulk power; otherwise there will be insufficient money to pay all suppliers. SB4HPC must be allowed to set a cost reflective tariff for selling its bulk electricity that will cover not only the operating costs, but also the debt servicing costs. This tariff needs to be robust enough to provide sufficient income in dry years. Also some adjustment mechanism to the tariff to compensate for any adverse change in the VND/USD rate of exchange. The whole system must be liquid in the sense that distribution companies must collect all the money that is owed to them in a prompt and timely way. Also there need to be a proper functioning settlements system in place between the various distribution and power companies.

It would be appropriate for ADB to include a covenant in the proposed loan agreement saying that ADB requires to see the proposed charter of the new SB4HPC before it is enacted, and also review any proposed on-lending agreement between EVN and SB4HPC. 8.6.5 Staffing

ATD3 currently has around 100 employees, with specialists in engineering, environmental, resettlement, economic and finance. The Director, Mr Tran Van Hai, is in overall responsibility for ATD3, and reports to EVNs Vice President for General Construction. The head of ATD3s finance and accounting department, Mr Le Nhu Thiep, reports direct to Mr Hai, Director of ATD3, and he has one deputy. The accounting section is responsible for record keeping and the production of reports. The finance section is responsible for identifying the sources of funds, signing contracts, and making disbursements. The finance department has a total of 8 staff plus. Most of ATD3s financial staff are accountants or economists trained to record the various transactions incurred by ATD3 in implementing its projects. Most of the senior accounting staff worked in other parts of EVN before transferring to ATD3. The following table summarizes the qualifications of the senior ATD3 financial staff:
Head of Finance Name Age, years Qualification Time in present post, years Previous work
Source: Finance Department, ATD3

Le Nhu Thiep 41 BA Finance 19 None

Deputy Manager (Finance) Nguyen Dinh Phuc 35 BA Economics 15 None

Written specific job descriptions for each position exist, and four are given in Annex 6. Detailed day-to-day work and priorities is determined by the head of Finance or his deputy. The staff work to the detailed rules, procedures and methodologies set by the GoV (and issued by the MoI and MoF) regarding the keeping of accounts.

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ATD3 finance staff claim that they have sufficient staff to carry out all their tasks and meet deadlines. Most of the staff has Vietnamese accounting, finance, and economic or similar degree qualification. The ATD3 finance staff has considerable experience of working with projects funded by donor loans, and senior staff are familiar with the needs of such organizations. No specific training scheme or program exists for ATD3 finance staff. Some staff attended a course run by ADB at Hoi An earlier in the year. No specific or formal anti-corruption or conflict of interest measures exist within EVN or ATD3. ATD3 employees can report any suspicions to the Inspectorate department who will investigate and report back. Vietnamese law expects people who suspect others of participating in corrupt practices to report them to the appropriate authorities. ATD3 (and EVN) follows the GoV system of adequate safeguards to protect State owned assets from fraud, waste, abuse, and corruption. Measures taken include the issue of the Anti-corruption Ordinance dated 26 February 1998. The Ordinance defines the corruption activities, and prescribes rights and responsibilities of the Standing Committee of the National Assembly, State Management Agencies, and other organizations in detecting corruption. Solutions for preventing and detecting corruption, and penalties for corruption, are also included. This legislation - coupled with the determination and strictness of law enforcement agencies in recent corruption cases - has restored some degree of confidence in the law and justice systems regarding anti-corruption measures. All additions or amendments to ATD3s payroll have to be approved by the director of ATD3. 8.6.6 Accounting Policies

EVN is required by GoV to comply with the Vietnamese Accounting Standards (VAS). Accordingly, EVN has adopted, for all its business units, uniform accounting policies and procedures, documentation of transactions, and charts of accounts suitable to power sector. EVNs system is designated as a mixed accounting system whereby: (i) centralized accounts are maintained for the generation and transmission of electricity (including for the Project); (ii) distribution companies are independent accounting units, and; (iii) consolidation of accounts take place only at the EVN level as a whole. The consolidated accounts are later converted to IAS. EVN and ATD3 implement GoV accounting policies and procedures that ensure that costs allocations to the various funding sources can readily be identified. This system allows for the proper recording of project financial transactions, including the allocation of expenditures to the respective cost components, disbursement categories, and sources of funds. Controls are in place concerning the preparation and approval of transactions. The systems used are adequate to properly account and report on project activities and disbursement categories. ATD3 use EVNs recently introduced computerized finance system which means it should be easily possible to reconcile the General Ledger at EVN and subsidiary ledgers at ATD3. All the accounting and supporting documents are retained by ATD3 on a permanent basis. The Director of ATD3 has full authorization to execute all transactions under the projects. The Financial Director delegates authorities to his deputy and finance and account staff to prepare the recording of the transactions, including the custody of assets involved in the transactions. Project management staff orders and monitors all goods and services, and all payments are prepared by account staff. Bank reconciliation is prepared by account staff and approved by the Director of ATD3. ATD3 has prepared 61 manuals relating to the control of their work, and these are given in Annex 7. ATD3 plan to issue further ones dealing with the specific requirements of the planned ADB loan.

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8.6.7

Budgeting System and Payments

EVN and ATD3 have proven experience in the efficient management, budgeting, and disbursement of funds in previous projects. The Projects budgets, including physical and financial targets, will be prepared in sufficient detail for all significant activities under each project component. The actual expenditures should be compared to the budget at least on a quarterly basis, and explanations prepared for significant variations from the budgets. The procedures are in place to plan project activities, collect information from EVN and ATD3. Historically, project plans and budgets have been realistic, having been based on valid assumptions, and developed by knowledgeable individuals (ADB staff, consultants, EVN and ATD3 staff). Approvals for budget variations should be obtained in advance, though the facility for retrospective authorization does exist in Vietnamese regulations. ATD3 can approve deviations of up to 30 billion VND, and any amount over this needs EVN approval. EVN has implemented the following invoice-processing procedures. Project management staff prepares copies of purchase orders and contracts, and receive dispatch and delivery notes. The project management staff and accounting staff check invoices for ATD3, account staff compares invoice quantities, prices and terms, with those indicated on the purchase order and with records of goods and services actually received and check the accuracy of calculations. Sometimes ATD3 employs a bank to check the details of invoices supplied by foreign companies, particularly to check that taxes, duty, shipping costs, insurance and other costs are consistent with the contract. Information on approvals etc is not recorded on the invoice itself, but in a separate file. ATD3 claims the computer system makes it is impossible for an invoice to be paid twice. However, this system makes it difficult for somebody who is not very familiar with ATD3s systems to audit a particular payment. All the relevant paper work is stored as required under Vietnamese law. Each year ATD3 staff prepares a budget of the likely work that they are responsible for, taking into account the overall project timetable, work done to date, remaining funds and priority and critical items. This is then sent to EVN for approval, and the resulting budget forms the plan for that year, and is the basis against which actual progress and expenditure is made. 8.6.8 Policies and Procedures

ATD3 and EVN follow Vietnamese Accounting Standards (VAS). EVN has an adequate policy and procedures manual to guide activities and ensure staff accountability. In March 1998, ADB worked with MOF in developing a manual entitled Manual on Project Accounting and Disbursement Procedures under ADB Financed Project. EVN uses this manual and updates as necessary in accordance with the changes required by ADB and GOV. The procedures exist to ensure that only authorized persons (MOF) can alter or establish a new accounting principle, policy or procedure to be used by EVN and ATD3. The written policies and procedures have covered all routine financial management and related administrative activities. ATD3 uses EVNs new computerized finance system (developed with WB funding) to record all transactions. This is a sophisticated system that allows invoice details to be input, payments to be authorised and management reports produced. Summary information is transferred electronically to EVN HQ on a monthly basis The adequacy of the existing accounting policies and financial procedures for EVN and its business units has been assessed by the World Bank7 in light of the VAS and International Accounting Standards (IAS). A comparison of major accounting policies between VAS and
7

World Bank, 1997, Project Appraisal Document for Viet Nam: Transmission, Distribution, and Disaster Reconstruction Project Page 151

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IAS shows that, for most part, the Business Accounting Policies promulgated by MoF for all Vietnamese enterprises and adopted by EVN, conforms with IAS. However, it should be noted that certain policies are still at variance with IAS, particularly: (i) accounting for foreign currency/translation, (ii) fixed asset capitalization, (iii) fixed asset depreciable amount, rate, and method, (iv) amortization of intangible assets, (v) amortization of organization expenses, (vi) long-term investment, (vii) reporting requirement, (viii) accounting frameworks, and (ix) audit. EVN prepares its annual financial statements in accordance with IFRS/IAS and that these are audited in accordance with ISA. 8.6.9 Cash and Bank

The Director of ATD3 and the Deputy Director of Finance are the authorized signatories in the bank accounts. There is no income or receipts directly associated with the project and so no need to review procedures for depositing monies. EVN has its own established procedures and mechanisms for collecting money from end users in payment of their electricity bills Bank statements are reconciled every month by the deputy head of finance and the appropriate ATD3 project manager. All unusual items on the bank reconciliation are reviewed and approved where appropriate by the ATD3 Director and the Finance Director. 8.6.10 Safeguard over Assets

ATD3 is responsible only for implementing the Projects. Once complete the hydropower plant is handed over to another part of EVN who will be responsible for its operation and maintenance. 8.6.11 Reporting

EVN and ATD3 are able to maintain separate accounts for the Project. ATD3, through EVN, will need to submit regular progress reports to ADB on a quarterly basis. The reports should provide a narrative of progress made during the period, changes in the implementation schedule, problems or difficulties encountered, and the work to be carried out in the next period. The progress reports should also include a summary financial account for the investment component, consisting of project expenditures during the period year to date, and total expenditure to date. The quarterly progress reports should be submitted to ADB within one month of the end of each quarter8. ATD3 should be able to prepared these financial reports automatically from their finance system, but some assistance will probably be required initially to ensure the reports are providing the necessary information and that all the information balances. In addition to the quarterly reports, within six months of the close of the financial year, ATD3 through EVN should submit to ADB annual audited accounts of EVN, and annual audited financial statements of the Project. The annual project accounts should contain detailed descriptions of the fund sources and expenditures. The annual financial statements of EVN should consist of an income statement, balance sheet, cash flow statement, and related notes to financial statements. The annual financial statements will be a consolidated of all EVNs operations. ADB will review the implementation and operation of the Project based on these reports and meet with EVN, ATD3 and the GOV annually to discuss project progress. A project completion report (PCR) should be submitted to ADB within three months of project completion. ADB loan funds and local counterpart funds are transferred to EVN to carry out the Project.
EVNs progress reports for previous projects have been submitted on time and the quality of these reports was adequate
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Although ATD3 is not a separate stand-alone company, it produced its own annual financial reports. Its balance sheet is incorporated on EVNs consolidated balance sheet. When ATD3 procures new assets for a particular project, these are added to ATD3s balance sheet. When a project is complete, the assets associated with the Project are removed from the ATD3s balance sheet and transferred to EVNs entity (or entities) that will operate and maintain the Project. 8.6.12 Internal Audit and External Audit

Financial statements of EVN and ATD3 are currently audited annually by independent auditors. Experiences from the previous projects indicated that there were no delays in the audit of EVN and ATD3 since 1999. The audit reports are normally issued annually on 31 May. The audit of EVN was conducted mostly in accordance with the International Standards on Auditing for public institutions. During 2001, EVN discovered that certain costs were improperly included as part of construction in progress as at 31 December 2000. This led to the financial statements for 2000 being restated. In 2002, EVN revalued some of its power station assets. The external auditors commented that this revaluation was against IAS principles because any revaluation should be applied to the whole class of assets, and not just a sub set. This revaluation increased the value of assets by about 3,000 billion VND. Otherwise the auditors have made no significant qualification to EVNs accounts during the last five years. The external auditors have commented that generally EVN, and all of its units keep, their accounts in a proper manner consistent with Vietnamese laws and regulations. The auditors have commented on that the units of EVN have improved the speed with which they produce their accounts over the last few years, and that fewer management letters have noted improved procedures in recent years with fewer significant internal control issues identified, while the number of qualified audit opinions has been reducing. EVN established its Internal Audit Department in March 1998. It is headed by a chief of internal audit supported by five professional accountants. Currently, EVN relies heavily on direct supervision, detailed reporting, and authorization from top management for internal control. This internal audit ensures proper checks and balances and delineation of responsibilities. Internal reviews are conducted as follows: (i) inspection on compliance with EVN policies and GOV rules and regulations are done by the Inspection Department with a team composed of selected representatives from the various business units, (ii) inspections for certain activities of business units by an ad hoc inspection team selected by the Director General, (iii) accounting supervision by the Finance and Accounting Department team, and (iv) inspections by the Management Board and by the Control Section of the Board. Inspections are conducted based on the guidelines of the GOV and focused on the reviews of plans, expenditures, contracts and compliance. ATD3 has not yet been subject to an internal audit report. The consolidated financial accounts of EVN are submitted to the Ministry of Industry (MOI), MOF and Tax Department for review and approval. MOF audits are used to determine tax liabilities, scheduled payments of state-rented capital, and other financial matters. The revision committee of the Ministry of Finance has the right to audit any part of EVN, but so fat ATD3 has not been subject to such an audit. EVN prepared financial statements of its previous projects in accordance with Vietnameses Accounting Standard (VAS). Simple financial statements are prepared by ATD3 system on monthly basis and the reporting should be adopted to report on this Project. Although it could be useful to try to link physical progress with financial progress so as to predict estimated completion date and total cost, to a large extent this is not necessary. Most contracts let by ATD3 are fixed cost contracts where the contractor is paid a predetermined amount when he completes a specific amount of physical work. Only in exceptional circumstances is it

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necessary to amend the contact because of unforeseen circumstances. Financial reports clearly compare the actual expenditures with budgeted and programmed allocations. The financial reports are prepared by automated accounting systems using spreadsheets and other proper computerized programs. Under the current accounting system, all EVNs dependent units, including ATD3, prepare and submit monthly accounting, financial statements and other financial reports to EVN. Independent accounting units on the other hand submit their reports quarterly. EVNs Accounting Department reviews the reports prior to submission to EVNs Management Board for consolidation. EVNs computerized accounting system, while currently in use, is still under evaluation and improvements are being introduced as necessary. Financial statements prepared by ATD3 focus on maintaining separate records and accounts adequately. It could identify goods and services financed from the proceeds of the loan, the other financing resources received, the expenditures incurred in the Project, audit of resettlement expenditures, and the uses of local funds. ATD3 has used the computerized financial management system that can produce the necessary project financial reports. EVNs and ATD3s finance and account staff has been adequately trained to maintain the systems. The management organization and processing system have safeguarded the confidentiality, integrity and availability of the data. EVN will need to prepare terms of reference acceptable to ADB for the annual project audit. The auditing company should inspect and substantiate the accuracy and sustainability of accounting documents and figures, and other accounting finalization reports kept by EVN and ATD3. 8.6.13 Conclusion and Recommendations

In general ATD3 appears as a fit and proper body to administer the propose ADB loan for the Song Bung 4 Hydropower Project. In general the assessment identified no weak points. The staff will require training in ADB procedures, but they should have little difficulty in understanding and implementing these. Two minor points were identified: Although the computer system is backed up on a regular basis, the backups themselves are stored on ATD3s premises, rather than on a remote site ATD3 has no specific experience of administering an ADB loan and it could be useful if somebody from a PMB that has ADB loan experience (e.g. NPPMB) could visit them to discuss the details of administering the loan.

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Annex 1

EVNS HISTORICAL FINANCIAL STATEMENTS

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Balance sheets
bn Dong

Assets
Non-current assets Fixed assets Construction in progress Deferred tax assets Investments in Associates Other non-current assets Total Current assets Bank balances and cash Trade and other receivables Inventories Other current assets Total TOTAL ASSETS

31/12/1998 31/12/1999 31/12/2000 31/12/2000 31/12/2001 (restated) 18213.36 10738.89 18747.19 17807.39 23716.11 22103.52 23716.11 20971.16 30914.52 15926.11

31/12/2002

31/12/2003

31/12/2004

45082.39 9069.96

42.94 28995.19

122.28 36676.85

139.60 45959.23

4157.04 48844.31

4364.05 51204.68

4534.76 58687.12

49121.67 10983.85 609.70 119.08 4900.95 65735.25

56064.55 12704.29 304.80 197.80 4964.93 74236.36

4.00 5467.38 3952.14 709.51 10133.04 39128.22

5306.47 3919.57 5123.20 513.82 14863.07 51539.92

6693.53 2619.07 5392.14 503.87 15208.61 61167.84

6693.53 2619.07 1374.70 503.87 11191.17 60035.48

7653.08 2665.28 1731.36 670.29 12720.01 63924.69

10791.67 4075.45 2298.71 463.36 17629.18 76316.30

12855.32 5748.96 2859.22 518.11 21981.62 87716.87

12232.24 7395.68 3777.41 797.95 24203.28 98439.65

Equity and Liabilities


Equity Capital & funds Capital Fixed assets revaluation reserve Funds and reserves Undistributed profit Total Minority Interest Long term borrowing Curent liabilities Trade and other payables Short term loans Current portion of LT borrowings Other current liabilies Total TOTAL EQUITY & LIABILITIES 12824.69 19064.11 25565.18 25565.18 26601.32 32644.79 24073.52 1108.85 17.06 25199.43 25503.64 1399.19 187.88 27090.71 26542.23 1761.32 62.57 28366.12 26073.46 1761.33 62.57 27897.36 26831.34 1850.625 65.20 28747.16 28729.63 3154.31 2012.34 279.36 34175.64 32698.53 3154.31 1875.42 (979.15) 36749.11 22.35 39349.76 35540.12 3689.37 1721.76 (410.63) 40540.63 57.14 45308.56

4544.31 44.84 10.41 585.97 5185.54 43209.65

4290.35 43.96 494.22 556.57 5385.10 51539.92

5112.56 68.29 1287.65 768.04 7236.54 61167.84

5217.00 68.29 1287.65 6572.94 60035.48

6843.02 112.84 1620.35 8576.21 63924.69

7717.75 136.35 1641.77 9495.87 76316.30

8670.97 146.70 2777.98 11595.65 87716.87

8917.60 391.96 3223.76 12533.32 98439.65

Profit and Loss Statements


bn Dong Net sales from operations Cost of sales Gross profit Selling expenses General & administration expenses Net operating profit Other profit/(loss) - net Other income Other expenses Profit from operations Finance cost Profit before tax Corporate income tax Profit after tax 1998 1999 2000 2001 2002 2003 2004

13472.73 14121.58 16510.35 19209.71 23565.52 30245.65 34530.17 (10913.54) (10929.89) (13574.15) (15958.78) (19068.00) (21886.66) (26452.00) 2559.19 3191.69 2936.21 3250.93 4497.53 8359.00 8078.17 (204.96) (253.99) (335.70) (405.11) (476.77) (655.35) (747.66) (577.58) (644.50) (673.53) (904.70) (1092.02) (1302.31) (1501.40) 1776.65 2293.19 1926.97 1941.12 2928.73 6401.33 5829.11 (217.94) (559.90) 271.03 552.84 580.48 729.20 892.30 (800.81) (366.22) (378.75) (4249.70) (1780.60) 1558.72 1733.30 1397.20 2127.74 3130.46 2880.83 4940.80 (587.28) (782.64) (1032.42) (1312.99) 1558.72 1733.30 1397.20 1540.46 2347.82 1848.41 3627.81 (535.14) (644.83) (514.48) (541.46) (676.30) (19.92) (296.49) 1023.58 1088.46 882.72 999.01 1671.53 1828.49 3331.33

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Cash Flow Statement


bn VND 1998 1999 2000 2000 (Restated) 1397.20 4462.05 550.40 (2.27) 153.69 30.05 (10.45) 6580.67 1310.95 (24.13) 9.95 913.91 (292.18) (547.81) (640.09) 730.59 7311.25 2001 2002 2003 2004

Cash flows from operating activities


Profit before tax Adjustment for Depreciation Interest expense Gain from sale of fixed assets Loss on foreign exchange Allowance for slow stock etc Allowance for bad debts Sub total (Increase)/decrease in receivables Increase/(decrease) in inventories Deacrease/(increase) in other current assets Increase/(decrease) in payables Increase/(decrease) in other currrent liabilities Increase in non current assets Interest paid Corportation income tax paid Sub total Net cash flow from operating activities 1558.72 3121.71 365.27 (1.23) 100.87 55.72 (6.30) 5194.76 5122.33 (931.15) (202.77) (10892.48) (110.10) (317.78) (670.89) (8002.84) (2808.07) 1733.30 3988.50 405.86 (4.00) 520.69 41.93 33.47 6719.74 1514.35 (1212.99) 195.69 (287.34) (82.17) (353.09) (611.46) (837.01) 5882.73 1397.20 4462.05 550.40 (2.27) 153.69 30.05 (10.45) 6580.67 1310.95 (298.99) 9.95 947.81 208.88 (547.81) (640.09) 990.70 7571.37 1540.46 5134.51 587.28 6.51 245.90 (90.93) (11.28) 7412.45 (34.93) (265.73) (166.42) 1258.22 (207.00) (577.65) (678.99) (672.50) 6739.94 2347.82 7056.00 782.64 (8.68) 313.59 (34.90) 32.81 10489.28 (1375.27) (600.16) 161.83 1342.06 (170.72) (769.86) (664.04) (2076.16) 8413.12 2880.82 8375.51 (3.22) 3087.96 (1.82) (0.10) 14339.15 (1643.30) (875.45) (22.62) 844.18 (7.98) (1015.50) (714.65) (3435.32) 10903.83 4940.80 8084.73 (28.58) 1500.43 (10.51) (18.37) 14468.49 (1628.35) (1068.13) (67.28) 1004.39 (138.29) (1282.54) (633.94) (3814.13) 10654.35

Cash flow from investing activities


Acquisition of fixed assets Increase in investment accounts Proceeds from disposal of fixed assets Disbursement for construction in progress Purchase of other non-current assets Net cash flow from investing activities (1716.46) 449.46 (3263.76) (9.02) (4539.78) (4898.14) 379.80 (7068.50) (79.34) (11666.17) (9601.60) 172.91 (4510.67) (17.33) (13956.68) (13869.47) 172.91 (9218.51) 11.89 (9930.01) 14.575 (13347.61) (192.67) 18.24 (16298.00) 24.29 41.52

(13696.56)

(9206.62)

(9915.43)

(13522.03)

(16232.18)

Cash flow from financing activities


Loans obtained* Repayment of loans* Capital injections Other increase in funds + undisbursed profit Capital asset reduction+ to State budget Disbursement of funds for intended use Disbursement of profit Interest payment Net cash flow from financing activities 7295.61 1822.60 (1118.02) (610.28) (381.45) 7008.46 7092.63 (890.96) 3154.93 (1724.81) (318.26) (309.04) 7004.49 8865.79 (1486.12) 2568.24 23.26 (1835.40) (1.13) (362.28) 7772.37 8865.79 (1486.12) 2568.24 23.26 (1835.40) (1.13) (362.28) 7772.37 6131.63 (3224.29) 568.28 0.44 (49.83) 6507.86 (2040.83) 281.31 (107.44) 6336.86 (1687.24) 110.16 (79.10) 8184.73 (3190.02) 80.78 (120.74)

3426.23

4640.90

4680.70

4954.75

Net increase/decrease in cash


Cash at start of year Cash at end of year

(339.39)
4424.82 4.00

1221.05
4.00 5306.47

1387.05
5306.47 6693.53

1387.06
5306.47 6693.53

959.56
6693.53 7653.08

3138.59
7653.08 10791.67

2062.49
10791.67 12855.32

(623.08)
12855.32 12232.24

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Annex 2

DETAILS OF EVNS BUSINESS MODEL

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Outline
The model is build up from a number of small models of individual entities as follows: Large Power companies - PC Dong Noi, PC Hoa Duong, PC HCMC, PC Hanoi, PC Hai Phong, PC Ninh Binh. Small Power Companies - 58 provincial level PCs that are planned to be equitised 25 in region formerly covered by PC1, 20 in region formerly covered by PC2 region, and13 in region formerly covered by PC 3. (PC1, PC2, PC3 are referred to as parent PC). Note that there is no specific modelling of PC1, PC2 or PC3. EVN Power Plants each of the existing and planned 87 EVN power plant is modelled separately. These include those that are never to be equitised (Hoa Binh, Tri An, Yaly, collectively referred to as the 3 HPPs), new or existing plants that might be equitised, and JVs where EVN will be the major shareholder (referred to as EVN JV Power Plants). Non-core activities. EVN Telecom, Thu Duc Manufacturing Co, Equipment Manufacturing Co and Consulting (PECC1, PECC2, PECC3, PECC4 combined) are each modelled separately. Transmission Entity Combination of the existing four power transmission entities.

Each of the above entities initially modelled as a stand-alone separate entity, in which EVN initially holds all of the shares. This is not meant to represent the actual legal structure of each entity, but rather it is a convenient and realistic way of modelling each entity in a similar way (developing a separate model for each of the above 166 entities would be impossible). These entities are then successively aggregated as shown in diagram and at each aggregation inter entity transfers are eliminated. All profit attributed to EVN as a shareholder of the modelled entity is assumed to remain as retained profit. EVN JV Power Plants, where EVN is the majority shareholder are modelled as if they are an EVN entity that is to be equitised in 2005, with the % to be equitised being equal to the nonEVN shareholding1. Other JVs, where EVN is the minority shareholder, are not specifically modelled, but EVNs shareholding and share of its profits are incorporated in the consolidated results. In the remaining part of this documentation, unless otherwise clarified, Other JV refers to a power plant in which EVN is the minority shareholder. Each entity is modelled on its own worksheet, and these are then aggregated as follows: Power Companies sum of results of all 64 PCs (no consolidation) Main EVN PP sum of results of all Main EVN PP plus EVN JVs (no consolidation) 3 HPPs sum of results of Hoa Binh, Tri An and Yaly (no consolidation) Non-core Business aggregate of EVN Telecom, Thu Duc Manufacturing Co, Equipment Manufacturing Co and Consulting (PECC1, PECC2, PECC3, PECC4 combined) (no consolidation) Note that Transmission still remains a separate entity at this stage.

From a modelling point of view this is fine for JVs where EVN will hold the majority of shares, since these assets will appear on EVNs consolidated balance sheet and the partners shares will be a minority interest. In the case of JVs where EVN is the minority shareholder, a different approach is required since here the assets should NOT appear on EVNs balance sheet, but EVNs share of the profit from these JVs will appear in the P&L as share of profit from other sources.

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Single Buyer consolidation of results from Transmission, 3 HPPs and the inclusion of power purchases from Other JVs, IPPs and imports. Core Business consolidation of results from Single Buyer, Power Companies and Main EVN PP. EVN Consolidated consolidation of Core Business and Non-core Business. It is at this stage that the equitisation proceeds, GoV capital injections, EVNs contribution to, and its share of profit from, Other JVs are included.

The generation schedule is in terms of output from units, and Power stations can be composed of a number of specified units (eg Units Uong Bong 1 & 2 are combined to form one entity). The following diagram illustrates the relationship between the entities and their aggregation and consolidation.
Existing EVN PP New EVN PP

Main EVN PP

EVN JVs

Yaly Core Business Tri An 3 HPPs Single Buyer Hoa Binh EVN Consolidated

Transmission 6 Large PCs 58 Small PCs EVN Telecomm Thu Duc Co Total Non-core Equip Man Co 4 PECCS

Power companies

Energy Balance
The starting point for estimating future demand is energy balances prepared by IoE. Unfortunately these do not go into the necessary detail and so some extrapolation is necessary Three sets of data are used:

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Estimates of regional (North, Central and South) sales by main category, losses, selfconsumption and total generation for 2005, 2010 and 2015. Actual sales in each of the 64 PCs in 2005. Annual gross production in each year 2006-2012 given in the generation schedule.

It is assumed that these are all internally consistent and that there is no unsatisfied demand; in particular the expected generation in years for which there are no sales forecasts is just sufficient to cover demand in those years, once losses etc have been taken into account. Estimate sales (and losses) (by category and by region) in intermediate years by assuming constant growth. Apply respective regional annual growth rates for each customer category to the actual 2005 sales for each customer category in each PC. Estimate distribution losses for each PC (based on specified distribution loss for each PC). Add distribution losses to total sales to give total requirement for each PC. Add transmission losses to distribution requirement (based on loss % given in IoE energy balance). Add self consumption (either global figure given in IoE balance or calculated from plant specific self consumption data). This gives the gross generation requirements. Pro rata all data (sales, losses, self consumption) to match output in generation schedule.

Capital Expenditure
The model divides EVNs existing and future assets into different categories to reflect the different characteristics (from financial modelling point of view) of these assets HV transmission LV distribution Thermal power plants (TPP) Hydro power plants (HPP) EVN Telecom Other Non-core entities

In some cases these are further split as follows: HV transmission - 500 kV, 220 kV and 110 kV LV distribution - LV distribution networks and LV rural electrification. Other Non-core entities investments in Thu Duc Co, Equipment Manufacturing Co, Consulting

Capital expenditure is funded by four possible sources: USD loans, VND loans, capital injections into EVN, and EVNs own resources. The calculation of loan repayments and interest payments are modelled in a conventional way. The difference between the capital expenditure and the total amount borrowed in loans in a particular year is assumed to be a capital injection into the relevant entity by EVN ie EVNs own contribution plus any capital (ie GoV) injection into EVN is assumed to be an EVN injection into the modelled entity, and appears as additional equity for that entity.

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Equitisation
The equitisation of an entity is modelled as follows: Assume x% (which is <50%) is to be equitised in year N. Then at the end of year N, x% of the total equity in the entity (ie sum of EVN equity, retained profits, other funds, revaluation fund) is split (1-x%) to EVN, and x% to other shareholders, and the retained profits, other finds, revaluation fund set to zero. In this (and subsequent year), y% of profits after tax is distributed as dividends to shareholders (and shown in P&L statement), and the remaining profit retained by the entity as retained profits. Dividends to non-EVN Shareholders are assumed to be paid in cash, whereas the dividend to EVN is assumed to remain within EVN at the consolidation level After equitisation, further capital injections to finance the CAPEX program are assumed to be split between EVN and the new shareholders. This reallocation of equity in the year of equitisation can be difficult to see in the model because other adjustments are made at the same time, so the following illustrates what occurs.
Adjustments Capital injections (To finance CAPEX) Allocation of retained profits Balance at end of Year N-1 Balance at end of year N 540.0 360.0 900.0 50.0 0.0 0.0 950.0

Equity
EVN Equity
bn VND bn VND bn VND bn VND bn VND bn VND bn VND

Other shareholders
Total share capital Retained profits Other funds Revaluation reserve

Total equity

500.0 0.0 500.0 100.0 100.0 100.0 800.0

Re allocation of equity due to equitisation 480.0 320.0 800.0 0.0 0.0 0.0 800.0

+60.0 +40.0 +100.0

0.0 50.0

100.0

50.0

The first column shows the equity part of the balance sheet at the end of year N-1. The second column shows the result of equitising 40% of the entity in year N (EVN retains 60% of total equity, new shareholders obtain 40%). The third column shows new capital injections required under the financing assumptions to finance CAPEX in year N. Total injection of 100 bn VND is required in this example. The fourth column shows the allocation of retained profit (the dividend payments have already been deducted from then profit in the P&L statement) The fifth column shows the resulting equity part of the balance sheet at the end of Year N. The proceeds from equitisation are incorporated in the EVN consolidated financial statements, not in the entitys financial statement.

Rates of Exchange and Inflation


The model works primarily in VND, but some costs are expressed in USD and it is necessary to convert these into appropriate VND. There are 3 factors at work USD inflation the change prices expressed in USD due to USD inflation

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VND inflation - the change in prices expressed in VND due to VND inflation VND/USD exchange rate this can either mirror changes in USD and VND inflation or there might be a real change in the exchange rate (ie a change that can not be accounted for purely in terms of changes in USD and VND inflation rates. At present it is assumed there is no real change in exchange rates Exchange rate in year i (RoEi ) = RoEi-1 * (1+real change in exchange rate in year i)*(1+USD inflation in year i)/(1+VND inflation in year i). This is used to convert USD costs to VND in year i

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Financial Statements (Individual Entities)


The following tables summarise the way the P&L and balance sheets for each type of entity are complied. Items highlighted in bold italic font are parameters than can be changed (see later) Profit & Loss Power companies Existing power plants New power plants Transmission Non Core Main Income Other income O&M Tariff * sales % of main income 2004 actual % of Gross asset value Selling price to Single buyer * net output Zero 2004 actual % of Gross asset value Selling price to Single buyer * net output Zero HPP - 0.67% of gross asset value TPP 2.5% of Gross asset value Zero Zero N/a Assumed to equal total costs Zero 1.5% of gross asset value Annual increase in sales 2004 actual % of main income EVN Telecom - 20% annual increase Other 8% annual increase 2004 actual % of total sales 2004 actual % of total sales N/a

Selling costs Admin costs Power purchase

2004 actual % of total sales 2004 actual % of total sales Bulk supply tariff * total requirement N/a

Zero Zero N/a

Zero Zero Transmission losses * average cost of bulk electricity N/a

Fuel costs

HPP n/a TPP gross output * fuel burn (units/GWH) * unit fuel price HPP Gross output * hydropower tax TPP n/a

N/a

Hydro tax Depreciation

N/a % of gross asset value

N/a

N/a

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Profit & Loss Foreign exchange losses /gains Interest Corporate tax Dividends

Power companies

Existing power plants

New power plants

Transmission

Non Core

Increase/decrease in closing value of USD loans (both new and existing) at year end

Calculated on average of opening and closing balances of for new loans+ actual values for existing loans % of gross profit For equitised entities, profit after tax * % Equitised, otherwise zero N/a N/a

Balance sheet Cash Receivables from outside EVN

Power companies

Existing power plants

New power plants

Transmission

Non Core

Calculated from cash flow statement Total sales * delay in non-EVN customers paying N/a N/a N/a N/a Total sales from nonEVN sources* delay in non-EVN customers paying Total sales from EVN sources * delay in paying for bulk power2

Receivables from inside EVN Inventories Other current assets Fixed assets

Total sales * delay in paying for bulk power

% of gross asset value 2004 value (ie no change) Gross asset value accumulated depreciation

Note these do not appear as payables within EVN on other entities balance sheets.

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Balance sheet CIP

Power companies New CAPEX + any IDC is recorded under CIP for duration of construction period, then transferred to Fixed Assets 2004 value (ie no change) 2004 value (ie no change) (O&M + selling + admin costs) * delay in paying other costs Power purchase costs * delay in paying for bulk power 2004 value (ie no change)

Existing power plants New CAPEX + any IDC is recorded under CIP until completion of construction, then transferred to Fixed assets

New power plants New CAPEX + any IDC is recorded under CIP until completion of construction, then transferred to Fixed assets

Transmission New CAPEX + any IDC is recorded under CIP for duration of construction period, then transferred to Fixed assets

Non Core New CAPEX + any IDC is recorded under CIP for duration of construction period, then transferred to Fixed assets

Construction materials Other non current assets Payables outside EVN

HPP - (O&M + hydro tax) * delay in paying other costs TPP (O&M * delay in paying other costs) + (fuel cost * delay ion paying fuel costs) N/a

O&M * delay in paying other costs

(O&M + selling + admin costs) * delay in paying other costs N/a

Payables inside EVN Short term Loans Current portion of LT loans LT Loans Other Lt Liabilities EVN Share capital Other share capital

Power purchase costs * delay in paying for bulk power

For year N, calculate repayments for Year N+1 Total loans (new existing, USD, VND) - Current portion of LT loans 2004 value (ie no change) EVNs assumed share capital in entity, plus any EVN capital injections for CAPEX minus any shares sold under equitisation process Equitised shares plus any proportion of capital injection from new shareholders to finance CAPEX

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Balance sheet Retained profits Other reserves Revaluation reserve 2004 balance sheet data

Power companies Profit from P&L 2004 value (ie no change) 2004 value (ie no change) For large PCs the appropriate balance sheet data for 2004. The 2004 balance sheets for PC1, PC2 and PC3 are adjusted for the transferred of 110 kV assets to transmission (see later)3 For small PCs, either balance sheet data for 2004 prepared for equitisation process, or pro rated from adjusted balance sheet for parent PC

Existing power plants

New power plants

Transmission

Non Core

2004 balance sheets. Payables to EVN are adjusted to match known loans. 2004 Balance sheet data for some small power plants (3 diesel plants, Can Tho, Dray Hling, Na Loi, Nam Mu, Ry Ninh, Srok Phu Mieng, Suoi Sap, Suoi Vang, Thu Duc) is not yet available and so these are included in transmission

Zero

Residual of 2004 consolidated balance sheet is assigned to Transmission. That is balance sheet items that can not be allocated either to a large PCs, PC1, PC2 or PC3, an existing power plant , EVN Telecom, Thu Duc Manufacturing Co, Equipment Manufacturing Co PECC1, PECC2, PECC3, or PECC4 is included in transmission4.

As per appropriate 2004 balance sheets

3 Note there is an inconsistency here. For PC1, PC2 and PC3 110 kV assets are transferred to transmission, but remain on balance sheets of Large PCs. However the model assumes all new CAPEX in 110 kV is in transmission and not split between large PCs and transmission 4 Note that the balance sheet data for power plants for which not individual balance sheet data has been provided are included here eg balance sheet data for list of plants given in existing power plant s column will appear in transmission.

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Financial Statements (Consolidated Entities)


Profit & Loss Main Income Other income Power purchases O&M Selling costs Admin costs Fuel costs Hydro tax Depreciation Foreign exchange losses /gains Interest Profit from JVs Transmission + 3 HPPs Transmission + 3 HPPs Single Buyer Sales of bulk power to PCs None Power purchases from Other JVs, IPPs and imports O & M costs of Transmission + 3 HPPs % of total income Transmission + 3 HPPs N/a Core business Power Company Power Company Single Buyer O&M costs of Power Companies, Main EVN PP, Single Buyer Power Companies + Single Buyer Power Companies + Single Buyer Main EVN PP Single Buyer + Main EVN PP Power Companies + Main EVN PP + Single Buyer Power Companies + Main EVN PP + Single Buyer Power Companies + Main EVN PP + Single Buyer N/a EVN Consolidated Core business + non core business Core business + non core business Core business Core business + non core business Core business + non core business Core business + non core business Core business Core business Core business + non core business Core business + non core business

Transmission + 3 HPPs N/a

Core business + non core business Total cost of Other JV *EVNs share of Investment in Other JV * EVNs expected return

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Profit & Loss Corporate tax Dividends

Single Buyer % of profit N/a

Core business % of profit Power Companies + Main EVN PP

EVN Consolidated % of profit Power Companies + Main EVN PP

Balance sheet Cash Receivables from outside EVN Receivables from inside EVN Inventories Other current assets Fixed assets CIP Construction materials Other non current assets

Single Buyer Calculated from cash flow % of sales

Core business

EVN Consolidated

None Transmission + 3 HPPs Transmission + 3 HPPs Transmission + 3 HPPs Transmission + 3 HPPs Transmission + 3 HPPs Transmission + 3 HPPs Power companies + Main EVN PP + Single Buyer Power companies + Main EVN PP + Single Buyer Power companies + Main EVN PP + Single Buyer Power companies + Main EVN PP + Single Buyer Power companies + Main EVN PP + Single Buyer Power companies + Main EVN PP + Single Buyer

None Core Business + Non Core Business Core Business + Non Core Business Core Business + Non Core Business Core Business + Non Core Business Core Business + Non Core Business Core Business + Non Core Business

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Balance sheet Payables outside EVN Payables inside EVN Short term Loans Current portion of LT loans LT Loans Other LT Liabilities EVN Share capital Other share capital Retained profits Other reserves Revaluation reserve

Single Buyer

Core business

EVN Consolidated

None Transmission + 3 HPPs Transmission + 3 HPPs Transmission + 3 HPPs Transmission + 3 HPPs Transmission + 3 HPPs Transmission + 3 HPPs From P&L Transmission + 3 HPPs Transmission + 3 HPPs Power companies + Main EVN PP + Single Buyer Power companies + Main EVN PP + Single Buyer Power companies + Main EVN PP + Single Buyer Power companies + Main EVN PP + Single Buyer Power companies + Main EVN PP + Single Buyer Power companies + Main EVN PP + Single Buyer From P&L Power companies + Main EVN PP + Single Buyer Power companies + Main EVN PP + Single Buyer

None Core Business + Non Core Business Core Business + Non Core Business Core Business + Non Core Business Core Business + Non Core Business Core Business + Non Core Business Core Business + Non Core Business From P&L Core Business + Non Core Business Core Business + Non Core Business

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Balance sheet 2004 balance sheet data

Single Buyer Transmission + Hoa Binh + Tri An + Yaly balance sheet data

Core business EVN Consolidated accounts balance sheet data for EVN Telecom, Thu Duc Manufacturing Co, Equipment manufacturing Co, PECC1, PECC2, PECC3, PECC4

EVN Consolidated EVN 2004 Consolidated accounts

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Annex 3

DATA INPUT FOR EVNS BUSINESS MODEL

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Data Requirements in Work sheet BASE DATA


Worksheet Parameters
Item Description Comments Financing CAPEX - 500 kV, 220 kV, 110 kV transmission, LV distribution network, LV rural electrification program, HPP, TPP, EVN Telecom, other Non-core entities(Thu Duc, Equipment Manufacturing Co, Consulting ) % of total expenditure % of total CAPEX for a particular Remaining % of CAPEX is assumed to be in local currency investment payable in USD Financing Source of money to fund CAPEX Remaining % of CAPEX Is assumed to be financed from EVN internal sources. % by foreign (USD) loans Capital injections into EVN by GoV only appear in EVN consolidated % by local (VND) loans statement. Elsewhere they are included in EVNs contribution % by equity injections into EVN Interest rate Interest rate for local and foreign loans Capitalise IDC? = Yes capitalise IDC. For HPP and TPP, IDC is capitalised over the whole construction = No - Do not capitalise IDC (ie period of the plant assume IDC is included in P&L) For HV and LV lines, IDC is capitalised over the Construction Period for those lines Construction Period Period over which IDC on HV and Only applies to CAPEX on HV and LV lines and CAPEX in non-core LV lines is capitalised. entities. Construction period for new power plants is calculated from CAPEX data. Depreciation HV transmission (500 kV, 220 kV, 110 kV), LV distribution (includes rural electrification), HPP, TPP, EVN Telecom, Non-core Depreciation Depreciation period in years for Depreciation is calculated as a % of gross fixed assets at start of different categories of fixed asset year for each category of asset. O & M costs HV transmission (500 kV, 220 kV, 110 kV), LV distribution (includes rural electrification), HPP, TPP O & M costs O & M cost (expressed as a % of O & M cost is calculated as a % of adjusted fixed assets for each asset value) category of asset. Financial information Real change in VND/USD Real change in USD/VND rate Exchange rate over and above changes due to inflation

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Item VND Inflation

Description Annual inflation rate of VND prices

USD Inflation Exchange rate Tariffs End user tariffs

Annual inflation rate of USD prices Actual exchange rate in 2005 and 2006 Expected average end user tariff in each year for each main consumer category (excluding VAT) Hydro tax payable on output from HPPS (2006 value in VND/kWh) % losses for each large PC in each year Amount of stocks of materials etc held by each entity Average period (in months) for non-EVN customers to pay Average delay in EVN power stations paying for fuel Average delay in paying for all other cash operating costs (O&M, Hydro tax) Delay in inter entity payments within EVN Profits tax rate Expected rate of return on investments

Comments Only directly used to inflate VND component of CAPEX and to calculate exchange rate. At present it is also used to index other user defined data (Hydro tax, end user tariffs, bulk supply tariff) Only directly used to inflate USD component of CAPEX and calculate future exchange rates. Used to seed exchange rate calculation. Assumes all USD costs are in 2005 USD terms At present it is index linked to VND inflation, but this can be removed by entering specific values

Other parameters Hydro tax Losses

Stocks Delay in non EVN customers paying Delay in paying fuel Delay in paying other costs

At present it is index linked to VND inflation, but this can be removed by entering specific values Losses expressed as a % of total supply to each PC (ie if total supply is 100 units, and losses are 5 units, then losses are 5/100 =5%, (and NOT 5/95=5.26%). Expressed as a % of total asset value. Used to calculate inventory line in balance sheet Used to calculate receivables for Power Companies and non-core entities Used to calculate payables for power plants. Used to calculate payables for all entities.

Delay in paying for bulk power Tax rate Rate of return

Delay in inter EVN payments (primarily bulk power, but also payments from core to non-core entities) All profits are taxed at this rate. Used to calculate selling price of electricity for each power plant, to give this return on gross asset value, and the bulk supply tariff for PCs, assuming this return on assets.

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Item Power market costs

EVN Telecom annual sales/cost increase Non Core annual sales/cost increase % of sales from inside EVN Use specified plant specific self consumption data?

Description Cost of operating power market (as a % of total power market sales) Annual increase in sales and operating costs of EVN Telecom Annual increase in sales and operating costs of non-core entities % of sales for each non-core entity from other EVN entities Determines whether to apply average self consumption data to all generation sources, or use plant specific ones

Comments Cost to single buyer entity

Used to calculate EVN Telecoms income and costs Used to calculate income and costs of non-core entities

Used to calculate consolidated income and costs by eliminating inter company payments between core and non-core entities. Yes = use plant specific ones (self consumption data should be entered for all sources in worksheet power station data). The calculated self consumption is then used in energy balance (see worksheet actual demand) No = Use average self consumption data specified in energy balance (note output from imports and other non EVN source will be reduced)

Worksheet PC Data
Item 2005 sales data for each PC Description Sales in GWh by major customer group Comments This data is the starting point for sales forecasts

Worksheet - DISCOM Equitisation


This contains the data on planned equitisation of each PC. For each of the 58 PCs that is planned to be equitised enter (if known) Planned equitisation data % to be equitised Simplified balance sheet information (AS AT 31/12/2005) (Note a value for all items must be entered ie do not leave any cell blank; instead enter 0.0).

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Planned capital expenditure data in each future year (Split by LV distribution network and LV rural electrification)

If the data of planned equitisation is unknown, enter a date after 2012 If balance sheet data is unknown or unavailable leave all balance sheet items blank The model calculate averages 2004 balance sheet data for any PC where actual 2004 balance sheet data for that PC is not available or specified as follows: The starting point is the adjusted balance sheet for PC1, PC2 and PC3; Actual balance sheets adjusted for removal of 110 KV assets, which are assumed to be transferred to Transmission see 110 kV adjust work sheet Subtract the known balance sheet information from the relevant parent PC balance sheet. Allocate the remaining balance sheet items for PC1, PC2 and PC3 equally (not on any pro rata basis but just by dividing the remainder by the number of PCs for which there is no balance sheet information) among the remaining PCs that formed PC1, PC2 and PC3 respectively Capital expenditure A similar procedure is used to estimate the future CAPEX of each PC based on the total CAPEX for PC1, PC2 and PC3 Notes. (1) Only enter 31/12/04 balance sheet data for each PC here. If later balance sheet data for a particular PC becomes available, then you need to enter this in the relevant work sheet in the work book power Companies (2) Rows 6 to 69 store actual balance sheet data and CAPEX. Rows 101 to 158 is where the data that is transferred to the model is calculated. Check balance sheets balance by looking down column AE for red cells (any red cells in rows 101-158 are almost certainly the result of leaving one or more balance sheet item blank instead of entering 0.0) (3) There are some small errors in the balance sheet data provided by EVN for some equitised PCs and small adjustments have been made to some data to get it to balance

Worksheet Bulk Supply Tariffs


Item Bulk supply tariff f Description Price (in VND/kWh) that each PC purchases its bulk electricity from single buyer Comments At present it is index linked to VND inflation, but this can be removed by entering specific values.

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Worksheet CAPEX
Item HV Lines Description Expected total capital expenditure (in M USD) on 500 kV, 220 kV and 110 kV Expected total capital expenditure (in M USD) on LV distribution network and LV rural electrification Either enter % of total LV distribution CAPEX attributable to each PC, or specific CAPEX for each large PC , PC1, PC2 and PC3 Expected total CAPEX for each non-core entity Comments CAPEX estimates should exclude IDC and be in 2005 USD terms. All 110 kV CAPEX is assigned to HV transmission. CAPEX estimates should exclude IDC and be in 2005 USD terms. This data is not required if specific estimates are available for individual PCs CAPEX estimates should exclude IDC and be in 2005 USD terms. CAPEX data for equitised PCs is entered in worksheet Discom equitisation

LV Lines

Large PCs and PC1, PC2 and PC3

Other entities

CAPEX estimates should exclude IDC and be in 2005 USD terms.

Worksheet Sensitivities
Item Sensitivity Description Select appropriate sensitivity Comments 1- Base case 2- 10% reduction in end user demand 3- 1 year delay in completing new power plants due to come on stream after 2008 (note that phasing of capital expenditure on these delayed power plants is the same as the base case, as is phasing of expenditure on HV and LV lines) 4- Output from HPPS reduced in years 200x, 200y, 200z by 20% Note: Scenario 2, 3 and 4 are currently not available due absence of appropriate generation schedule

Worksheet 110 kV Adjust This worksheet adjusts the 2004 balance sheets for PC1, PC2 and PC3 by removing 110 kV assets and transferring them to transmission

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Item 110 kV assets

Description Gross value of 110 kV assets on 2005 balance sheet (in bn VND) Simplified balance sheet data for PC1, PC2 and PC3 as at 31/12/04 Enter changes to balance sheet required to remove 110 kV Asset

Comments At present estimated from length of line (km) and number of transformers (data obtained from EVN annual report) and estimated unit cost of new assets).

PC1, PC2, PC3 Balance sheets (2004) 110 kV adjust

Transmission balance sheet (2004)

Simplified balance sheet for transmission as at 31/12/2004

In the absence of actual data, the following is assumed Adjustment to Gross value : as calculated in 110 kV assets Adjustment to depreciation: pro rata to balance sheet value It is assumed these 110 kV assets were financed by LT loans and equity, which are reduced pro rata. Adjustments to PC1, PC2 and PC3 balance sheets added to transmission balance sheet Note: existing 110 kV assets for Large PCs are not added to transmission, but new 110 kV assets in these regions are assigned to transmission

Worksheet Generation Scenarios This worksheet contains the generation schedule for each scenario
Item Total generated volume Description Planed gross output (GWh) from each power plant, JV, IPP and imports in each year for each scenario Comments Data to be provided by IoE for scenarios 2, 3 and 4 Gross output (before self consumption and own use) Do not change order of power plants

Worksheet Power Station Equitisation


Item Equitisation date % Description Year in which the power station is planned to be equitised % of equity to be equitised Comments Include JVs where EVN is the majority shareholder here with an equitisation date of 2005.

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Worksheet Power Station Data


Item Location Type of enterprise Description Region where power plant is located Identify type of enterprise Comments For information only not required EVN 1 only use for Hoa Binh, Tri An and Yaly. (ie plants that are never to be equitised and consolidated with transmission in single buyer entity EVN 2 - include all other EVN plants including JVs where EVN will be the major shareholder JVs EVN JV plants where EVN will be a minority shareholder IPPs - Other power plants in which EVN has no financial interest Imports imports for neighbouring countries Each Power Plant must be categorised Only select one type for each plant If a power plant has been wrongly categorised, then please contact either Pham Ngoc Thang or Bill Pemberton before making any changes here Only select one type for each plant If an EVN power plant has been wrongly categorised, then please contact either Pham Ngoc Thang or Bill Pemberton before making any changes here Must be consistent with type of plant (eg if type of plant is gas, then enter gas burn; DONOT also enter the fuel burn for reserve fuel) Only enter data for EVN plants Different sources of coal and gas can have different prices Make sure Use specified plant specific self consumption data? switch on parameter worksheet is set to yes if data is entered. Self consumption data (including zero if necessary) should either be entered for all sources, or non entered and average self consumption used instead. Using average self consumption data specified in energy balance applies to all sources (including imports and other non-EVN sources) Determines income of each power plant 2005 USD prices

Type of plant

Enter 1 in appropriate column

Fuel burn

Fuel consumption to generate 1 GWh of electricity

Self consumption data

% of gross output required for self consumption

Bulk electricity selling price

Price (USD/kWh) obtained by selling electricity to singe buyer

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Item Capital expenditure

Description Planned capital expenditure in each year for each source

Comments Exclude IDC In 2005 USD terms Data only required for EVN power plants

Worksheet Fuel Costs


Item Fuel costs Description Expected price of each type of fuel in future years. Comments Expressed in 2005 USD terms Fuel categories correspond to those in work sheet power station data Note: Gas price is price per 000 m3.

Worksheet Joint Ventures


Enter data here for JVs where EVN is the minority shareholder. Item Description Name Name of JV EVNs % contribution % of total capital supplied by EVN Expected return EVNs expected annual return on its investment Start production The year the JV is expected to start production Total cost Total cost of JV in each year Comments

Determines when EVN starts receiving income from the JV Include all pre 2004 capital expenditure in 2004 column

Worksheet Base Regional Demand


Base regional demand data forecasts used to calculate future demand for each PC.

Worksheet Actual Demand


Calculates actual demand for each customer category in each year for each PC, taking into account available generation.

Worksheet Exist Foreign Loans


Details of all existing foreign loans converted to USD (as at 01/01/05). Data obtained from former ICM module, and each loan allocated to one or more modelled entities. Data included outstanding loan, future loan repayments, future interest payments and IDC

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Worksheet Exist VND Loans


Details of all existing VND loans (as at 01/01/05). VND. Data obtained from former ICM module, and each loan allocated to one or more modelled entities. Data included outstanding loan, future loan repayments, future interest payments and IDC

Worksheet 2004 Accounts


Breakdown of EVNs 2004 financial statements

Worksheet EVN Telecom


Financial statements for EVN telecom entity

Worksheet Thu Duc


Financial statements for Thu Duc Manufacturing Co entity

Worksheet Equip Man Co


Financial statements for Equipment Manufacturing Co entity

Worksheet Consulting
Financial statements for Consulting entity.

Worksheet Transmission
Financial statements for Transmission entity.

Worksheet Power Companies


Summary financial statements for all 64 Power Companies combined.

Worksheet Main EVN PP


Summary financial statements for all EVN owned Power Plants except the 3 HPPs combined.

Worksheet 3 HPPS
Summary financial statements for Hoa Binh, Tri An and Yaly combined

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Worksheet Single Buyer


Financial statements for the Single Buyer Entity

Worksheet Core Business


Summary financial statements for the Core Business entity

Worksheet Total Non-core


Summary financial statements for EVN Telecom, Thu Duc Manufacturing Co, Equipment Manufacturing Co and Consulting (PECC1, PECC2, PECC3, PECC4 combined) combined.

Worksheet EVN Consolidated


Summary financial statements for the whole of EVN.

Worksheet Summary
Summary of key operating parameters of EVN Consolidated

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Annex 3

DATA INPUT FOR EVNS BUSINESS MODEL

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Data Requirements in Work sheet BASE DATA


Worksheet Parameters
Item Description Comments Financing CAPEX - 500 kV, 220 kV, 110 kV transmission, LV distribution network, LV rural electrification program, HPP, TPP, EVN Telecom, other Non-core entities(Thu Duc, Equipment Manufacturing Co, Consulting ) % of total expenditure % of total CAPEX for a particular Remaining % of CAPEX is assumed to be in local currency investment payable in USD Financing Source of money to fund CAPEX Remaining % of CAPEX Is assumed to be financed from EVN internal sources. % by foreign (USD) loans Capital injections into EVN by GoV only appear in EVN consolidated % by local (VND) loans statement. Elsewhere they are included in EVNs contribution % by equity injections into EVN Interest rate Interest rate for local and foreign loans Capitalise IDC? = Yes capitalise IDC. For HPP and TPP, IDC is capitalised over the whole construction = No - Do not capitalise IDC (ie period of the plant assume IDC is included in P&L) For HV and LV lines, IDC is capitalised over the Construction Period for those lines Construction Period Period over which IDC on HV and Only applies to CAPEX on HV and LV lines and CAPEX in non-core LV lines is capitalised. entities. Construction period for new power plants is calculated from CAPEX data. Depreciation HV transmission (500 kV, 220 kV, 110 kV), LV distribution (includes rural electrification), HPP, TPP, EVN Telecom, Non-core Depreciation Depreciation period in years for Depreciation is calculated as a % of gross fixed assets at start of different categories of fixed asset year for each category of asset. O & M costs HV transmission (500 kV, 220 kV, 110 kV), LV distribution (includes rural electrification), HPP, TPP O & M costs O & M cost (expressed as a % of O & M cost is calculated as a % of adjusted fixed assets for each asset value) category of asset. Financial information Real change in VND/USD Real change in USD/VND rate Exchange rate over and above changes due to inflation

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Item VND Inflation

Description Annual inflation rate of VND prices

USD Inflation Exchange rate Tariffs End user tariffs

Annual inflation rate of USD prices Actual exchange rate in 2005 and 2006 Expected average end user tariff in each year for each main consumer category (excluding VAT) Hydro tax payable on output from HPPS (2006 value in VND/kWh) % losses for each large PC in each year Amount of stocks of materials etc held by each entity Average period (in months) for non-EVN customers to pay Average delay in EVN power stations paying for fuel Average delay in paying for all other cash operating costs (O&M, Hydro tax) Delay in inter entity payments within EVN Profits tax rate Expected rate of return on investments

Comments Only directly used to inflate VND component of CAPEX and to calculate exchange rate. At present it is also used to index other user defined data (Hydro tax, end user tariffs, bulk supply tariff) Only directly used to inflate USD component of CAPEX and calculate future exchange rates. Used to seed exchange rate calculation. Assumes all USD costs are in 2005 USD terms At present it is index linked to VND inflation, but this can be removed by entering specific values

Other parameters Hydro tax Losses

Stocks Delay in non EVN customers paying Delay in paying fuel Delay in paying other costs

At present it is index linked to VND inflation, but this can be removed by entering specific values Losses expressed as a % of total supply to each PC (ie if total supply is 100 units, and losses are 5 units, then losses are 5/100 =5%, (and NOT 5/95=5.26%). Expressed as a % of total asset value. Used to calculate inventory line in balance sheet Used to calculate receivables for Power Companies and non-core entities Used to calculate payables for power plants. Used to calculate payables for all entities.

Delay in paying for bulk power Tax rate Rate of return

Delay in inter EVN payments (primarily bulk power, but also payments from core to non-core entities) All profits are taxed at this rate. Used to calculate selling price of electricity for each power plant, to give this return on gross asset value, and the bulk supply tariff for PCs, assuming this return on assets.

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Item Power market costs

EVN Telecom annual sales/cost increase Non Core annual sales/cost increase % of sales from inside EVN Use specified plant specific self consumption data?

Description Cost of operating power market (as a % of total power market sales) Annual increase in sales and operating costs of EVN Telecom Annual increase in sales and operating costs of non-core entities % of sales for each non-core entity from other EVN entities Determines whether to apply average self consumption data to all generation sources, or use plant specific ones

Comments Cost to single buyer entity

Used to calculate EVN Telecoms income and costs Used to calculate income and costs of non-core entities

Used to calculate consolidated income and costs by eliminating inter company payments between core and non-core entities. Yes = use plant specific ones (self consumption data should be entered for all sources in worksheet power station data). The calculated self consumption is then used in energy balance (see worksheet actual demand) No = Use average self consumption data specified in energy balance (note output from imports and other non EVN source will be reduced)

Worksheet PC Data
Item 2005 sales data for each PC Description Sales in GWh by major customer group Comments This data is the starting point for sales forecasts

Worksheet - DISCOM Equitisation


This contains the data on planned equitisation of each PC. For each of the 58 PCs that is planned to be equitised enter (if known) Planned equitisation data % to be equitised Simplified balance sheet information (AS AT 31/12/2005) (Note a value for all items must be entered ie do not leave any cell blank; instead enter 0.0).

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Planned capital expenditure data in each future year (Split by LV distribution network and LV rural electrification)

If the data of planned equitisation is unknown, enter a date after 2012 If balance sheet data is unknown or unavailable leave all balance sheet items blank The model calculate averages 2004 balance sheet data for any PC where actual 2004 balance sheet data for that PC is not available or specified as follows: The starting point is the adjusted balance sheet for PC1, PC2 and PC3; Actual balance sheets adjusted for removal of 110 KV assets, which are assumed to be transferred to Transmission see 110 kV adjust work sheet Subtract the known balance sheet information from the relevant parent PC balance sheet. Allocate the remaining balance sheet items for PC1, PC2 and PC3 equally (not on any pro rata basis but just by dividing the remainder by the number of PCs for which there is no balance sheet information) among the remaining PCs that formed PC1, PC2 and PC3 respectively Capital expenditure A similar procedure is used to estimate the future CAPEX of each PC based on the total CAPEX for PC1, PC2 and PC3 Notes. (1) Only enter 31/12/04 balance sheet data for each PC here. If later balance sheet data for a particular PC becomes available, then you need to enter this in the relevant work sheet in the work book power Companies (2) Rows 6 to 69 store actual balance sheet data and CAPEX. Rows 101 to 158 is where the data that is transferred to the model is calculated. Check balance sheets balance by looking down column AE for red cells (any red cells in rows 101-158 are almost certainly the result of leaving one or more balance sheet item blank instead of entering 0.0) (3) There are some small errors in the balance sheet data provided by EVN for some equitised PCs and small adjustments have been made to some data to get it to balance

Worksheet Bulk Supply Tariffs


Item Bulk supply tariff f Description Price (in VND/kWh) that each PC purchases its bulk electricity from single buyer Comments At present it is index linked to VND inflation, but this can be removed by entering specific values.

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Worksheet CAPEX
Item HV Lines Description Expected total capital expenditure (in M USD) on 500 kV, 220 kV and 110 kV Expected total capital expenditure (in M USD) on LV distribution network and LV rural electrification Either enter % of total LV distribution CAPEX attributable to each PC, or specific CAPEX for each large PC , PC1, PC2 and PC3 Expected total CAPEX for each non-core entity Comments CAPEX estimates should exclude IDC and be in 2005 USD terms. All 110 kV CAPEX is assigned to HV transmission. CAPEX estimates should exclude IDC and be in 2005 USD terms. This data is not required if specific estimates are available for individual PCs CAPEX estimates should exclude IDC and be in 2005 USD terms. CAPEX data for equitised PCs is entered in worksheet Discom equitisation

LV Lines

Large PCs and PC1, PC2 and PC3

Other entities

CAPEX estimates should exclude IDC and be in 2005 USD terms.

Worksheet Sensitivities
Item Sensitivity Description Select appropriate sensitivity Comments 1- Base case 2- 10% reduction in end user demand 3- 1 year delay in completing new power plants due to come on stream after 2008 (note that phasing of capital expenditure on these delayed power plants is the same as the base case, as is phasing of expenditure on HV and LV lines) 4- Output from HPPS reduced in years 200x, 200y, 200z by 20% Note: Scenario 2, 3 and 4 are currently not available due absence of appropriate generation schedule

Worksheet 110 kV Adjust This worksheet adjusts the 2004 balance sheets for PC1, PC2 and PC3 by removing 110 kV assets and transferring them to transmission

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Item 110 kV assets

Description Gross value of 110 kV assets on 2005 balance sheet (in bn VND) Simplified balance sheet data for PC1, PC2 and PC3 as at 31/12/04 Enter changes to balance sheet required to remove 110 kV Asset

Comments At present estimated from length of line (km) and number of transformers (data obtained from EVN annual report) and estimated unit cost of new assets).

PC1, PC2, PC3 Balance sheets (2004) 110 kV adjust

Transmission balance sheet (2004)

Simplified balance sheet for transmission as at 31/12/2004

In the absence of actual data, the following is assumed Adjustment to Gross value : as calculated in 110 kV assets Adjustment to depreciation: pro rata to balance sheet value It is assumed these 110 kV assets were financed by LT loans and equity, which are reduced pro rata. Adjustments to PC1, PC2 and PC3 balance sheets added to transmission balance sheet Note: existing 110 kV assets for Large PCs are not added to transmission, but new 110 kV assets in these regions are assigned to transmission

Worksheet Generation Scenarios This worksheet contains the generation schedule for each scenario
Item Total generated volume Description Planed gross output (GWh) from each power plant, JV, IPP and imports in each year for each scenario Comments Data to be provided by IoE for scenarios 2, 3 and 4 Gross output (before self consumption and own use) Do not change order of power plants

Worksheet Power Station Equitisation


Item Equitisation date % Description Year in which the power station is planned to be equitised % of equity to be equitised Comments Include JVs where EVN is the majority shareholder here with an equitisation date of 2005.

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Worksheet Power Station Data


Item Location Type of enterprise Description Region where power plant is located Identify type of enterprise Comments For information only not required EVN 1 only use for Hoa Binh, Tri An and Yaly. (ie plants that are never to be equitised and consolidated with transmission in single buyer entity EVN 2 - include all other EVN plants including JVs where EVN will be the major shareholder JVs EVN JV plants where EVN will be a minority shareholder IPPs - Other power plants in which EVN has no financial interest Imports imports for neighbouring countries Each Power Plant must be categorised Only select one type for each plant If a power plant has been wrongly categorised, then please contact either Pham Ngoc Thang or Bill Pemberton before making any changes here Only select one type for each plant If an EVN power plant has been wrongly categorised, then please contact either Pham Ngoc Thang or Bill Pemberton before making any changes here Must be consistent with type of plant (eg if type of plant is gas, then enter gas burn; DONOT also enter the fuel burn for reserve fuel) Only enter data for EVN plants Different sources of coal and gas can have different prices Make sure Use specified plant specific self consumption data? switch on parameter worksheet is set to yes if data is entered. Self consumption data (including zero if necessary) should either be entered for all sources, or non entered and average self consumption used instead. Using average self consumption data specified in energy balance applies to all sources (including imports and other non-EVN sources) Determines income of each power plant 2005 USD prices

Type of plant

Enter 1 in appropriate column

Fuel burn

Fuel consumption to generate 1 GWh of electricity

Self consumption data

% of gross output required for self consumption

Bulk electricity selling price

Price (USD/kWh) obtained by selling electricity to singe buyer

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Item Capital expenditure

Description Planned capital expenditure in each year for each source

Comments Exclude IDC In 2005 USD terms Data only required for EVN power plants

Worksheet Fuel Costs


Item Fuel costs Description Expected price of each type of fuel in future years. Comments Expressed in 2005 USD terms Fuel categories correspond to those in work sheet power station data Note: Gas price is price per 000 m3.

Worksheet Joint Ventures


Enter data here for JVs where EVN is the minority shareholder. Item Description Name Name of JV EVNs % contribution % of total capital supplied by EVN Expected return EVNs expected annual return on its investment Start production The year the JV is expected to start production Total cost Total cost of JV in each year Comments

Determines when EVN starts receiving income from the JV Include all pre 2004 capital expenditure in 2004 column

Worksheet Base Regional Demand


Base regional demand data forecasts used to calculate future demand for each PC.

Worksheet Actual Demand


Calculates actual demand for each customer category in each year for each PC, taking into account available generation.

Worksheet Exist Foreign Loans


Details of all existing foreign loans converted to USD (as at 01/01/05). Data obtained from former ICM module, and each loan allocated to one or more modelled entities. Data included outstanding loan, future loan repayments, future interest payments and IDC

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Worksheet Exist VND Loans


Details of all existing VND loans (as at 01/01/05). VND. Data obtained from former ICM module, and each loan allocated to one or more modelled entities. Data included outstanding loan, future loan repayments, future interest payments and IDC

Worksheet 2004 Accounts


Breakdown of EVNs 2004 financial statements

Worksheet EVN Telecom


Financial statements for EVN telecom entity

Worksheet Thu Duc


Financial statements for Thu Duc Manufacturing Co entity

Worksheet Equip Man Co


Financial statements for Equipment Manufacturing Co entity

Worksheet Consulting
Financial statements for Consulting entity.

Worksheet Transmission
Financial statements for Transmission entity.

Worksheet Power Companies


Summary financial statements for all 64 Power Companies combined.

Worksheet Main EVN PP


Summary financial statements for all EVN owned Power Plants except the 3 HPPs combined.

Worksheet 3 HPPS
Summary financial statements for Hoa Binh, Tri An and Yaly combined

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Worksheet Single Buyer


Financial statements for the Single Buyer Entity

Worksheet Core Business


Summary financial statements for the Core Business entity

Worksheet Total Non-core


Summary financial statements for EVN Telecom, Thu Duc Manufacturing Co, Equipment Manufacturing Co and Consulting (PECC1, PECC2, PECC3, PECC4 combined) combined.

Worksheet EVN Consolidated


Summary financial statements for the whole of EVN.

Worksheet Summary
Summary of key operating parameters of EVN Consolidated

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Annex 4

Business Model of EVN User Guide July 2006

Asian Development Bank Electricity of Vietnam


Song Bung 4 Hydropower Project, TA No. 4625-VIE

SWECO

IPA Energy Consulting

Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

1 Overview
The main driver for the model is the demand forecast defining how much electricity different categories of consumer require, and the associated capital expenditure and generation schedule to meet this demand. The information given in the draft Master Plan VI is planned to be used since this gives the latest demand forecasts and associated investment plan and generation schedule. The links between demand, capital expenditure program and generation schedule are complex and these will not be modelled within the existing business plan. Instead the demand forecasts, capital expenditure plan and generation schedule will be assumed fixed. In order to perform sensitivity analysis on these key variables, various different scenarios will be included (e.g. 10% reduction in demand, 1 year delay in capital expenditure program). From this information an energy balance can be obtained and this will be used to determine the expected revenues and cost of generating, transmitting and distributing this electricity. The main modules in the model are as follows: Distribution Companies. PC Dong Noi, PC Hoa Duong, PC HCMC, PC Hanoi, PC Hai Phong, PC Ninh Binh, PC1, PC2, PC3, and PC Khank Hoa are modelled separately. Unless otherwise stated, PC3 refers to the original PC3 but excluding PC Khank Hoa. Power Stations. Each existing and planned EVN power station, including JVs where EVN has a majority shareholding (referred to as EVN JV Power Stations, to distinguish them from other JV where EVN is a minority shareholder), is modelled separately. It is assumed that each Power Station sells its electricity to the Single Buyer entity. Single Buyer entity. This entity serves two purposes in the proposed model. First, it acts as single buyer of electricity by buying electricity from all EVN power stations (including EVN JV PP), Other JVs, IPPs, and imports, and then selling bulk electricity to each Power Company. Second, it operates the HV transmission network, and the Base PP (eg Hoa Binh, Tri An and Yaly) that are planned to stay in total EVN ownership1. The costs of the Single Buyer are the cost of buying electricity from other Power Stations, the cost of operating the HV transmission network, and the operating costs of Base PP.

In addition there are simple modules for the non-core businesses: Telecom, the Electrical and Mechanical Manufacturing Companies, and the Consulting Companies. Figure 1 illustrates the main cash flows between the various modules

There is a implicit assumption that only HPPs can be Base PPs. Page A4-2

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Figure 1: Summary of Main Cash Flows between Entities


Equitisation Proceeds

Dividends

Dividends

Customers

Non Core Businesses

Operating Costs eg Wages, Materials, Services, Finance costs.

End Users

10 Power Companies

EVN Single Buyer of Electricity


(Including HV Transmission and Base PP)

EVN Equitised and EVN JV Power Stations

Coal Gas Oil

IPPs + Imports

Other JVs

Loans, loan repayments

The main cash flows are for the core business. End users pay the Power Company for the electricity supplied and used. The Power Company in turn pays its own operating costs (e.g. wages, materials, interest on money it has borrowed). It also pays the Single Buyer for the supply of bulk electricity. The Single Buyer then pays all the Power Stations for the electricity they have generated at the appropriate tariff. The EVN Power Stations use this money to pay for the fuel (coal, etc) and their own operating costs. Also shown are the expected flows from the core activities to the non-core businesses, which will also have their own customers for their services and products, and their own operating costs. Some of their income will come from the core business entities in EVN. The cash flows of loans to finance the capital expenditure program of each entity, and the interest and loan repayments are also shown Equitisation proceeds from the sale of shares in equitised Power Companies and Power Stations, and Non-EVN contributions to EVN JVs flow into EVN (represented here by the Single Buyer) These Entities will also pay dividends to their shareholders. EVN will also receive a proportion of the profits from Other JVs it has invested in. It is important to realize the limitations of such a model. EVN is a large and complex organization, with many separate entities, each of which is a significant business in its own right. The model is by necessity an approximation of EVNs actual operations.
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The model requires a lot of data initially to seed the model, some of which is readily available, or only available with considerable effort. Where relevant data is not readily available, sensible estimates have been used until more accurate data become available.

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2 Key Inputs
The key inputs to the model are: Enduser demand, capital expenditure plan, generation schedule (from Master Plan VI). Financing of capital expenditure (split of expenditure by foreign and local currency, % of financing by loans, interest rate, repayment period). Planned equitisations (entity, timing, expected % to be equitised). Future end-user tariffs by major category. EVN Joint Ventures Power Stations (timing, amount of EVN contribution). Future fuel costs, cost of power purchases. Other operating costs by entity. Information of Other JVs (total cost, EVNs share, expected return)

Further details of the inputs are given in the Annex.

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3 Main Outputs
The main outputs are: Financial statements and performance indicators for each entity. Consolidated financial statements and performance indicators for Core Business. Consolidated financial statements and performance indicators for EVN as a whole. Sensitivity results. Internal transfer prices.

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4 Outline
The model is build up from a number of small models of individual entities as follows: Power Companies - PC Dong Noi, PC Hoa Duong, PC HCMC, PC Hanoi, PC Hai Phong, PC Ninh Binh, PC1, PC2, PC3, PC Khank Hoa. EVN Power Stations each of the existing and planned EVN power stations is modelled separately. These include those that are never to be equitised (eg Hoa Binh, Tri An, Yaly, collectively referred to as Base PP), new or existing Power Stations that might be equitised, and JVs where EVN will be the major shareholder (referred to as EVN JV Power Stations). Non-core Activities. EVN Telecom, Thu Duc Manufacturing Co, Equipment Manufacturing Co and Consulting (PECC1, PECC2, PECC3, PECC4 combined) are each modelled separately. Transmission Entity Combination of the existing four power transmission entities. Each of the above entities is initially modelled as a stand alone separate entity, in which EVN initially holds all of the shares. This is not meant to represent the actual legal structure of each entity, but rather it is a convenient and realistic way of modelling each entity in a similar way (developing a separate model for each of the above individual entities would be impossible). These entities are then successively aggregated as shown in diagram below and at each aggregation inter-entity transfers are eliminated. All profit attributed to EVN as a shareholder of the modelled entity is assumed to remain as retained profit. EVN JV Power Stations, where EVN is the majority shareholder are modelled as if they are an EVN entity that is to be equitised in 2005, with the proportion to be equitised being equal to the non-EVN shareholding2. Other JVs, where EVN is the minority shareholder, are not specifically modelled, but EVNs shareholding and share of its profits are incorporated in the consolidated results. In the remaining part of this documentation, unless otherwise clarified, Other JV refers to power stations in which EVN is the minority shareholder. Each entity is modelled on its own worksheet, and these are then aggregated as follows: Power Companies sum of results of all 10 PCs (no consolidation). Main EVN PP sum of results of all existing and new EVN Power Stations (except Base PP) plus EVN JVs (no consolidation). Base PP sum of results of Base PP (currently only Hoa Binh, Tri An and Yaly) (no consolidation). Non-core Business aggregate of EVN Telecom, Thu Duc Manufacturing Co, Equipment Manufacturing Co and Consulting (PECC1, PECC2, PECC3, PECC4 combined) (no consolidation). Note that Transmission still remains a separate entity at this stage. Single Buyer consolidation of results from Transmission, Base PPs and the inclusion of power purchases from Other JVs, IPPs and imports. Core Business consolidation of results from Single Buyer, Power Companies and Main EVN PP.
From a modelling point of view this is fine for JVs where EVN will hold the majority of shares, since these assets will appear on EVNs consolidated balance sheet and the partners shares will be a minority interest. In the case of JVs where EVN is the minority shareholder, a different approach is required since here the assets should NOT appear on EVNs balance sheet, but EVNs share of the profit from these JVs will appear in the P&L as share of profit from other sources.
2

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EVN Consolidated consolidation of Core Business and Non-core Business. It is at this stage that the equitisation proceeds, GoV capital injections, EVNs contribution to, and its share of profit from, Other JVs are included. The outputs from a number of EVN Power Plants can be combined to form one Power Station for modelling purposes (eg Power Plants Uong Bong 1 & 2 are combined to form one Power Station Uong Bong). In such cases, the fuel costs and expected sales revenue are calculated on a plant by plant basis and then aggregated, thus allowing different fuel burns, and different selling from each Power Plant to be modelled if necessary. However any capital expenditure for each power plant is aggregated before modelling the financing of this capital expenditure3. The following diagram illustrates the relationship between the entities and their aggregation and consolidation.
Existing EVN PP New EVN PP

Main EVN PP

EVN JVs

Yaly

Tri An Base PP Hoa Binh Single Buyer Core Business

???

EVN Consolidated

Transmission

10 Power Companies

Power companies

EVN Telecomm Thu Duc Co Total Non-core Equip Man Co 4 PECCS

There is a potential problem here if the phasing of the capital expenditure for two or more Power Plants is different because interest payments will be capitalised over the construction period of the whole Power Station, rather than over the period of the construction of each of the respective Power Plants. To avoid this it is necessary to model each Power Plant as a separate Power Station. This is only a problem if there is capital expenditure at two or more Power Plants that belong to one Power Station. It is possible to overwrite the calculated date when capital expenditure is to stop being capitalised for each Power Station Page A4-8

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SWECO International IPA Energy Consulting

5 Energy Balance
The starting point for estimating future demand is energy balances prepared by IoE. Unfortunately these do not go into the necessary detail and so some extrapolation is necessary Three sets of data are used: (1) Estimates of regional (North, Central and South) sales by main category, losses, self consumption and total generation for 2005, 2010 and 2015. (2) Actual sales in each of the 10 PCs in 2005. (3) Annual gross production in each year 2006-2012 given in the generation schedule. It is assumed that these are all internally consistent and that there is no unsatisfied demand; in particular the expected generation in years for which there are no sales forecasts is just sufficient to cover demand in those years, once losses etc have been taken into account. Estimate sales (and losses) (by category and by region) in intermediate years by assuming constant growth. Apply respective regional annual growth rates for each customer category to the actual 2005 sales for each customer category in each PC. Estimate distribution losses for each PC (based on specified distribution loss for each PC). Add distribution losses to total sales to give total requirement for each PC. Add transmission losses to distribution requirement (based on loss % given in IoE energy balance). Add self consumption (either global figure given in IoE balance or calculated from plant specific self consumption data). This gives the gross generation requirements. Pro rata all data (sales, losses, self consumption) to match output in generation schedule.

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SWECO International IPA Energy Consulting

6 Capital Expenditure
The model divides EVNs existing and future assets into different categories to reflect the different characteristics (from financial modelling point of view) of these assets: HV transmission. LV distribution. Thermal power plants (TPP). Hydro power plants (HPP). EVN Telecom. Other Non-core entities.

In some cases these are further split as follows: HV transmission - 500 kV, 220 kV and 110 kV. LV distribution - LV distribution networks and LV rural electrification. Other Non-core entities investments in Thu Duc Co, Equipment Manufacturing Co, Consulting.

Capital expenditure is funded by four possible sources: USD loans, VND loans, capital injections into EVN, and EVNs own resources. The calculation of loan repayments and interest payments are modelled in a conventional way. The difference between the capital expenditure and the total amount borrowed in loans in a particular year is assumed to be a capital injection into the relevant entity by EVN ie EVNs own contribution plus any capital injection (ie from GoV) into EVN is assumed to be an EVN injection into the modelled entity, and appears as additional equity for that entity. Details of the capital expenditure (including financing parameters) for each new power plant are input, where as annual totals are input for capital expenditure in HV transmission and LV distribution. The model could be developed to include details of each major or significant investment in HV transmission, and aggregate the results, and this would allow different projects to have different financing parameters. In theory a similar approach could be used for capital expenditure in LV distribution, but the large number of different schemes would make this difficult.

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7 Equitisation
The equitisation of an entity is modelled as follows: Assume x% (which is <50%) is to be equitised in year N. Then at the end of year N, x% of the total equity in the entity (ie sum of EVN equity, retained profits, other funds, revaluation fund) is split (1-x%) to EVN, and x% to other shareholders, and the retained profits, other finds, revaluation fund set to zero. In this (and subsequent year), y% of profits after tax are distributed as dividends to shareholders (and shown in P&L statement), and the remaining profit retained by the entity as retained profits. Dividends to non-EVN Shareholders are assumed to be paid in cash, where as the dividend to EVN is assumed to remain within EVN at the consolidation level. After equitisation, further capital injections to finance the CAPEX program are assumed to be split between EVN and the new shareholders. This reallocation of equity in the year of equitisation can be difficult to see in the model because other adjustments are made at the same time, so the following illustrates what occurs.
Adjustments Capital injections (To finance CAPEX) Allocation of retained profits Balance at end of Year N-1 Balance at end of year N 540.0 360.0 900.0 50.0 0.0 0.0 950.0

Equity
EVN Equity
bn VND bn VND bn VND bn VND bn VND bn VND bn VND

Other shareholders
Total share capital Retained profits Other funds Revaluation reserve

Total equity

500.0 0.0 500.0 100.0 100.0 100.0 800.0

Re allocation of equity due to equitisation 480.0 320.0 800.0 0.0 0.0 0.0 800.0

+60.0 +40.0 +100.0

0.0 50.0

100.0

50.0

The first column shows the equity part of the balance sheet at the end of year N-1. The second column shows the result of equitising 40% of the entity in year N (EVN retains 60% of total equity, new shareholders obtain 40%). The third column shows new capital injections required under the financing assumptions to finance CAPEX in year N. Total injection of 100 bn VND is required in this example. The fourth column shows the allocation of retained profit (the dividend payments have already been deducted from the profit in the P&L statement) The fifth column shows the resulting equity part of the balance sheet at the end of Year N. The proceeds from equitisation are incorporated in the EVN consolidated financial statements, not in the entitys financial statement.

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8 Rates of exchange and inflation


The model works primarily in VND, but some costs are expressed in USD and it is necessary to convert these into appropriate VND. There are 3 factors at work USD inflation the change prices expressed in USD due to USD inflation VND inflation - the change in prices expressed in VND due to VND inflation VND/USD exchange rate this can either mirror changes in USD and VND inflation or there might be a real change in the exchange rate (ie a change that can not be accounted for purely in terms of changes in USD and VND inflation rates. At present it is assumed there is no real change in exchange rates Exchange rate in year i (RoEi ) = RoEi-1 * (1+real change in exchange rate in year i)*(1+USD inflation in year i)/(1+VND inflation in year i). This is used to convert USD costs to VND in year i

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9 Financial Statements (Individual entities)


The following tables summarise the way the P&L and balance sheets for each type of entity are complied. Items highlighted in bold italic font are parameters than can be changed (see later) Profit & Loss Power Companies Existing Power New power Stations Transmission Non Core Stations Main Income Other income O&M Tariff * sales % of main income 2004 actual % of Gross asset value Selling price to Single buyer * net output Zero 2004 actual % of Gross asset value Selling price to Single buyer * net output Zero HPP - 0.67% of gross asset value TPP 2.5% of Gross asset value Zero Zero N/a Assumed to equal total costs Zero 1.5% of gross asset value Annual increase in sales 2004 actual % of main income EVN Telecom - 20% annual increase Other 8% annual increase 2004 actual % of total sales 2004 actual % of total sales N/a

Selling costs Admin costs Power purchase

2004 actual % of total sales 2004 actual % of total sales Bulk supply tariff * total requirement N/a

Zero Zero N/a

Zero Zero Transmission losses * average cost of bulk electricity N/a

Fuel costs

HPP n/a TPP gross output * fuel burn (units/GWH) * unit fuel price HPP Gross output * hydropower tax TPP n/a

N/a

Hydro tax

N/a

N/a

N/a

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Profit & Loss Depreciation Foreign exchange losses /gains Interest Corporate tax Dividends

Power Companies % of gross asset value

Existing Power Stations

New power Stations

Transmission

Non Core

Increase/decrease in closing value of USD loans (both new and existing) at year end

Calculated on average of opening and closing balances of for new loans+ actual values for existing loans % of gross profit For equitised entities, profit after tax * % of profit distributed as dividends * % Equitised, otherwise zero N/a N/a

Balance sheet Cash Receivables from outside EVN

Power Companies

Existing Power Stations

New Power Stations

Transmission

Non Core

Calculated from cash flow statement Total sales * delay in non-EVN customers paying N/a N/a N/a N/a Total sales from nonEVN sources* delay in non-EVN customers paying Total sales from EVN sources * delay in paying for bulk power4

Receivables from inside EVN Inventories Other current assets


4

Total sales * delay in paying for bulk power

Total income * delay in paying for bulk power

% of gross asset value 2004 value (ie no change)

Note these do not appear as payables within EVN on other entities balance sheets. Page 4-14

Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

Balance sheet Fixed assets CIP

Power Companies

Existing Power Stations

New Power Stations

Transmission

Non Core

Gross asset value accumulated depreciation New CAPEX + any IDC is recorded under CIP for duration of construction period, then transferred to Fixed Assets 2004 value (ie no change) 2004 value (ie no change) (O&M + selling + admin costs) * delay in paying other costs Power purchase costs * delay in paying for bulk power 2004 value (ie no change) For year N, calculate repayments for Year N+1 Total loans (new existing , USD, VND) - Current portion of LT loans 2004 value (ie no change) HPP - (O&M + hydro tax) * delay in paying other costs TPP (O&M * delay in paying other costs) + (fuel cost * delay ion paying fuel costs) N/a O&M * delay in paying other costs (O&M + selling + admin costs) * delay in paying other costs N/a New CAPEX + any IDC is recorded under CIP until completion of construction, then transferred to Fixed assets New CAPEX + any IDC is recorded under CIP until completion of construction, then transferred to Fixed assets New CAPEX + any IDC is recorded under CIP for duration of construction period, then transferred to Fixed assets New CAPEX + any IDC is recorded under CIP for duration of construction period, then transferred to Fixed assets

Construction materials Other non current assets Payables outside EVN

Payables inside EVN Short term Loans Current portion of LT loans LT Loans Other Lt Liabilities

Power purchase costs * delay in paying for bulk power

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SWECO International IPA Energy Consulting

Balance sheet EVN Share capital Other share capital Retained profits Other reserves Revaluation reserve 2004 balance sheet data

Power Companies

Existing Power Stations

New Power Stations

Transmission

Non Core

EVNs assumed share capital in entity, plus any EVN capital injections for CAPEX minus any shares sold under equitisation process Equitised shares plus any proportion of capital injection from new shareholders to finance CAPEX Profit from P&L 2004 value (ie no change) 2004 value (ie no change) For PC Dong Noi, PC Hoa Duong, PC HCMC, PC Hanoi, PC Hai Phong, PC Ninh Binh, PC1, and PC2, the appropriate balance sheet data for 2004. For PC Khank Hoa, the balance sheet data prepared for equitisation process, For PC3, the PC3 Balance sheet minus Balance sheet data for PC Khank Hoa. 2004 balance sheets. Payables to EVN is adjusted to match known loans. 2004 Balance sheet data for some small Power Stations (3 diesel plants, Can Tho, Dray Hling, Na Loi, Nam Mu, Ry Ninh, Srok Phu Mieng, Suoi Sap, Suoi Vang, Thu Duc) is not yet available and so these are included in Transmissions balance sheet. Zero Residual of 2004 consolidated balance sheet is assigned to Transmission. That is balance sheet items that can not be allocated either to a Power company, an existing Power Station , EVN Telecom, Thu Duc Manufacturing Co, Equipment Manufacturing Co PECC1, PECC2, PECC3, or PECC4 is included in Transmissions balance sheet5. As per appropriate 2004 balance sheets

Note that the balance sheet data for Power Plants for which not individual balance sheet data has been provided are included here eg balance sheet data for list of Page 4-16

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SWECO International IPA Energy Consulting

10 Financial Statements (Consolidated entities)


Profit & Loss Main Income Other income Power purchases O&M Selling costs Admin costs Fuel costs Hydro tax Depreciation Foreign exchange losses /gains Interest Transmission + Base PP Transmission + Base PP Single Buyer Sales of bulk power to PCs None Power purchases from Other JVs, IPPs and imports O & M costs of Transmission + Base PPs % of total income Transmission + Base PP N/a Core business Power Company Power Company Single Buyer O&M costs of Power Companies, Main EVN PP, Single Buyer Power Companies + Single Buyer Power Companies + Single Buyer Main EVN PP Single Buyer + Main EVN PP Power Companies + Main EVN PP + Single Buyer Power Companies + Main EVN PP + Single Buyer Power Companies + Main EVN PP + Single Buyer EVN Consolidated Core business + non core business Core business + non core business Core business Core business + non core business Core business + non core business Core business + non core business Core business Core business Core business + non core business Core business + non core business

Transmission + Base PP

Core business + non core business

plants given in existing Power Station column will appear in Transmissions balance sheet. Page 4-17

Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

Profit & Loss Profit from JVs

Single Buyer N/a

Core business N/a

EVN Consolidated Total cost of Other JV *EVNs share of Investment in Other JV * EVNs expected return % of profit Power Companies + Main EVN PP

Corporate tax Dividends

% of profit N/a

% of profit Power Companies + Main EVN PP

Balance sheet Cash Receivables from outside EVN Receivables from inside EVN Inventories Other current assets Fixed assets CIP

Single Buyer Calculated from cash flow n/a Transmission + Base PP Transmission + Base PP Transmission + Base PP Transmission + Base PP Transmission + Base PP

Core business

EVN Consolidated

Power Companies + Main EVN PP + Single Buyer Power Companies + Main EVN PP + Single Buyer Power Companies + Main EVN PP + Single Buyer Power Companies + Main EVN PP + Single Buyer Power Companies + Main EVN PP + Single Buyer Power Companies + Main EVN PP + Single Buyer

Core Business + Non Core Business None Core Business + Non Core Business Core Business + Non Core Business Core Business + Non Core Business Core Business + Non Core Business

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

Balance sheet Construction materials Other non current assets Payables outside EVN Payables inside EVN Short term Loans Current portion of LT loans LT Loans Other LT Liabilities Minority Interest EVN Share capital Retained profits

Single Buyer Transmission + Base PP Transmission + Base PP

Core business Power Companies + Main EVN PP + Single Buyer Power Companies + Main EVN PP + Single Buyer

EVN Consolidated Core Business + Non Core Business Core Business + Non Core Business

None Transmission + Base PP Transmission + Base PP Transmission + Base PP Transmission + Base PP N/a Transmission + Base PP Power Companies + Main EVN PP + Single Buyer Power Companies + Main EVN PP + Single Buyer Power Companies + Main EVN PP + Single Buyer Power Companies + Main EVN PP + Single Buyer Power Companies + Main EVN PP 2004 share capital for Core business + any subsequent GoV injections to finance CAPEX From P&L

None Core Business + Non Core Business Core Business + Non Core Business Core Business + Non Core Business Core Business + Non Core Business Core Business + Non Core Business Core Business + Non Core Business

From P&L

From P&L

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

Balance sheet Other reserves Revaluation reserve 2004 balance sheet data

Single Buyer Transmission + Base PP Transmission + Base PP Transmission + Base PP balance sheet data

Core business Power Companies + Main EVN PP + Single Buyer Power Companies + Main EVN PP + Single Buyer EVN Consolidated accounts balance sheet data for EVN Telecom, Thu Duc Manufacturing Co, Equipment manufacturing Co, PECC1, PECC2, PECC3, PECC4

EVN Consolidated Core Business + Non Core Business Core Business + Non Core Business EVN 2004 Consolidated accounts

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

Annex Data Input for Business Model Data Requirements in Worksheet BASE DATA

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

Worksheet Parameters
Item Description Comments Financing CAPEX Specify financing parameters for 500 kV, 220 kV, 110 kV transmission, LV distribution network, LV rural electrification program, HPP, TPP, EVN Telecom, other Non-core entities (Thu Duc, Equipment Manufacturing Co, Consulting). Project specific financing parameters can be set for each new EVN Power Plant if necessary in Worksheet Power Stations Financing parameters for 110 KV lines apply to both 110 kV CAPEX by Transmission entity and by Power Companies. % of total expenditure % of total CAPEX for a particular Remaining % of CAPEX is assumed to be in local currency investment payable in USD Financing Source of money to fund CAPEX Remaining % of CAPEX Is assumed to be financed from EVN internal sources. % by foreign (USD) loans Capital injections into EVN by GoV only appear in EVN consolidated % by local (VND) loans statement. Elsewhere they are included in EVNs contribution % by equity injections into EVN Interest rate Interest rate for local and foreign loans Capitalise IDC? = Yes capitalise IDC. For HPP and TPP, IDC is capitalised over the whole construction = No - Do not capitalise IDC (ie period of the Power Plant. assume IDC is included in P&L) For HV and LV lines, IDC is capitalised over the Construction Period for those lines Construction Period Period over which IDC on HV and Only applies to CAPEX on HV and LV lines and CAPEX in non-core LV lines is capitalised. entities. Construction period for a new Power Plant is calculated from CAPEX data. Depreciation HV transmission (500 kV, 220 kV, 110 kV) , LV distribution (includes rural electrification), HPP, TPP, EVN Telecom, Non-core Depreciation Depreciation period in years for Depreciation is calculated as a % of gross fixed assets at start of different categories of fixed asset year for each category of asset. O & M costs HV transmission (500 kV, 220 kV, 110 kV) , LV distribution(includes rural electrification), HPP, TPP O & M costs O & M cost (expressed as a % of O & M cost is calculated as a % of adjusted fixed assets for each asset value) category of asset.

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

Item Financial information Real change in VND/USD Exchange rate VND Inflation

Description Real change in USD/VND rate over and above changes due to inflation Annual inflation rate of VND prices

Comments

USD Inflation Exchange rate Tariffs End user tariffs

Annual inflation rate of USD prices Actual exchange rate in 2005 and 2006 Expected average end user tariff in each year for each main consumer category (excluding VAT) Hydro tax payable on output from HPPS (2006 value in VND/kWh) Amount of stocks of materials etc held by each entity Average period (in months) for non-EVN customers to pay Average delay in EVN Power Stations paying for fuel Average delay in paying for all other cash operating costs (O&M, Hydro tax) Delay in inter entity payments within EVN Profits tax rate

Only directly used to inflate VND component of CAPEX and to calculate exchange rate. At present it is also used to index other user defined data (Hydro tax, end user tariffs, bulk supply tariff) Only directly used to inflate USD component of CAPEX and calculate future exchange rates. Used to seed exchange rate calculation. Assumes all USD costs are in 2005 USD terms At present it is index linked to VND inflation, but this can be removed by entering specific values

Other parameters Hydro tax Stocks Delay in non EVN customers paying Delay in paying fuel Delay in paying other costs

At present it is index linked to VND inflation, but this can be removed by entering specific values Expressed as a % of total asset value. Used to calculate inventory line in balance sheet Used to calculate receivables for Power Companies and non-core entities Used to calculate payables for Power Stations. Used to calculate payables for all entities.

Delay in paying for bulk power Tax rate

Delay in inter EVN payments (primarily bulk power, but also payments from core to non-core entities) All profits are taxed at this rate.

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

Item Rate of return

Description Expected rate of return on investments % of profit after tax distributed to shareholders Cost of operating power market (as a % of total power market sales) Annual increase in sales and operating costs of EVN Telecom Annual increase in sales and operating costs of non-core entities % of sales for each non-core entity from other EVN entities Determines whether to apply average self consumption data to all generation sources, or use plant specific ones

Comments Used to calculate selling price of electricity for each Power Station, to give this return on gross asset value, and the bulk supply tariff for PCs, assuming this return on assets.

Dividend Power market costs

Cost to single buyer entity

EVN Telecom annual sales/cost increase Non Core annual sales/cost increase % of sales from inside EVN Use specified plant specific self consumption data?

Used to calculate EVN Telecoms income and costs Used to calculate income and costs of non-core entities

Used to calculate consolidated income and costs by eliminating inter company payments between core and non-core entities. Yes = use plant specific ones (self consumption data should be entered for all sources in worksheet Power Station data). The calculated self consumption is then used in energy balance (see worksheet Actual Demand) No = Use average self consumption data specified in energy balance (note output from imports and other non EVN source will be reduced)

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

Worksheet Bulk Supply Tariffs Item Bulk supply tariff f Description Price (in VND/kWh) that each PC purchases its bulk electricity from single buyer Comments At present it is index linked to VND inflation, but this can be removed by entering specific values.

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

Worksheet CAPEX
Item Transmission Description Expected total capital expenditure (in M USD) on 500 kV, 220 kV and 110 kV Expected total capital expenditure (in M USD) on 110 kV, LV distribution network and LV rural electrification by Power company Alternatively, enter total capital expenditure on 110 kV, LV distribution network and LV rural electrification for all Vietnam, and % for each Power company Expected total capital expenditure for each non-core entity Comments Capital expenditure estimates should exclude IDC and be in 2005 USD terms. Capital expenditure estimates should exclude IDC and be in 2005 USD terms. The total data is not required if specific estimates are available for individual PCs.

Power Companies

Other entities

Capital expenditure estimates should exclude IDC and be in 2005 USD terms.

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

Worksheet Sensitivities
Item Sensitivity Description Select appropriate sensitivity Comments 1- Base case 2- 10% reduction in end user demand 3- 1 year delay in completing new Power Plants due to come on stream after 2008 (note that phasing of capital expenditure on these delayed Power Plants is the same as the base case, as is phasing of expenditure on HV and LV lines) 4- Output from HPPS reduced in years 200x, 200y, 200z by 20% Note: Scenario 2, 3 and 4 are currently not available due absence of appropriate generation schedule

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

Worksheet Generation scenarios This worksheet contains the generation schedule for each scenario
Item Power Plant name Description Name of Power Plant or source of electricity Comments DONOT DELETE AN EXISTING ROW OR INSERT NEW ROWS HERE; INSTEAD ADD THE NEW POWER PLANT AT THE END OF THE EXISTING LIST. An existing Power Plant name can be amended or overwritten if necessary but remember to change the information in worksheet Power Plant Data as well. Planned gross output (GWh) from Data to be provided by IoE for scenarios 2, 3 and 4 each Power Plant or source in each Gross output (before self consumption and own use) year for each scenario Do not change order of Power Plants or sources.

Total generated volume

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

Worksheet Power Plant Data


Item Location Power Station Description Region where Power Plant is located Name of parent Power Station Comments For information only. Two or more Power Plants can be grouped into one Power Station for modelling purposes. Select relevant Power Station from list, (a new Power Station name can be added in Worksheet Power Station data) Each Power Plant classified as Base PP, Equitised PP or EVN JV MUST be allocated to a Power Station. A Power Station can consist of only one Power Plant.

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

Item Type of enterprise

Description Identify type of enterprise Base only use for Power Plants that are never to be equitised and consolidated with Transmission in Single Buyer entity. Equitised - include all other EVN Power Plants except EVN JVs EVN JVs EVN JVs where EVN will be majority shareholder Other JVs Power Stations where EVN will be a minority shareholder IPPs - Other Power Station in which EVN has no financial interest Imports imports for neighbouring countries

Type of plant

Enter 1 in appropriate column

Comments Each Power Plant must be categorised. Only select one type for each Power Plant. Only select one type for each Power Plant. If the type of Power Plant is changed from Base PP, Equitised or EVN JV to Other JV, IPP or Import, then the relevant worksheet in workbook Power Stations should be deleted. If the type of Power Plant is changed from Other JV, IPP or Import to either Base PP, Equitised or EVN JV then it is necessary to add a new worksheet in workbook Power Stations (see workbook Power Stations) If the type of Power Plant is changed Base PP to Equitised, them move the relevant worksheet from the base section to equitised section in Workbook Power Stations Add the relevant equitisation data (DONOT INSERT A NEW ROW JUST ENTER THE ACTUAL DATA) in worksheet Power Station Data in workbook Base Data. (see workbook Power Stations) If the type of Power Plant is changed Equitised to Base to, then move the relevant worksheet from the equitised section to base section in Workbook Power Stations Delete the relevant equitisation data (DONOT DELETE THE COMPLETE ROW JUST DELETE THE ACTUAL DATA).in worksheet Power Station Data in workbook Base Data. (see workbook Power Stations) Enter the Power Station name and Power Station reference number (this is the number in the purple box in worksheet Power Station Data in workbook Base Data in column A next to the name Check that the worksheet is picking up the correct generation and capital expenditure data for the new Power Station (rows 12 and 15). Note that each sheet in Workbook Power Stations refers to a Power Station, and not a Power Plant.

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

Item Fuel burn

Description Fuel consumption to generate 1 GWh of electricity

self consumption data

% of gross output required for self consumption

Bulk electricity selling price Capital expenditure

Price (USD/kWh) obtained by selling electricity to singe buyer Planned capital expenditure in each year for each source

Comments Must be consistent with type of Power Plant (eg if type of plant is gas, then enter gas burn; DONOT also enter the fuel burn for reserve fuel) It is only necessary to enter data for EVN Power Plants Different sources of coal and gas can have different prices Make sure Use specified plant specific self consumption data? switch on parameter worksheet is set to yes if data is entered. Self consumption data (including zero if necessary) should either be entered for all sources, or non entered and average self consumption used instead. Using average self consumption data specified in energy balance applies to all sources (including imports and other non-EVN sources) Determines income of each Power Plant 2005 USD prices Exclude IDC In 2005 USD terms Data only required for EVN Power Plants

Only Power Plants of type Base PP, Equitised or EVN JV should appear in the workbook Power Stations.

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

Worksheet Power Station Data


Item Power Station name Equitisation date Description Enter name of Power Station Year in which the Power Station is planned to be equitised, or for EVN JVs enter first year of construction % of equity to be equitised , or for EVN JVs % of share held by other shareholders Comments Only required for Power Stations operating Power Plants of type Base PP, Equitised or EVN JV

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

Worksheet Fuel costs


Item Fuel costs Description Expected price of each type of fuel in future years. Comments Expressed in 2005 USD terms Fuel categories correspond to those in worksheet Power Station Data Note: Gas price is price per 000 m3.

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

Worksheet Joint Ventures


Enter data here for JVs where EVN is the minority shareholder. Item Description Name Name of JV EVNs % contribution % of total capital supplied by EVN Expected return EVNs expected annual return on its investment Start production The year the JV is expected to start production Total cost Total cost of JV in each year Comments

Determines when EVN starts receiving income from the JV Include all pre 2004 capital expenditure in 2004 column

Page A4-34

Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

Worksheet Base Regional Demand


Base regional demand data forecasts used to calculate future demand for each PC.

Worksheet Actual Demand


Calculates actual demand for each customer category in each year for each PC, taking into account available generation.

Worksheet Exist Foreign Loans


Details of all existing foreign loans converted to USD (as at 01/01/05). Data obtained from former ICM module, and each loan allocated to one or more modelled entities. Data included outstanding loan, future loan repayments, future interest payments and IDC

Worksheet Exist VND Loans


Details of all existing VND loans (as at 01/01/05). VND. Data obtained from former ICM module, and each loan allocated to one or more modelled entities. Data included outstanding loan, future loan repayments, future interest payments and IDC

Worksheet 2004 accounts


Breakdown of EVNs 2004 financial statements. Used to determine 2004 balance sheet for Transmission entity. It is possible to adjust Transmissions balance sheet. If necessary.

Worksheet 2005 accounts


Breakdown of EVNs 2005 financial statements. Used to determine 2005 balance sheet for Transmission entity. It is possible to adjust Transmission balance sheet. [Only used once actual 2005 balance sheet data for all Power Companies and Power Stations has been entered].

Worksheet EVN Telecom


Financial statements for EVN telecom entity.

Worksheet Thu Duc


Financial statements for Thu Duc Manufacturing Co entity.

Worksheet Equip Man Co


Financial statements for Equipment Manufacturing Co entity.

Worksheet Consulting
Financial statements for Consulting entity.

Worksheet Transmission
Financial statements for Transmission entity.

Worksheet Power Companies


Summary financial statements for all 10 Power Companies combined.

Worksheet Main EVN PP


Summary financial statements for all EVN owned Power Stations except Base PP.

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

Worksheet Base PP
Summary financial statements for Base PPs.

Worksheet Single Buyer


Financial statements for the Single Buyer Entity.

Worksheet Core Business


Summary financial statements for the Core Business entity.

Worksheet Total Non-core


Summary financial statements for EVN Telecom, Thu Duc Manufacturing Co, Equipment Manufacturing Co and Consulting (PECC1, PECC2, PECC3, PECC4 combined) combined.

Worksheet EVN Consolidated


Summary financial statements for the whole of EVN.

Worksheet Summary
Summary of key operating parameters of EVN Consolidated.

Page A4-36

Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

WORKBOOK POWER STATIONS


This workbook contains a separate worksheet for each EVN Power Station. For existing EVN Power Station, enter historic profit and loss, balance sheet and cash flow data for each year. Points to note: (1) LT Loans. Often the balance sheet data on LT loans and information on loans in workbook base data do not agree. If the problem can not be reconciled, then assume the information in loans file is correct and make an adjustment in the balance sheet (eg in other Liabilities) (2) The Base PP part of the workbook is between worksheets Start-base PP and End-base PP (3) The Equitised PP part of the workbook is between worksheets Start-eq PP and End-eq PP (4) To add a new EVN Power Station, insert a new worksheet in the appropriate part of the workbook Base PP or Equitised PP depending on type of Power Station. Go worksheet Blank HPP or Blank TPP depending on whether the new Power Station is hydro or thermal. Copy the all the contents (press ,<ctrl>A, followed by <ctrl>C, then go to new worksheet and press <ctrl>V) of the appropriate blank worksheet into the new worksheet. Enter the number of the Power Station (as shown in column A of worksheet Power Station Data in workbook Base Data.) in cell F3. Enter the date that the capitalisation of interest is to stop in cell F5.

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

WORKBOOK POWER COMPANIES


This workbook contains a separate worksheet for each power company. Enter profit and loss, balance sheet and cash flow data for each year. Enter planned equitisation date plus % of PC to be equitised. Points to note: (1) LT Loans. Often the balance sheet data on LT loans and information on loans in workbook base data do not agree. If the problem can not be reconciled, then assume the information in loans file is correct and make an adjustment in the balance sheet (eg in other Liabilities)

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Business Model User Manual

SWECO International IPA Energy Consulting

Adding subsequent years data


Power Stations and Power Companies 2005 data (and subsequent years data) profit and loss, balance sheet and cash flow data can be added in the appropriate cells for each Power Station and Power Company. It is necessary to enter actual financial data in all the cells in the 2005 column to ensure future balance sheets balance. Alternatively all the financial data in 2005 column (except P&L, balance sheet and cash flow) can be set to zero, but it will then be necessary to seed the opening balances for new loans (both foreign and local), CIP, gross fixed assets and gross depreciation with the appropriate 2005 values. Workbook Base data Telecom, Thu Duc, Equipment manufacturing company, and Consulting companies. These can be updated in the same way as for Power Stations and Power Companies (as described above.) Transmission. Enter the consolidated balance sheet for EVN into worksheet 2005 accounts. This worksheet will then calculate the resulting balance sheet for Transmission by subtracting the balance sheet data of all the other parts of EVN. The resulting balance sheet data can then be adjusted if necessary. It will then be necessary to link this data with the actual balance sheet data in worksheet Transmission in workbook Base Data. This is done in a same way as the 2004 balance sheet data in worksheet Transmission is linked to the calculated 2004 Transmission balance sheet data calculated in worksheet 2004 accounts. Sales and Demand Worksheets Base Regional Data and "Actual demand already contain actual 2005 demand. If 2006 (or subsequent years) actual demand data is to be used to calculate annual growth, then the formulae in worksheet Base Regional Data will need changing. At present the growth rate over 5 year periods (2005-2010, and 2010-2015) is calculated, since 2005, 2010, 2015 are the only years for which either actual data or firm forecasts are available. To change the formula once 2006 actual demand data has been entered in column D in Worksheets Base Regional Data, change the formulae in cell E5 in Worksheets Base Regional Data from =+D5*(($H5/$C5)^(1/5) to =+D5*(($H5/$D5)^(1/4) Copy this formula into each cell in the following ranges: E5:G9, E12:G16, E19:G23.

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Final Report Main Report Annex 5

SWECO International

Annex 5

FINANCIAL MANAGEMENT ASSESSMENT QUESTIONNAIRE

U:\Documents and Settings\MMJ\My Documents\SEID\PRADEEP\FINAL DEC 2006-NO TRACKS\Main Report\Questionnaire Financial.doc

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SWECO International

Topic 1. 1.1 1.2 Implementing Agency What is the entitys legal status / registration? Has the entity implemented an externally financed project in the past (if so, please provide details)? What are the statutory reporting requirements for the entity? Is the governing body for the project independent? Is the organizational structure appropriate for the needs of the project? Funds Flow Arrangements Describe (proposed) project funds flow arrangements, including a chart and explanation of the flow of funds from ADB, government and other financiers.

Response EVN State Owned Enterprise Yes

Remarks

1.3

Monthly, quarterly, annual reports to GoV

1.4

1.5

Yes

2. 2.1

See figure 6.4

2.2

Are the (proposed) arrangements to transfer N/a the proceeds of the loan (from the government / Finance Ministry) to the entity satisfactory? What have been the major problems in the past in receipt of funds by the entity? In which bank will the Imprest Account be opened? None

2.3

2.4

Not decided yet

2.5

Does the (proposed) project implementing unit EVN has experience of (PIU) have experience in the management of administering ADB loans disbursements from ADB? Does the entity have/need a capacity to manage foreign exchange risks? How are the counterpart funds accessed? No

2.7

2.8

Through dedicated bank account

2.9

How are payments made from the counterpart Transferred from EVN funds?

No NGO planned to be 2.10 If part of the project is implemented by communities or NGOs, does the PIU have the involved necessary reporting and monitoring features built into its systems to track the use of project proceeds by such agencies?

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SWECO International

Topic 2.11 Are the beneficiaries required to contribute to project costs? If beneficiaries have an option to contribute in kind (in the form of labor), are proper guidelines formulated to record and value the labor contribution? 3. 3.1 Staffing What is the (proposed) organizational structure of the accounting department? Attach an organization chart. Identify the (proposed) accounts staff, including job title, responsibilities, educational background and professional experience. Attach job descriptions and CVs of key accounting staff. Is the project finance and accounting function staffed adequately? Is the finance and accounts staff adequately qualified and experienced? Is the project accounts and finance staff trained in ADB procedures? What is the duration of the contract with the finance and accounts staff? Indicate key positions not contracted yet, and the estimated date of appointment.

Response No

Remarks

See text

3.2

See text

3.3

Yes

3.4

Yes

3.5

No (but see text)

3.6

No limit

3.7

None

Yes 3.10 Does the project have written position descriptions that clearly define duties, responsibilities, lines of supervision, and limits of authority for all of the officers, managers, and staff? 3.11 At what frequency are personnel transferred? 3.12 What is training policy for the finance and accounting staff? 4. 4.1 Accounting Policies and Procedures Does the entity have an accounting system that allows for the proper recording of project financial transactions, including the allocation of expenditures in accordance with the respective components, disbursement categories, and sources of funds? Will the project use the entity accounting system? Yes part of EVNs computerised finance system No specific time frequency No specific training policy or program.

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SWECO International

Topic 4.2 Are controls in place concerning the preparation and approval of transactions, ensuring that all transactions are correctly made and adequately explained?

Response Yes

Remarks

4.3

Is the chart of accounts adequate to properly Yes account for and report on project activities and disbursement categories? Are cost allocations to the various funding sources made accurately and in accordance with established agreements? Yes

4.4

4.5

Are the General Ledger and subsidiary ledgers Yes reconciled and in balance? Are all accounting and supporting documents retained on a permanent basis in a defined system that allows authorized users easy access? Yes

4.6

Segregation of Duties 4.7 Are the following functional responsibilities performed by different units or persons: (i) authorization to execute a transaction; (ii) recording of the transaction; and (iii) custody of assets involved in the transaction? Are the functions of ordering, receiving, accounting for, and paying for goods and services appropriately segregated? Yes

4.8

Yes

4.9

Are bank reconciliations prepared by someone Yes other than those who make or approve payments?

Budgeting System 4.10 Do budgets include physical and financial targets? 4.11 Are budgets prepared for all significant activities in sufficient detail to provide a meaningful tool with which to monitor subsequent performance? Yes

Yes

Yes 4.12 Are actual expenditures compared to the budget with reasonable frequency, and explanations required for significant variations from the budget? 4.13 Are approvals for variations from the budget required in advance or after the fact? Usually in advance

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Topic 4.14 Who is responsible for preparation and approval of budgets? 4.15 Are procedures in place to plan project activities, collect information from the units in charge of the different components, and prepare the budgets?

Response Director of HPPMB3, approved by EVN Yes

Remarks

Yes 4.16 Are the project plans and budgets of project activities realistic, based on valid assumptions, and developed by knowledgeable individuals? Payments 4.17 Do invoice-processing procedures provide for: Yes (i) Copies of purchase orders and receiving reports to be obtained directly from issuing departments? (ii) Comparison of invoice quantities, prices and terms, with those indicated on the purchase order and with records of goods actually received? (iii) Comparison of invoice quantities with those indicated on the receiving reports? (iv) Checking the accuracy of calculations? 4.18 Are all invoices stamped PAID, dated, reviewed and approved, and clearly marked for account code assignment? Not stamped PAID, approvals recorded separately.

Yes, approved by Director 4.19 Do controls exist for the preparation of the payroll and are changes to the payroll properly authorized? Policies And Procedures 4.20 What is the basis of accounting (e.g., cash, accrual)? 4.21 What accounting standards are followed? Accrual

VAS

No project specific manuals 4.22 Does the project have an adequate policies and procedures manual to guide activities and at present; follow GoV guidelines. Will prepare ensure staff accountability? manuals 4.23 Is the accounting policy and procedure manual Yes updated for the project activities? 4.24 Do procedures exist to ensure that only authorized persons can alter or establish a new accounting principle, policy or procedure to be used by the entity? Yes

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Topic

Response

Remarks

4.25 Are there written policies and procedures Yes covering all routine financial management and related administrative activities? 4.26 Do policies and procedures clearly define conflict of interest and related party transactions (real and apparent) and provide safeguards to protect the organization from them? 4.27 Are manuals distributed to appropriate personnel? Cash and Bank 4.28 Indicate names and positions of authorized signatories in the bank accounts. 4.29 Does the organization maintain an adequate, up-to-date cashbook, recording receipts and payments? 4.30 Do controls exist for the collection, timely deposit and recording of receipts at each collection location? 4.31 Are bank and cash reconciled on a monthly basis? 4.32 Are all unusual items on the bank reconciliation reviewed and approved by a responsible official? 4.33 Are all receipts deposited on a timely basis? Safeguard over Assets 4.34 Is there a system of adequate safeguards to protect assets from fraud, waste and abuse? 4.35 Are subsidiary records of fixed assets and stocks kept up to date and reconciled with control accounts? No specific measures. Covered by general laws Yes Director, deputy director, Head of Finance N/a Covered by Vietnamese laws

Yes

N/a

Yes

Yes

N/a

4.36 Are there periodic physical inventories of fixed Annually assets and stocks? 4.37 Are assets sufficiently covered by insurance policies? Yes (during constriction)

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Final Report Main Report Annex 5

SWECO International

Topic Other Offices and Implementing Entities 4.38 Are there any other regional offices or executing entities participating in implementation? 4.39 Has the project established controls and procedures for flow of funds, financial information, accountability, and audits in relation to the other offices or entities? 4.40 Does information among the different offices/implementing agencies flow in an accurate and timely fashion? 4.41 Are periodic reconciliations performed among the different offices/implementing agencies? Other

Response

Remarks

No

N/a

N/a

N/a

Follow Vietnamese law 4.42 Has the project advised employees, beneficiaries and other recipients to whom to report if they suspect fraud, waste or misuse of project resources or property? 5. 5.1 Internal Audit Is there an internal audit department in the entity? What are the qualifications and experience of audit department staff? To whom does the internal auditor report? Will the internal audit department include the project in its work program? Are actions taken on the internal audit findings? EVN has Internal Audit function Unknown

5.2

5.3 5.4

EVN Management Board Yes

5.5

Unknown no internal audits of HPPMB3 carried out recently

6. 6.1

External Audit Is the entity financial statement audited regularly by an independent auditor? Who is the auditor? Are there any delays in audit of the entity? When are the audit reports issued? Is the audit of the entity conducted according to the International Standards on Auditing? Yes (VACO)

6.2

No

6.3

Yes

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SWECO International

Topic 6.4

Response Were there any major accountability issues No brought out in the audit report of the past three years? Will the entity auditor audit the project accounts or will another auditor be appointed to audit the project financial statements? Are there any recommendations made by the auditors in prior audit reports or management letters that have not yet been implemented? Is the project subject to any kind of audit from an independent governmental entity (e.g., the supreme audit institution) in addition to the external audit? Has the project prepared acceptable terms of reference for an annual project audit? Reporting and Monitoring Are financial statements prepared for the entity? In accordance with which accounting standards? Are financial statements prepared for the implementing unit? Yes, VAS Put out to tender

Remarks

6.5

6.6

No

6.7

Ministry of Finance can carry out audits to check with compliance of MoF/GoV instructions Unknown

6.8

7. 7.1

7.2

Yes

7.3

Quarterly, annually What is the frequency of preparation of financial statements? Are the reports prepared in a timely fashion so as to useful to management for decision making? Does the reporting system need to be adapted No to report on the project components? Does the reporting system have the capacity to link the financial information with the project's physical progress? If separate systems are used to gather and compile physical data, what controls are in place to reduce the risk that the physical data may not synchronize with the financial data? Does the project have established financial management reporting responsibilities that specify what reports are to be prepared, what they are to contain, and how they are to be used? Are financial management reports used by management? Not really

7.4

7.5

7.6

Yes

7.7

Yes

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SWECO International

Topic 7.8 Do the financial reports compare actual expenditures with budgeted and programmed allocations? Are financial reports prepared directly by the automated accounting system or are they prepared by spreadsheets or some other means? Information Systems Is the financial management system computerized?

Response Yes

Remarks

7.9

Yes

8. 8.1

Yes

8.2

Can the system produce the necessary project Yes financial reports? Is the staff adequately trained to maintain the system? Does the management organization and processing system safeguard the confidentiality, integrity and availability of the data? Yes

8.3

8.4

Yes

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Final Report Main Report Annex 6

SWECO International

Annex 6

EXAMPLES OF JOB DESCRIPTIONS IN FINANCE DEPARTMENT OF HPPMB3

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ATD3

Job Description of Financial Department

Code: MC. P5.01 Version: 01 Issuing date:......

1. Position 2. Department 3. Report to 4. Authorized person 5. Required qualification

Manager Financial Department Director of HPPMB 3 Deputy Manager

Qualification: Bachelor (finance and accounting) Training: Grade A in English and computing skill, refresh course on state governance for officer Experience: - Minimum 5 years working in accounting and finance sector - Experience in accounting of capital construction, preparing accounting report and other accounting related activities - Acquirement of state's general policies, sector policies, acquirement of basic knowledge in finance and accounting, standards, understanding of law codes and legal documents, experience in arrangement of finance and accounting works. - Good command of computing skills and relevant softwares Other necessary skills: - Good coordination with other departments to complete financial finalization and payment of hydroelectricity subprojects 6. Right and responsibility: Advise the Director of HPPMB 3 on accounting and financial issues of the entire HPPMB 3, specifically as following: - Financial management of capital construction and payment and financial finalization according to construction progress during the preparation and construction of hydroelectricity projects. - Supervision and follow up the application for fund allocation and loan for timely payment to contractors of work items under the projects managed by the HPPMB3 Acting on behalf of the Director of HPPMB 3 to manage financial and accounting work of the entire HPPMB 3 according to related principles and the state's ordinance on statistic accounting. Preparing quarterly financial statement, annual statement and inventory report according to accounting standards and time schedule. Detailing schedule of work progress of the Department by months and years. Advising the Director on management of fund for capital construction according to the state regulations. Suggesting changes or maintaining solutions to promote effective management of fund for capital construction. Reporting to the Director of wrong actions.

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ATD3

Job Description of Financial Department

Code: MC. P5.02 Version: 01 Issuing date:......

1. Position 2. Department 3. Report to 4. Authorized person 5. Required qualification

Deputy Manager Financial Department Manager

Qualification: Bachelor (finance and accounting) Training: Grade B in English and computing skill Experience: - Minimum 3 years working in accounting and finance sector - Experience in accounting of capital construction, preparing accounting report and other accounting related activities - Experience in payment for completed volume of capital construction, prepare report of fund finalization for capital construction and accounting report, experience in bid evaluation - Acquirement of state's general policies, sector policies, acquirement of basic knowledge in finance and accounting, standards, acquirement of law codes and legal documents, experience in arrangement of finance and accounting works. - Good computing skills and relevant softwares Other necessary skills: Good coordination with other departments to complete financial finalization and payment of hydroelectricity subprojects

6. Right and responsibility: Coordinating with officers to prepare and interpret report of fund finalization for hydroelectricity projects managed by the HPPMB3. Advising the manager on payment and finalization of fund, prepare report of fund finalization Preparing quarterly and annually financial statement and inventory report according to accounting standards and time schedule. Detail schedule of work progress of officers by months and years Undertaking and manage activities of the department when manager is absent Dealing with other works as delegated by Directors of the HPPMB3 and manager.

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ATD3

Job Description of Financial Department

Code: MC. P5.01 Version: 01 Issuing date:......

1. Position 2. Department 3. Report to 4. Authorized person 5. Required qualification

Officer Financial Department Manager Accounting and financial officer of the same or higher position

Qualification: Bachelor (finance and accounting) Training: Grade A in English and office computing certificate Experience: - Minimum 1 year working in accounting and finance sector - Preparing accounting report - Experience in accounting of investment and capital construction, preparing accounting report and other accounting related activities - Undertaking payment and fund finalization for work items of hydroelectricity project - Acquirement of fund finalization of items of the completed projects - Acquirement of the state policies and regimes and legal documents applied - Good computing skills and relevant softwares Other necessary skills:

6. Right and responsibility: Being accounting and financial officer in supervising payment and finalization of fund for construction of work items of hydroelectricity projects; assisting managers within the scope of assigned duties. Undertaking payment and finalization of capital construction of work item: proceed, monitor, follow up and supervise implementation of legal procedures according to regulation on capital construction. Preparing documents related to his/her assigned duties. Undertaking accounting of capital construction investments within his/her assigned duties according to accounting regime applied for EVN. Preparing quarterly and annually financial statement following accounting standards and time schedule. Detail scheduling his/her work progress by months and years. Having the right to reject payment procedure implementation for inadequate application and against ineligible invoices. Reporting to manager, director of HPPMB 3 of signs of violation.

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SWECO International

ATD3

Job Description of Financial Department

Code: MC. P5.02 Version: 01 Issuing date:......

1. Position 2. Department 3. Report to 4. Authorized person 5. Required qualification

Cashier Financial Department Manager Accounting and financial officer of the same or higher position

Qualification: High school graduate Experience: - Minimum 1 year working as cashier - Undertaking payment and spending according to invoices approved by the accountant, managers or directors of the HPPMB3 and payment of salary to other staffs and officers. Other necessary skills:

6. Right and responsibility: - Working as the cashier to proceed cash withdrawal from bank using cheque (signed and sealed), check the value of the cheque and the amount received from bank and ensure safety of money transport from bank to the HPPMB3. - Undertaking payment and spending according to invoices approved by the accountant, managers or directors of the HPPMB3 - Collecting or spending according to exact amount on invoices; all invoices are clearly recorded into cashier's book. - Daily making updates into cashier's book and check it at the end of working day to ensure safety of safe. - Making the balance of payment and spending at the end of month between cashier's book and accounting book.

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Final Report Main Report Annex 7

SWECO International

Annex 7

LIST OF DOCUMENTS PREPARED FOR ISO 9001

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Project Management Board 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Quality policy. Quality objectives. Quality handbook. Document control procedures. Procedures of meetings by leaders for quality considerations. Quality evaluation procedure. Procedures of action taking for remedies and preventions. Work description sheet P2. Work description sheet P3. Work description sheet P4. Work description sheet P5. Work description sheet P6. Work description sheet P7. Car Management Procedures. HR Management Procedures. Procedures for setting salaries. Information management procedures. Asset management procedures. Procedures for establishing and managing capital construction investment plans for each project. Procedures of establishing, reviewing and approval of project unit rates. Procedures of establishing and approval of bidding plans. Bidding procedures. Procedures of contractor assignment. Procedures of management and payment of equipment and materials for each project. Procedures of management of office equipment. Schedule supervision Procedure. Instructions for establishment of general schedule and follow up. Instructions for management of contracts, treatment of delays and penalties. Procedure for review of ToR, survey and design and cost estimates. Procedure for review and approval of technical design. Procedure for review and approval of additional quantities and costs

Personnel Department.

Planning Department

Technical and Project Department

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32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61

Procedure for review and approval of adjusted investment cost and cost estimate. Procedure for control of non-conforming works. Procedure for review and approval of feasibility studies. Instructions for review of feasibility studies. Procedure for review and approval of detail design and cost estimates. Procedure for acceptance of civil works. Procedure for acceptance of completed erection works. Procedure for final acceptance of completed works. Supervision procedures. Instructions for recognition, delivery and management of documents. Instructions for solving non-conforming technicalities in the works. Instructions for handing over of bench marks. Instructions for supervision of warranty. Instructions for ensuring hygiene during project implementation. Procedure of initiative /improvement. Compensation procedures. Instructions for procedures of applying for land for the project area. Loss Survey instructions. Instructions for establishment of compensation plan Instructions for establishment and approval of criteria for compensation and resettlement. Instructions for establishment and approval of resettlement plans. Instructions for survey design and approval of resettlement sites. Instructions for clearance organising. Procedures for establishment, approval and execution of environment plan. Procedures for payment of the investment cost of the complete project. Procedures for payment of works quantities for each period (instalments) Procedures for payment of complete components. Procedures for inventories and disposal of assets. Procedures for programming the administrative cost. Instructions for payment of administrative cost.

Environment and Resettlement Department

Finance and Accounting Department

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Song Bung 4 Hydropower Project, TA No. 4625-VIE Final Report Energy Production

SWECO International

Table 1

Monthly Energy Production at Song Bung 4 Hydropower Project


Year 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Mean Min Max Jan 42,0 44,4 29,8 77,7 72,8 27,1 43,8 32,6 40,6 29,8 45,4 38,6 0,0 50,1 30,3 38,5 36,7 30,8 49,0 71,8 29,8 81,5 83,9 69,1 39,7 33,7 43,2 44,9 0,0 83,9 Feb 27,1 30,3 27,1 49,9 50,7 27,1 29,9 27,1 28,2 27,1 27,1 27,1 27,1 34,6 27,1 27,2 27,9 27,1 36,6 47,4 27,1 55,4 57,4 41,9 27,2 27,1 28,4 33,3 27,1 57,4 Mar 29,8 29,8 29,8 39,7 40,6 29,8 29,8 29,8 29,8 29,8 29,8 29,8 12,9 30,6 29,8 29,8 29,8 29,8 29,9 37,3 29,8 44,8 45,1 48,6 29,8 29,8 29,8 32,0 12,9 48,6 Apr 28,8 28,8 25,7 40,6 55,9 16,9 28,8 28,8 28,8 28,8 28,8 28,8 12,7 28,8 28,8 28,8 28,8 28,8 28,8 35,4 28,8 48,5 58,5 31,0 28,8 28,8 28,8 31,2 12,7 58,5 May 29,8 44,4 20,4 49,1 38,8 14,0 29,8 29,8 29,8 24,1 29,8 29,8 16,3 29,8 29,8 29,8 29,8 29,8 29,8 44,4 29,8 87,7 78,3 39,7 29,8 29,8 29,8 34,6 14,0 87,7 Jun 28,8 95,8 28,8 65,8 42,8 23,1 31,5 28,8 28,8 28,8 28,8 28,8 10,7 28,8 28,8 33,3 28,8 28,8 28,8 30,7 25,5 67,4 52,2 34,5 28,8 28,8 30,3 35,1 10,7 95,8 Jul 41,1 40,3 29,8 46,6 30,3 29,8 29,8 29,8 29,8 26,9 29,8 29,8 14,1 29,8 29,8 34,6 29,8 29,8 29,8 29,8 29,8 36,1 47,1 29,8 29,8 29,8 35,9 31,8 14,1 47,1 Aug 32,3 47,4 62,3 36,9 29,8 29,8 29,8 29,8 29,8 25,4 12,5 29,8 16,2 29,8 29,8 29,8 29,8 29,8 29,8 29,8 29,8 40,1 61,0 69,0 29,8 29,8 71,9 35,2 12,5 71,9 Sep 91,6 41,1 99,8 40,6 61,2 28,8 28,8 28,8 28,8 26,1 8,1 28,8 12,5 28,8 28,8 45,9 34,0 28,8 50,2 46,4 28,8 40,3 53,7 39,4 76,0 57,4 66,8 42,6 8,1 99,8 Oct 67,2 59,6 108,5 90,0 51,4 28,6 66,8 60,2 55,1 32,6 63,4 29,8 70,8 45,4 76,2 82,6 62,3 78,7 101,4 69,5 66,4 73,6 93,1 65,4 90,1 84,4 63,5 68,0 28,6 108,5 Nov 96,6 67,2 106,9 110,3 60,0 91,5 88,6 91,8 39,6 92,8 67,3 16,7 97,1 51,8 85,7 59,5 67,7 104,3 108,9 58,7 90,0 108,7 99,2 71,3 95,7 77,8 66,8 80,5 16,7 110,3 Unit: GWh Dec Mean 87,2 602,2 33,7 562,9 98,5 667,2 107,7 754,7 29,8 563,9 67,6 414,0 60,7 498,0 77,3 494,4 56,4 425,3 39,1 411,3 38,5 409,3 0,0 317,7 66,2 356,7 57,2 445,4 61,3 486,0 87,1 526,8 63,5 468,7 88,3 534,7 101,9 624,7 43,5 544,5 92,6 508,1 106,5 790,7 102,9 832,3 76,5 616,2 59,9 565,4 66,8 523,9 60,6 555,9 67,8 0,0 107,7 537,1

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Table 2 1

SONG BUNG 4 HYDROPOWER PROJECT


TENTATIVE COST ESTIMATE
Full Supply Level: 222.5 m Minimum Operating Level: 195 m Installed Capacity: 156 MW
No. STRUCTURE AND PAY ITEM UNIT QUANTITY UNIT RATE USD COST MUSD

A A1

PREPARATORY WORKS Permanent Access Roads New Road Relocation of Highway 14D Direct Cost Permanent Access Roads Site Preparations Levelling of Sites Electrical and Mechanical Works Communications Temporary Houses for EVN Direct Cost Site Preparations Contingencies for Preparatory Works TOTAL COST PREPARATORY WORKS CIVIL WORKS Preliminary Works Service Roads Auxiliary Works Clearing and Stripping Excavation Soil Excavation Rock Mass Concrete Structural Concrete, Open-air, M=250, pump Structural Concrete, Open-air, M = 200, head cover Formwork Tunnel Excavation, Access Tunnel Filter Rockbolts Shotcrete Earthfill Rockfill Embankment Surface Grouting Steel Ribs Steel Reinforcement, Surface Ankerbolts Steelnet Miscellaneous Direct Cost Preliminary Works Dam Clearing and Stripping Excavation Soil Excavation Rock Surface Grouting Backfill Rock RCC Mass Concrete Structural Concrete, M = 250, open-air Formwork Steel Reinforcement, Open-air Miscellaneous Direct Cost Dam

km

13.6

FS FS

7.20 9.30 16.50

A2

FS FS FS FS % of A1-A2 10

A B B1

0.35 2.57 0.33 1.85 5.10 2.16 23.76

m 3 m 3 m 3 m 3 m 3 m 2 m 3 m 3 m Ton 2 m 3 m 3 m m Ton Ton m 2 m % of B1

3,923 34,978 26,972 419 10,826 2,815 33,587 11,681 1,050 1.22 9,295 56,690 79,380 2,070 19.24 616 225 4,004 10

FS FS 0.1 1.3 5.0 38 62 62 3.3 30.0 10 979 10.6 1.4 3.0 63 950 627 12.5 15

1.49 2.29 0.00 0.04 0.13 0.02 0.67 0.17 0.11 0.35 0.01 0.00 0.10 0.08 0.24 0.13 0.02 0.39 0.00 0.06 0.63 6.94

B2

m2 3 m 3 m m 3 m 3 m 3 m 3 m 2 m Ton % of B2

127,183 1,089,691 71,586 16,307 10,131 301,060 1,959 85,325 1,567 4,693 5

0.1 1.3 5.4 63 3.0 36 38 57 4.7 627

0.02 1.41 0.39 1.03 0.03 10.74 0.07 4.87 0.01 2.94 1.08 22.58

Table 2 2
No. B3 STRUCTURE AND PAY ITEM Spillway Clearing and Stripping Excavation Soil Excavation Rock Backfill Rock Surface Grouting Mass Concrete RCC Structural Concrete,M=300, open-air Structural Concrete, M =250, open-air Formwork Steel Reinforcement, Open-air Miscellaneous Direct Cost Spillway Waterways Clearing and Stripping Excavation Soil Excavation Rock Structural Concrete, Surface, M= 200 Steel Reinforcement, Surface Formwork Underground Grouting Tunnel Excavation, Headrace Tunnel Excavation, Penstock Tunnel Lining Shaft Excavation Surge Tank Raise Boring Penstock and Surge Tank Rockbolts Shotcrete, cm=10 Shaft Lining Steel Reinforcement, Underground Steel Ribs Ankerbolts Steelnet Miscellaneous Direct Cost Waterways Power Station Clearing and Stripping Excavation Soil Excavation Rock Mass Concrete Structural Concrete, Surface, M= 200, pump Steel Reinforcement, Surface Backfill Earth Structural Concrete, Surface, M=250 Formwork Operation Building Other Works Miscellaneous Direct Cost Power Station Switchyard Clearing and Stripping Excavation Soil Excavation Rock Backfill Earth Structural Concrete, M= 200 Formwork Mass concrete Steel Reinforcement, Open air Miscellaneous Direct Cost Switchyard Contingencies for Civil Works TOTAL COST CIVIL WORKS TOTAL COST PREPATATORY WORKS AND CIVIL WORKS UNIT QUANTITY UNIT RATE USD 0.1 1.3 5.4 3.0 63 38 36 67 57 4.7 627 COST MUSD 0.00 0.06 0.16 0.01 0.82 0.04 10.73 2.82 3.52 1.31 3.32 1.14 23.95 0.00 0.68 1.33 1.33 0.69 0.25 0.61 6.24 0.39 7.33 0.59 0.20 0.12 0.51 0.41 2.73 0.26 0.22 0.54 2.44 26.88

m 3 m 3 m 3 m m 3 m 3 m 3 m 3 m m2 Ton % of B3

14,763 45,670 30,267 2,735 13,057 1,168 301,128 42,094 61,842 279,324 5,292 5

B4

m 3 m 3 m m3 Ton 2 m m 3 m 3 m 3 m 3 m m Ton 2 m 3 m Ton Ton m 2 m % of B4

17,200 427,465 254,389 22,612 1,107 59,470 12,526 207,973 9,726 85,239 10,876 100 119 35,075 4,678 3,211 270.40 17,892 35,075 10

0.1 1.6 5.2 59 627 4.2 49 30.0 40.0 86 54 2,000 979 14.4 88 850 950 12.5 15.4

B5

m2 3 m 3 m 3 m 3 m Ton 3 m 3 m 2 m

19,291 67,477 130,797 1,180 550 2,343 22,435 35,714 96,319

0.1 1.3 5.0 38 61 627 1.5 57 3.3 FS FS

% of B5

15

0.00 0.09 0.65 0.04 0.03 1.47 0.03 2.04 0.32 0.49 0.03 0.78 5.98

B6

m 3 m 3 m 3 m 3 m 2 m 3 m Ton % of B6

33,788 140,114 53,128 71,897 132 368 26 10 5

0.1 1.3 5.2 1.5 61 3.3 38 627

0.00 0.18 0.28 0.11 0.01 0.00 0.00 0.01 0.03 0.62 8.69 95.63 119.39

% of B1-B6

10

B A+B

Table 2 3
No. ITEM UNIT QUANTITY COST MUSD

C C1 C2

ELECTRICAL AND MECHANICAL WORKS Hydromechanical Equipment Power Station Epuipment Direct Costs Electrical and Mechanical Works Contingencies for Electrical and Mechanical Works TOTAL COST ELECTRICAL AND MECHANICAL WORKS TRANSMISSION (NOT INCLUDED) Transmission Lines,220 kV, Double Circuit, AC 300 Substation Direct Cost Transmission Contingencies for Transmission TOTAL COST TRANSMISSION TOTAL COST ELECTROMECHANICAL WORKS AND TRANSMISSION % of C1-C2

FS FS

7.36 32.68 40.04 2.00 42.04

C D

km

FS FS

5.61 1.20 6.81 0.48 7.29 49.33

% of D

D C+D

No.

ITEM

UNIT

QUANTITY

COST MUSD

E E1

ENVIRONMENTAL AND SOCIAL COSTS Environmental Management Costs Direct Costs Environmental Management Costs, Including Contingencies Resettlement and Social Mitigation Costs Direct Costs Social Mitigation Costs, Including Contingencies TOTAL ENVIRONMENTAL AND SOCIAL COSTS

LS

EIA

0.62

E2

LS

REMDP

19.83 20.45

No.

ITEM

UNIT

QUANTITY

COST MUSD 12.52

ENGINEERING AND ADMINISTRATION INCL. CONTINGENCIES

FS

No.

ITEM

UNIT

QUANTITY

COST MUSD

G G1 G2 G

IMPLEMENTATION SUPPORT INCLUDING CONTINGENCIES Implementation Supvervision Comsultant Independent Monitoring Services TOTAL IMPLEMENTATION SUPPORT

LS LS

4.95 0.15 5.10

No. H

ITEM TOTAL COST

UNIT A+B+C+D+E+F+G

QUANTITY -

COST MUSD 206.79

Power Demand Forecast-Master Plan VI


Whole Country

Table 3
Page 1

Years Works

2005 GWh

2010 GWh

2015 GWh

2020 GWh

2025 GWh

Low Scenario
Agriculture, Forestry, Aquaculture Industry and Construction Trade, Hotel and Restaurant Public & Management Others Commercial Electricity Transmission & Distribution Loss Self use Generation Max Capacity (MW) Per capita (kWh/cap.) 658 20909 2022 20173 1920 45682 1.44 45.77 4.43 44.16 4.20 100 12.0 2.7 1168 44055 5636 36042 5047 91948 1.27 47.91 6.13 39.20 5.49 100 10.8 3.0 1443 73391 9292 53838 8935 146898 0.98 49.96 6.33 36.65 6.08 100 9.6 3.6 1716 111653 14511 73751 14802 216433 0.79 51.59 6.70 34.08 6.84 100 8.5 4.0 2065 163798 22410 98129 22109 308511 0.67 53.09 7.26 31.81 7.17 100 7.5 4.2

53567 9512 549

106669 18513 1048

169238 28671 1579

247352 40922 2189

349390 57804 2997

Base Scenario
Agriculture, Forestry, Aquaculture Industry and Construction Trade, Hotel and Restaurant Public & Management Others Commercial Electricity Transmission & Distribution Loss Self use Generation Max Capacity (MW) Per capita (kWh/cap.) 658 20909 2022 20173 1920 45682 1.44 45.77 4.43 44.16 4.20 100 12.0 2.7 1229 46325 6168 38042 5347 97111 1.27 47.70 6.35 39.17 5.51 100 10.8 3.0 1624 81559 10528 59777 11472 164961 0.98 49.44 6.38 36.24 6.95 100 9.6 3.6 2061 131066 17319 85629 21185 257260 0.80 50.95 6.73 33.28 8.24 100 8.5 4.0 2611 199296 27550 119109 32595 381160 0.68 52.29 7.23 31.25 8.55 100 7.5 4.2

53567 9512 549

112658 19553 1106

190047 32196 1774

294012 48642 2629

431664 71416 3703

D:\FINAL DEC 2006-NO TRACKS\Main Report\Demand Forcast.doc

Power Demand Forecast-Master Plan VI


Whole Country

Table 3
Page 2

Years Works

2005 GWh

2010 GWh

2015 GWh

2020 GWh

2025 GWh

High Scenario
Agriculture, Forestry, Aquaculture Industry and Construction Trade, Hotel and Restaurant Public & Management Others Commercial Electricity Transmission & Distribution Loss Self use Generation Max Capacity (MW) Per capita (kWh/cap.) 658 20909 2022 20173 1920 45682 1.44 45.77 4.43 44.16 4.20 100 12.0 2.7 1272 48201 6354 39656 5665 101148 1.26 47.65 6.28 39.21 5.60 100 10.8 3.0 1672 84958 10828 62412 12485 172354 0.97 49.29 6.28 36.21 7.24 100 9.6 3.6 2109 135398 17719 88692 23643 267561 0.79 50.60 6.62 33.15 8.84 100 8.5 4.0 2658 204149 28750 123089 35741 394388 0.67 51.76 7.29 31.21 9.06 100 7.5 4.2

53567 9512 549

117341 20365 1152

198565 33639 1853

305784 50590 2734

446645 73894 3872

D:\FINAL DEC 2006-NO TRACKS\Main Report\Demand Forcast.doc

Power Demand Forecast-Master Plan VI


Central Region
Years Works 2005 GWh % 2010 GWh % 2015 GWh % 2020 GWh % 2025 GWh

Table 3
Page 3

Low Scenario
Agriculture, Forestry, Aquaculture Industry and Construction Trade, Hotel and Restaurant Public & Management Others Commercial Electricity Capacity (MW) 84.9 1722.6 175.0 2391.4 207.0 4580.9 986 1.85 37.60 3.82 52.20 4.52 100 166.2 3718.4 492.5 4318.6 545.0 9240.7 1938 1.80 40.24 5.33 46.73 5.90 100 218.6 6427.2 827.5 6340.7 904.3 14718.3 3005 1.48 43.67 5.62 43.08 6.14 100 279.4 10619.8 1414.1 8871.9 1536.8 22722.0 4495 1.23 46.74 6.22 39.05 6.76 100 360.1 17171.4 2202.0 12358.6 2584.7 34676.8 6798 1.04 49.52 6.35 35.64 7.45 100

Base Scenario
Agriculture, Forestry, Aquaculture Industry and Construction Trade, Hotel and Restaurant Public & Management Others Commercial Electricity Capacity (MW) 84.9 1722.6 175.0 2391.4 207.0 4580.9 986 1.85 37.60 3.82 52.20 4.52 100 175.9 3988.4 549.4 4579.4 585.7 9878.6 2063 1.78 40.37 5.56 46.36 5.93 100 254.7 7398.6 1004.7 7306.8 1277.0 17241.7 3502 1.48 42.91 5.83 42.38 7.41 100 347.0 12890.0 1785.6 10768.6 2413.0 28204.3 5551 1.23 45.70 6.33 38.18 8.56 100 470.5 21736.8 2900.1 15507.1 4196.3 44810.7 8741 1.05 48.51 6.47 34.61 9.36 100

High Scenario
Agriculture, Forestry, Aquaculture Industry and Construction Trade, Hotel and Restaurant Public & Management Others Commercial Electricity Capacity (MW) 84.9 1722.6 175.0 2391.4 207.0 4580.9 986 1.85 37.60 3.82 52.20 4.52 100 182.0 4149.9 565.8 4773.6 620.6 10291.9 2149 1.77 40.32 5.50 46.38 6.03 100 262.1 7707.0 1023.2 7617.2 1412.2 18021.8 3661 1.45 42.76 5.68 42.27 7.84 100 355.0 13316.1 1805.1 11130.1 2742.0 29348.3 5776 1.21 45.37 6.15 37.92 9.34 100 479.1 22266.1 3020.7 16001.5 4618.1 46385.4 9048 1.03 48.00 6.51 34.50 9.96 100

D:\FINAL DEC 2006-NO TRACKS\Main Report\Demand Forcast.doc

Power Demand Forecast-Master Plan VI


Northern Region
Years Works 2005 GWh % 2010 GWh % 2015 GWh % 2020 GWh % 2025 GWh

Table 3
Page 4

Low Scenario
Agriculture, Forestry, Aquaculture Industry and Construction Trade, Hotel and Restaurant Public & Management Others Commercial Electricity Capacity (MW) 359.1 7160.2 541.1 8720.0 767.7 17548.0 4013 2.05 40.80 3.08 49.69 4.37 100 622.6 15985.5 1567.2 15588.8 2061.6 35825.8 7865 1.74 44.62 4.37 43.51 5.75 100 778.1 27322.1 2924.7 24567.2 3780.1 59372.1 12522 1.31 46.02 4.93 41.38 6.37 100 911.6 42158.7 4818.3 33684.4 6373.3 87946.3 17806 1.04 47.94 5.48 38.30 7.25 100 1082.0 62200.8 7791.8 44898.7 9592.6 125565.9 25193 0.86 49.54 6.21 35.76 7.64 100

Base Scenario
Agriculture, Forestry, Aquaculture Industry and Construction Trade, Hotel and Restaurant Public & Management Others Commercial Electricity Capacity (MW) 359.1 7160.2 541.1 8720.0 767.7 17548.0 4013 2.05 40.80 3.08 46.69 4.37 100 647.0 16430.5 1667.6 16502.9 2146.3 37394.3 8174 1.73 43.94 4.46 44.13 5.74 100 830.2 29666.0 3086.1 26023.7 4626.5 64232.5 13480 1.29 46.19 4.80 40.51 7.20 100 1037.1 48309.2 5360.1 37264.4 8741.4 100712.2 20285 1.03 47.97 5.32 37.00 8.68 100 1294.7 74373.4 9080.9 52034.2 13285.8 150068.9 29959 0.86 49.56 6.05 34.67 8.85 100

High Scenario
Agriculture, Forestry, Aquaculture Industry and Construction Trade, Hotel and Restaurant Public & Management Others Commercial Electricity Capacity (MW) 359.1 7160.2 541.1 8720.0 676.7 17548.0 4013 2.05 40.80 3.08 49.69 4.37 100 669.4 17096.0 1718.0 17202.7 2274.1 38960.2 8517 1.72 43.88 4.41 44.15 5.84 100 854.5 30902.4 3150.8 27139.1 5096.1 67143.0 14091 1.27 46.02 4.69 40.42 7.59 100 1061.1 49906.0 5415.3 38518.2 9901.5 104802.1 21109 1.01 47.62 5.17 36.75 9.45 100 1318.4 76184.5 9336.4 53544.7 14986.4 155370.4 31017 0.85 49.03 6.01 34.46 9.65 100

D:\FINAL DEC 2006-NO TRACKS\Main Report\Demand Forcast.doc

Power Demand Forecast-Master Plan VI


Southern Region
Years Works 2005 GWh % 2010 GWh % 2015 GWh % 2020 GWh % 2025 GWh

Table 3
Page 5
%

Low Scenario
Agriculture, Forestry, Aquaculture Industry and Construction Trade, Hotel and Restaurant Public & Management Others Commercial Electricity Capacity (MW) 213.8 12023.8 1306.0 9062.2 945.7 23551.4 4682 0.91 51.05 5.55 38.48 4.02 100 378.8 24351.0 3586.7 16134.9 2440.2 46891.8 9041 0.81 51.93 7.65 34.41 5.20 100 446.1 39641.6 5539.7 22930.2 4250.3 72807.9 13605 0.61 54.45 7.61 31.49 5.84 100 525.2 58874.4 8278.3 31194.9 6891.5 105764.3 19439 0.50 55.67 7.83 29.49 6.52 100 623.3 84425.9 12416.3 40872.0 9931.4 148268.8 27006 0.42 56.94 8.37 27.57 6.70 100

Base Scenario
Agriculture, Forestry, Aquaculture Industry and Construction Trade, Hotel and Restaurant Public & Management Others Commercial Electricity Capacity (MW) 213.8 12023.8 1306.0 9062.2 945.7 23551.4 4682 0.91 51.05 5.55 38.48 4.02 100 406.3 25906.1 3951.2 16960.1 2614.6 49838.4 9564 0.82 51.98 7.93 34.03 5.25 100 539.5 44494.4 6436.8 26446.7 5568.9 83486.3 15521 0.65 53.30 7.71 31.68 6.67 100 677.2 69866.8 10172.7 37596.0 10030.9 128343.7 23467 0.53 54.44 7.93 29.29 7.82 100 845.4 103186.0 15568.7 51567.4 155112.5 186280.0 33759 0.45 55.39 8.36 27.68 8.11 100

High Scenario
Agriculture, Forestry, Aquaculture Industry and Construction Trade, Hotel and Restaurant Public & Management Others Commercial Electricity Capacity (MW) 213.8 12023.8 1306.0 9062.2 945.7 23551.4 4682 0.91 51.05 5.55 38.48 4.02 100 420.4 26955.5 4070.5 17679.3 2770.2 51895.9 9959 0.81 51.94 7.84 34.07 5.34 100 555.3 46348.9 6654.0 27655.3 5976.2 87189.7 16210 0.64 53.16 7.63 31.72 6.85 100 692.9 72176.0 10498.7 39043.8 109999.5 133411.0 24393 0.52 54.10 7.87 29.27 8.24 100 860.9 105698.7 16393.2 53543.0 16136.1 192631.8 34910 0.45 54.87 8.51 27.80 8.38 100

D:\FINAL DEC 2006-NO TRACKS\Main Report\Demand Forcast.doc

Song Bung 4 Hydropower Project, TA No. 4625-VIE Final Report Existing Generating Capacity

SWECO International

Table 4

Existing Generating Capacity


Existing Thermal Power Plants
Region Northern Plant Pha Lai 1 Pha Lai 2 Ninh Binh Uong Bi Na Duong Total Southern Thu Duc Thu Duc Ba Ria Can Tho Can Tho Phu My 1 Phu My 2-1 Phu My 2.2 Phu My 3 Phu My 4 Hiep Phuoc Vedan AMATA Formosa Total Various Diesel Various Diesel Gas C/C Oil Gas C/C C/C C/C C/C C/C Oil Oil Oil Coal HCM City HCM City Vung Tau Can Tho Can Tho Vung Tau Vung Tau Vung Tau Vung Tau Vung Tau HCM City HCM City Type Coal Coal Coal Coal Coal Location Hai Duong Hai Duong Ninh Binh Quang Ninh Lang Son Installed Capacity MW 4x110=440 2x300=600 4x25=100 55+50=105 2x55=110 1,355 33+2x66=165 23.4+15+2x37.5=113.4 2x23.4+6x37.5+58.1+59.1=389 1x33=33 2x38.5+2x39.1=155.2 3x248+370=1,114 2x140+2x144+170+168=906 3x240=720 3x240=720 3x150=450 3x125=375 1x72=72 1x13=13 3x50=150 5,376 245 1966-1972 1988-1992 1992-2002 1975 1996-1999 2002 2002 2002 2004 2004 IPP IPP IPP IPP Year of Commissioning 1985 2001 1974 1970 2004

TOTAL

6,976

D:\FINAL DEC 2006-NO TRACKS\Main Report\Existing Plants.doc

04/09/2007

Page 1

Song Bung 4 Hydropower Project, TA No. 4625-VIE Final Report Existing Generating Capacity

SWECO International

Existing Hydropower Plants


Region Northern Plant Thac Ba Hoa Binh Total Central Vinh Son Song Hinh Yali Total Southern Da Nhim Tri An Thac Mo Ham Thuan Da Mi Can Don Total Small Hydro Various TOTAL Various Da Nhim Dong Nai Be La Nga La Nga Be 155 2,547 1,226 523 12 80 Con Hinh Se San 120 323 779 River Chay Da Active Storage Mm3 1,560 5,650 Installed Capacity, MW 3x36=108 8x240=1,920 2,028 2x33=66 2x35=70 4x180=720 856 4x40=160 4x100=400 2x75=150 2x150=300 2x87.5=175 2x39=78 1,263 51 4,198 1963-1964 1988-1989 1985 2001 2001 2004 1994 2000 2001 Year of Commissioning 1970-1973 1989-1994

D:\FINAL DEC 2006-NO TRACKS\Main Report\Existing Plants.doc

04/09/2007

Page 2

Table 5

Power Projects Considered in Master Plan VI and Scheduled Commissioning


Hydropower Projects
No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Plant Name Nam Mu Na Loi Suoi Sap North Total 2006 Se San 3 Se San 3A Central Total 2006 Srokphumieng South Total 2006 Nam Dong Minh Luong Huong son 1 North Total 2007 Quang Tri Hchan Hmun PleiKrong Ea Rong Rau Central Total 2007 Dai Ninh Bac Binh South Total 2007 Tuyen Quang Ban Ve Na Le Thai An Van Chan Ngoi Bo Coc San Seo Chung Ho Ngoi Phat North Total 2008 Song Ba Ha A Vuong Buon Kuop Buon Tua Srah Binh Dien Ea Krong Hnang Co Bi Da Dang Central Small Hydro 1 Central Total 2008 Dong Nai 3 South Total 2008 Ban Coc Capacity MW 11 9 16 36 260 100 360 54 54 22 22 18 62 70 27 110 28 235 300 34 334 342 320 90 44 35 35 40 22 76 1004 250 210 280 85 44 64 48 16 55 1052 180 180 30 Plan V Year Plan VI Year 2006 2006 2006 2006 2006 2006 2007 2007 2007 2007 2007 2007 2008 2008 2009 2009 2007 2007 2007/2008 2007 2007 2007 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2009 Current Status Com. Com. Com. Under construction Under construction Under construction Planned Planned Under construction Planned Under construction Planned Under construction Under construction Under construction Under construction Start const. 05/06 Planned Planned Planned Planned Planned Planned Under construction Under construction Under construction Under construction Start const. 05/06 Start const. 05/06 FS Planned Planned Under construction Start const. 06

2006 2006 2006

2008 2008 2008 2008 2008 2008

2008

Page 1

North Total 2009 36 Se San 4 37 Sre Pok 3 38 An Khe Ka nak 39 Dak Tik 40 La Ngau 41 Central Small Hydro 2 Central Total 2009 42 Thac Mo (extend) South Total 2009 43 Cua Dat 44 Ban Chat 45 Song Hieu 46 Chu Linh 47 Nhac Han 48 Nam Chien North Total 2010 49 Dam Bri 50 Song Tranh 2 51 Dak Rinh 52 Song Con 2 Central Total 2010 53 Dong Nai 4 South total 2010 54 Son La 55 Huoi Quang North Total 2011 56 Song Bung 2 57 Song Bung 4 58 Central Small Hydro 3 Central Total 2011 59 Serepok 4 60 Thuong Kon Tum Central Total 2012 61 Dong Nai 2 62 Dong Nai 5 63 Duc Xuyen South Total 2012 64 Dak Mi 4 65 Dak Mi 1 Central Total 2013 66 Lai Chau 67 Hoi Xuan North Total 2014 68 Song Bung 5 Central Total 2014 69 Hua Na 70 Khe Bo 71 Ta Thang 72 North Small Hydro North Total 2015 73 Nho que 2&3 North total 2016

30 360 220 173 72 38 84 947 75 75 97 200 53 30 45 192 617 72 160 100 70 402 340 340 2400 560 2960 128 165 100 393 28 220 248 80 140 52 272 196 210 406 1200 75 1275 85 85 180 68 47 100 395 230 230

2010 2009 2009 2009

2009 2009 2009 2009 2009 2009 2009 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2011/2013 2011 2011 2011 2011 2012 2012 2012 2012 2012 2013 2013 2014 2014 2014 2015 2015 2015 2015 2016

Under construction Start const. 05/06 Start const. 05/06 Start const. 05/06 Planned Planned Start const. 05/06 Under construction Start const. 05/06 Planned Planned Planned Start const. 05/06 Under construction Start const. 05/06 Start const. 05/06 Start const. 05/06 Under construction Start const. 05/06 PFS/FS PFS/FS PFS/FS Planned Planned FS PFS/FS PFS/FS PFS/FS PFS/FS PFS/FS PFS/FS Planned Planned PFS/FS Planned Planned Planned Planned

2009 2010 2010 2010 2010 2009 2010 2010 2010 2010 2010/2012

Page 2

74 75 76 77 78 79

Bac Me Trung Son Ban Uon 3 North total 2017 Ban Uon Bao Lac Nam Na Total out Country total up to 2025

170 310 80 560 280 75 300 655 12552

2017 2017 2017

Planned Planned Planned PFS/FS-out Out Out

Page 3

Coal-fired Power Projects


Plant Name No 1 2 3 4 North Uong Bi extended1 Cao Ngan North total-2006 Hai Phong I#1 Son ong North total-2008 Uong Bi extended2 Ninh Binh extended Hai Phong I#2 Cam Pha I Quang Ninh 1 Quang Ninh 2 Quang Ninh 3 Quang Ninh 4 Mao Khe 1 North total-2009 Central Nong Son Central total-2009 North Hai Phong II #1 Hai Phong II #2 Cam Pha II Mong Duong #1 North total-2010 Mao Khe 2 Nghi Son #1 Mong Duong #2 Vung Ang I #1 North total-2011 Nghi Son #2 North total-2012 South Soc Trang 1 Soc Trang 2 South total -2015 North Mong Duong II #1 North total-2015 Capacity MW 300 100 400 300 200 500 300 300 300 300 300 300 300 300 200 2600 30 30 300 300 300 500 1400 200 300 500 600 1600 300 300 600 600 1200 500 500 2013 Plan V 2005 2005 2006 Plan VI 2006 2006 2008 2008 Current Status

Finishing Finishing Start construction Start construction FS/Gov.11952009 FS FS FS/Gov.11952009 Gov.1195-2009 Gov.1195-2009 Gov.1195-2009

5 6 7 8 9 10 11 12 13

2009 2009 2007 2007 2008 2011 2012

2009 2009 2009 2009 2009 2009 2009 2009 2009

14

2009

FS

15 16 17 18

2010 2010 2010 2010

Gov.1195-2009 Gov.1195-2009 FS/Gov.11952009 FS/Gov.11952010

19 20 21 22 23

2009 2014 2017 2010

2011 2011 2011 2011 2012

FS Gov.1195-2010

24 25

2015 2015

26

2016

Gov.1195-2010

Page 4

27 28

29 30 31 32 33

34 35

36 37 38

39 40

41

42 43

44 45 46 47 48 49 50 51 52

53 54

Mong Duong II #2 Vung Ang I #2 North total-2017 South Tra Vinh 1 Tra Vinh 2 Tra Vinh 3 Tra Vinh 4 Soc Trang 3 South total - 2017 North Nghi Son II #1 Nghi Son II #2 North total-2018 South Soc Trang 4 Soc Trang 5 Tien Giang 1 South total North Vung Ang II #1 Vung Ang II #2 North total-2019 Central Central 1 Central total-2019 South Tien Giang 2 Tien Giang 3 South total-2019 North Nghi Son III #1 Nghi Son III #2 Vung Ang III #1 Vung Ang III #2 North total-2020 New domestic #1 New domestic #2 North total-2021 New domestic #3 New domestic #4 Import coal #1 North total-2022 Central Central 2 Centre total 2022 Import coal #2 North total-2023

500 600 1100 600 600 600 600 600 30000 600 600 1200 600 600 600 1800 600 600 1200 600 600 600 600 1200 600 600 600 600 2400 600 600 1200 600 600 1000 2200 600 600 1000 1000

2017 2017

Gov.1195-2010 Gov.1195-2010

2017 2017 2017 2017 2017

2018 2018

2018 2018 2018

2018

2019 2019

2019

2019 2019

2020 2020 2020 2020 2021 2021 2022 2022 2022

2022 2023

Page 5

55 56 57 58

59

60

61 62

63

64

South South 1000 #1 (Binh Thuan) South 1000 #2 (Binh Thuan) South total 2023 Import coal #3 Import coal #4 North total-2024 Central Central 3 Central total South South 1000 #3 (Binh Thuan) South central 2024 North Import coal #5 Import coal #6 North total-2025 Central Central 4 Central total South South 1000 #4 South total Country total-up to 2025

1000 1000 2000 1000 1000 1000 600 600 1000 1000 1000 1000 2000 600 600 1000 1000 33,230

2023 2023 2024 2024

2024

2024

2025 2025

2025

2025

Page 6

Gas and Oil-fired Power Projects

Plant Name No 1 2 3 4 5 6 7 8 9 10 South Phu My extended South total-2006 Phu My fertilizer GT-GE 1,2,3,4 Ca Mau 1 South total-2007 Nhon Trach I CC 450MW O Mon III Ca Mau 2 South total-2008 O Mon I #1 South total-2009 O Mon I #2 O Mon II (1,2,3) South total-2010 Nhon Trach II #1 CC Nhon Trach II #2 CC O Mon IV South total-2012 Binh Thuan I CC Nhon Trach III CC South total-2013 Binh Thuan II CC South total-2014 O Mon V (New CC#3) Nhon Trach IV CC South total-2015 Cai Lay I CC Cai Lay II CC South total-2016 Central Central new Central total 2020 New 6 CC South total-2020 New 7 CC South total-2021 Country total-up to 2025

Capacity MW 100 100 20 428 720 1368 450 660 720 1830 300 300 300 720 1020 330 330 720 1380 720 720 1440 720 720 720 720 1440 720 720 1440 720 720 720 720 720 720 11,358

Plan V

Plan VI

Current Status

2006 2007 2007 2007 2008 2008 2008 2009 2010 2010

FS/Gov. 1195-2006

2005/2006

2011/2012

FS/Gov. 1195-2008 Gov.1195-07/08

2005 2006 2009/2010

FS

PFS/Gov.11952009

11 12 13 14 15 16 17 18 19 20

2007 2008

2012 2012 2012 2013 2013 2014 2015 2015 2016 2016

2009

2010

21 22

2020 6x720,2013/2 020 2020

23

2021 Added from 2006 to 2025

Page 7

Candidates for Power Import

No

Plant Name North Import from China-110kV220kV L1. Nam Mo Import from China 1 Import from China 2 Import from China 3 Import from China 4 Import from Lao (Nam Theun) Import from China 5 Import from China 6 Import from China 7 Import from China 8 North total up to 20025 Central L4. Xekaman 3 L6. Sekong 4 Xe Kaman 1 L3. Nam Kong 1 L7. Sekong 5 Import from Cambodia (Ha Sesan 3) Central total up to 2025 South Import from Cambodia (H Srepok2) Import from Cambodia (H Se San2) South total up to 2025 Country total up to 2025

Capacity MW 450 95 250 250 250 250 382 250 250 250 250 2927 248 464 396 229 388 375 2100 222 207 429 5456

Plan V

Plan VI

Current Status Gov. 11952007

1 2 3 4 5 6 7 8 9 10 11

2007 2008 2019 2019 2019 2019 2011/2015 2019 2019 2019 2019 2011 2015 2016 2016 2016 2017 2017 2017 2018 2018

12 13 14 15 16 17

2011/2015 2011/2015 2011/2015 2011/2015 2011/2015

2010 2013 2016 2016 2016 2016

18 19

2019 2019

2016 2016

Page 8

Some Key Parameters of Thermal Power Projects Considered in Master Plan VI


Gas Technology (Fuel) CC Region Capacity Specific Investment cost (including IDC) Efficiency Fuel Consumption Life time Self use Fixed O&M cost Variable O&M cost Discount rate (CFR) HLV Fuel price in the basis year* Price increasing rate Levelized generation cost VS. load factor 30 40 50 60 70 80 90 Unit MW $/kW % Kcal/kW h Year % $/kW.ye ar $/MWh % % Kcal/kg $/unit %/year USc/kW h South (MBTU) 700 600 48 1792 25 2.5 21.6 0.90 10.0 11.0 8500 3.5 2.0 Gas turbin South (MBTU) 250 400 34 2529 20 2.5 15.4 4.40 10.0 11.7 8500 3.5 2.0 Gas South (MBTU) 300 900 38 2263 25 5.0 18.0 0.86 10.0 11.0 8500 3.5 2.0 Domestic Coal North (Tone) 300 1120 39.5 2177 30 7.0 33.6 0.15 10.0 10.6 5500 21.0 2.0 Coal Domestic Coal South (Tone) 300 1120 39.5 2177 30 7.0 33.6 0.15 10.0 10.6 5500 28.0 2.0 Import Coal South (Tone) 500 1000 40.0 2150 30 7.0 30.0 0.15 10.0 10.6 6500 45.0 2.0 (Tone) 250 400 34 2529 20 2.5 15.4 4.40 10.0 11.7 10000 391.0 2.0 (Tone) 300 800 38 2263 20 5.0 19.5 1.48 10.0 11.7 9900 220.0 2.0 (Mkcal) 1000 1740 37 2324 40 5.0 66.2 0.14 10.0 10.2 1.8 1.5 DO Oil FO Nuclear PWR

6.80 5.85 5.28 4.90 4.63 4.42 4.27

6.89 6.28 5.92 5.68 5.50 5.37 5.27

8.45 7.28 6.58 6.11 5.77 5.52 5.33

7.24 5.68 4.74 4.12 3.68 3.34 3.08

7.6 6.0 5.07 4.45 4.00 3.67 3.41

7.35 5.96 5.12 4.57 4.17 3.87 3.64

14.19 13.58 13.21 12.97 12.80 12.67 12.57

10.45 9.31 8.63 8.17 7.85 7.61 7.42

10.28 7.83 6.36 5.39 4.69 4.16 3.76

Page 9

Song Bung 4 Hydropower Project, TA No. 4625-VIE Final Report Main Report

SWECO International

Table 6 Forecast Profit and Loss Statement (in USD) for Song Bung 4 - 2008-2047
IAS Profit & Loss Account Revenue Sales of Electricity Cost of Sales O&M Monitoring costs Depreciation Foreign exchange losses/(gains) Hydro power tax Total Cost of Sales Operating Profit Finance Cost Profit Before Tax Profits tax Net Profit Dividend Retained profit M USD M USD M USD M USD M USD M USD M USD M USD M USD M USD M USD M USD M USD M USD 2007 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 2008 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 2009 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 2010 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 2011 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 2012 11,92 1,20 0,01 9,87 0,00 0,24 11,32 0,60 13,52 -12,92 0,00 -12,92 0,00 -12,92 2013 23,84 1,20 0,01 9,87 0,00 0,47 11,56 12,29 13,05 -0,77 0,00 -0,77 0,00 -0,77 2014 23,84 1,20 0,01 9,87 0,00 0,47 11,56 12,29 12,40 -0,12 0,00 -0,12 0,00 -0,12 2015 23,84 1,20 0,01 9,87 0,00 0,47 11,56 12,29 11,75 0,53 0,15 0,38 0,38 0,00 2016 23,84 1,20 0,01 9,87 0,00 0,47 11,56 12,29 11,10 1,19 0,33 0,85 0,85 0,00 2017 23,84 1,20 0,00 9,87 0,00 0,47 11,54 12,30 10,44 1,85 0,52 1,33 1,33 0,00 2027 23,84 1,20 0,00 9,87 0,00 0,47 11,54 12,30 4,75 7,55 2,11 5,44 5,44 0,00 2037 23,84 1,20 0,00 0,00 0,00 0,47 1,67 22,17 0,00 22,17 6,21 15,96 15,96 0,00 2047 23,84 1,20 0,00 0,00 0,00 0,47 1,67 22,17 0,00 22,17 6,21 15,96 15,96 0,00

D:\FINAL DEC 2006-NO TRACKS\Main Report\Profit and Loss.doc

04/09/2007

Song Bung 4 Hydropower Project, TA No. 4625-VIE Final Report Main Report

SWECO International

Table 7: Forecast Balance Sheets (in USD) for Song Bung 4 - 2008-2047
IAS Balance Sheet Assets Current Assets Cash Account Receivables Inventories Total Current Assets Non-Current Assets Net Fixed Assets Construction in Progress Total Non-Current Assets Total Assets 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2027 2037 2047

M USD M USD M USD M USD M USD M USD M USD M USD

0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00

0,00 0,00 0,00 0,00 0,00 20,49 20,49 20,49

0,10 0,00 0,00 0,10 0,00 66,65 66,65 66,75

0,44 0,00 0,00 0,44 0,00 126,87 126,87 127,31

0,21 0,00 0,00 0,21 0,00 246,76 246,76 246,97

-7,25 0,99 0,00 -6,26 236,89 0,00 236,89 230,63

-9,59 1,99 0,84 -6,77 227,02 0,00 227,02 220,26

-9,45 1,99 0,84 -6,62 217,15 0,00 217,15 210,53

-9,42 1,99 0,84 -6,60 207,28 0,00 207,28 200,69

-9,40 1,99 0,84 -6,57 197,41 0,00 197,41 190,84

-9,38 1,99 0,84 -6,55 187,54 0,00 187,54 180,99

2,79 1,99 0,84 5,62 88,84 0,00 88,84 94,45

20,91 1,99 0,84 23,74 0,00 0,00 0,00 23,74

20,91 1,99 0,84 23,74 0,00 0,00 0,00 23,74

Liabilities & Equity Current Liabilities M USD Trade & Other Payables Short-Term Loans M USD Current Portion of Long-Term B M USD Total Current Liabilities M USD Long-Term Borrowings M USD Total Liabilities M USD Equity EVN Contribution M USD Retained profit M USD Total Equity M USD

0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00 0,00

0,00 0,00 0,00 7,77 7,77 12,72 0,00 12,72 20,49

0,00 0,00 0,00 45,46 45,46 21,29 0,00 21,29 66,75

0,00 0,00 0,00 100,27 100,27 27,05 0,00 27,05 127,31

0,00 9,85 9,85 200,70 210,55 36,42 0,00 36,42 246,97

0,10 9,85 9,95 196,47 206,41 37,14 -12,92 24,22 230,63

0,10 9,85 9,95 186,71 196,66 37,29 -13,69 23,60 220,26

0,10 9,85 9,95 176,95 186,90 37,44 -13,81 23,64 210,53

0,10 9,85 9,95 167,10 177,05 37,44 -13,81 23,64 200,69

0,10 9,85 9,95 157,25 167,20 37,44 -13,81 23,64 190,84

0,10 9,85 9,95 147,41 157,35 37,44 -13,81 23,64 180,99

0,10 7,86 7,96 62,86 70,82 37,44 -13,81 23,64 94,45

0,10 0,00 0,10 0,00 0,10 37,44 -13,81 23,64 23,74

0,10 0,00 0,10 0,00 0,10 37,44 -13,81 23,64 23,74

Total Liabilities & Equity

M USD

D:\FINAL DEC 2006-NO TRACKS\Main Report\Profit and Loss.doc

04/09/2007

Song Bung 4 Hydropower Project, TA No. 4625-VIE Final Report Main Report

SWECO International

Table 8: Forecast Cash Flow Statements (in USD) for Song Bung 4- 2008-2047
IAS Cash Flow Cash Flows from Operating Activities Profit After Tax Adjustment for: Depreciation & Amortization Interest Expense Foreign Exchange Loss Subtotal Change in Working Capital
M USD M USD M USD M USD M USD M USD

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2027

2037

2047

0,00 0,00 0,00 0,00 0,00 0,00 0,00

0,00 0,00 0,00 0,00 0,00 0,00 0,00

0,00 0,00 0,00 0,00 0,00 0,00 0,00

0,00 0,00 0,00 0,00 0,00 0,00 0,00

0,00 0,00 0,00 0,00 0,00 0,00 0,00

-12,92 9,87 13,52 0,00 10,47 -0,89 9,58

-0,77 9,87 13,05 0,00 22,16 -1,83 20,32

-0,12 9,87 12,40 0,00 22,16 0,00 22,16

0,00 9,87 11,75 0,00 21,62 0,00 21,62

0,00 9,87 11,10 0,00 20,97 0,00 20,97

0,00 9,87 10,44 0,00 20,31 0,00 20,31

0,00 9,87 4,75 0,00 14,62 0,00 14,62

0,00 0,00 0,00 0,00 0,00 0,00 0,00

0,00 0,00 0,00 0,00 0,00 0,00 0,00

Net Cash Flows from Operating Activitie M USD Cash Flows from Investing Activities Acquisition of Fixed Assets and Cons M USD

0,00

-19,99

-44,00

-54,82

-109,72

0,00

0,00

0,00

0,00

0,00

0,00

0,00

0,00

0,00

Net Cash Flows from Investing Activities M USD Cash Flows from Financing Activities Cash Proceeds from Long-Term Borr Repayment of Loans Interest Expense Commitment fee Capital Injected (EVN)

0,00

-19,99

-44,00

-54,82

-109,72

0,00

0,00

0,00

0,00

0,00

0,00

0,00

0,00

0,00

M USD M USD M USD M USD M USD

0,00 0,00 0,00 0,00 0,00

7,77 0,00 -0,30 -0,19 12,72

37,70 0,00 -1,83 -0,34 8,57

54,80 0,00 -4,82 -0,58 5,75

110,28 0,00 -10,13 -0,04 9,38

5,61 -9,85 -13,52 0,00 0,72

0,09 -9,85 -13,05 0,00 0,15

0,09 -9,85 -12,40 0,00 0,15

0,00 -9,85 -11,75 0,00

0,00 -9,85 -11,10 0,00

0,00 -9,85 -10,44 0,00

0,00 -7,86 -4,75 0,00

0,00 0,00 0,00 0,00

0,00 0,00 0,00 0,00

Net Cash Flows from Financing Activitie M USD Net Increase in Cash Cash at Beginning of Year Cash at End of Year
M USD M USD M USD

0,00 0,00 0,00 0,00

19,99 0,00 0,00 0,00

44,10 0,10 0,00 0,10

55,16 0,34 0,10 0,44

109,49 -0,23 0,44 0,21

-17,04 -7,46 0,21 -7,25

-22,66 -2,34 -7,25 -9,59

-22,01 0,15 -9,59 -9,45

-21,60 0,02 -9,45 -9,42

-20,95 0,02 -9,42 -9,40

-20,29 0,02 -9,40 -9,38

-12,61 2,01 0,78 2,79

0,00 0,00 20,91 20,91

0,00 0,00 20,91 20,91

D:\FINAL DEC 2006-NO TRACKS\Main Report\Profit and Loss.doc

04/09/2007

Song Bung 4 Hydropower Project, TA No. 4625-VIE Final Report Main Report

SWECO International

Table 9 Forecast Profit and Loss Statement (in VND) for Song Bung 4 - 2008-2047

IAS Profit & Loss Account Revenue Sales of Electricity Cost of Sales O&M Monitoring costs Depreciation Foreign exchange losses/(gains) Hydro power tax Total Cost of Sales Operating Profit Finance Cost Profit Before Tax Profits tax Net Profit
bn VND bn VND bn VND bn VND bn VND bn VND bn VND bn VND bn VND bn VND bn VND bn VND bn VND bn VND

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2027

2037

2047

0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0

0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0

0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0

0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0

0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0

195,9 19,7 0,2 162,2 0,0 3,9 186,0 9,9 222,3 -212,4 0,0 -212,4 0,0 -212,4

391,9 19,7 0,2 162,2 0,0 7,8 189,9 201,9 214,5 -12,6 0,0 -12,6 0,0 -12,6

391,9 19,7 0,2 162,2 0,0 7,8 189,9 201,9 203,9 -2,0 0,0 -2,0 0,0 -2,0

391,9 19,7 0,2 162,2 0,0 7,8 189,9 201,9 193,2 8,7 2,4 6,3 6,3 0,0

391,9 19,7 0,2 162,2 0,0 7,8 189,9 201,9 182,4 19,5 5,5 14,0 14,0 0,0

391,9 19,7 0,0 162,2 0,0 7,8 189,8 202,1 171,7 30,5 8,5 21,9 21,9 0,0

391,9 19,7 0,0 162,2 0,0 7,8 189,8 202,1 78,0 124,1 34,7 89,3 89,3 0,0

391,9 19,7 0,0 0,0 0,0 7,8 27,5 364,3 0,0 364,3 102,0 262,3 262,3 0,0

391,9 19,7 0,0 0,0 0,0 7,8 27,5 364,3 0,0 364,3 102,0 262,3 262,3 0,0

Dividend
Retained profit

D:\FINAL DEC 2006-NO TRACKS\Main Report\Profit and Loss.doc

04/09/2007

Song Bung 4 Hydropower Project, TA No. 4625-VIE Final Report Main Report

SWECO International

Table 10: Forecast Balance Sheets (in VND) for Song Bung 4 - 2008-2047

IAS Balance Sheet Assets Current Assets Cash Account Receivables Inventories Total Current Assets Non-Current Assets Net Fixed Assets Construction in Progress Total Non-Current Assets Total Assets

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2027

2037

2047

bn VND bn VND bn VND bn VND bn VND bn VND bn VND bn VND

0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0

0,0 0,0 0,0 0,0 0,0 336,7 336,7 336,7

1,7 0,0 0,0 1,7 0,0 1095,5 1095,5 1097,2

7,2 0,0 0,0 7,2 0,0 2085,4 2085,4 2092,6

3,4 0,0 0,0 3,4 0,0 4056,0 4056,0 4059,4

-119,2 16,3 0,0 -102,9 3893,7 0,0 3893,7 3790,8

-157,7 32,7 13,8 -111,2 3731,5 0,0 3731,5 3620,3

-155,3 32,7 13,8 -108,8 3569,2 0,0 3569,2 3460,4

-154,9 32,7 13,8 -108,4 3407,0 0,0 3407,0 3298,6

-154,5 32,7 13,8 -108,0 3244,8 0,0 3244,8 3136,7

-154,1 32,7 13,8 -107,7 3082,5 0,0 3082,5 2974,9

45,9 32,7 13,8 92,4 1460,1 0,0 1460,1 1552,5

343,7 32,7 13,8 390,1 0,0 0,0 0,0 390,1

343,7 32,7 13,8 390,1 0,0 0,0 0,0 390,1

Liabilities & Equity Current Liabilities Trade & Other Payables bn VND Short-Term Loans bn VND Current Portion of Long-Term Borrobn VND Total Current Liabilities bn VND Long-Term Borrowings bn VND Total Liabilities bn VND Equity EVN Contribution bn VND Retained profit bn VND Total Equity bn VND

0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0

0,0 0,0 0,0 127,7 127,7 209,0 0,0 209,0 336,7

0,0 0,0 0,0 747,3 747,3 350,0 0,0 350,0 1097,2

0,0 0,0 0,0 1648,0 1648,0 444,5 0,0 444,5 2092,6

0,0 161,9 161,9 3298,9 3460,7 598,7 0,0 598,7 4059,4

1,6 161,9 163,5 3229,2 3392,8 610,5 -212,4 398,1 3790,8

1,6 161,9 163,5 3068,8 3232,3 612,9 -225,0 387,9 3620,3

1,6 161,9 163,5 2908,5 3072,0 615,5 -227,0 388,5 3460,4

1,6 161,9 163,5 2746,6 2910,1 615,5 -227,0 388,5 3298,6

1,6 161,9 163,5 2584,7 2748,2 615,5 -227,0 388,5 3136,7

1,6 161,9 163,5 2422,9 2586,4 615,5 -227,0 388,5 2974,9

1,6 129,2 130,8 1033,2 1164,0 615,5 -227,0 388,5 1552,5

1,6 0,0 1,6 0,0 1,6 615,5 -227,0 388,5 390,1

1,6 0,0 1,6 0,0 1,6 615,5 -227,0 388,5 390,1

Total Liabilities & Equity

bn VND

D:\FINAL DEC 2006-NO TRACKS\Main Report\Profit and Loss.doc

04/09/2007

Song Bung 4 Hydropower Project, TA No. 4625-VIE Final Report Main Report

SWECO International

Table 11: Forecast Cash Flow Statements (in VND) for Song Bung 4- 2008-2047
IAS Cash Flow Cash Flows from Operating Activities Profit After Tax Adjustment for: Depreciation & Amortization Interest Expense Foreign Exchange Loss Subtotal Change in Working Capital Net Cash Flows from Operating Activities
bn VND bn VND bn VND bn VND bn VND bn VND bn VND

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2027

2037

2047

0,0 0,0 0,0 0,0 0,0 0,0 0,0

0,0 0,0 0,0 0,0 0,0 0,0 0,0

0,0 0,0 0,0 0,0 0,0 0,0 0,0

0,0 0,0 0,0 0,0 0,0 0,0 0,0

0,0 0,0 0,0 0,0 0,0 0,0 0,0

-212,4 162,2 222,3 0,0 172,1 -14,7 157,4

-12,6 162,2 214,5 0,0 364,2 -30,1 334,0

-2,0 162,2 203,9 0,0 364,2 0,0 364,2

0,0 162,2 193,2 0,0 355,4 0,0 355,4

0,0 162,2 182,4 0,0 344,7 0,0 344,7

0,0 162,2 171,7 0,0 333,9 0,0 333,9

0,0 162,2 78,0 0,0 240,3 0,0 240,3

0,0 0,0 0,0 0,0 0,0 0,0 0,0

0,0 0,0 0,0 0,0 0,0 0,0 0,0

Cash Flows from Investing Activities Acquisition of Fixed Assets and Construc bn VND

0,0

-328,6

-723,2

-901,0

-1803,5

0,0

0,0

0,0

0,0

0,0

0,0

0,0

0,0

0,0

Net Cash Flows from Investing Activities

bn VND

0,0

-328,6

-723,2

-901,0

-1803,5

0,0

0,0

0,0

0,0

0,0

0,0

0,0

0,0

0,0

Cash Flows from Financing Activities Cash Proceeds from Long-Term Borrowin bn VND Repayment of Loans bn VND Interest Expense bn VND Commitment fee bn VND Capital Injected (EVN) bn VND

0,0 0,0 0,0 0,0 0,0

127,7 0,0 -4,9 -3,2 209,0

619,6 0,0 -30,1 -5,6 140,9

900,8 0,0 -79,3 -9,5 94,6

1812,7 0,0 -166,5 -0,7 154,1

92,3 -161,9 -222,3 0,0 11,8

1,5 -161,9 -214,5 0,0 2,5

1,5 -161,9 -203,9 0,0 2,5

0,0 -161,9 -193,2 0,0 0,0

0,0 -161,9 -182,4 0,0 0,0

0,0 -161,9 -171,7 0,0 0,0

0,0 -129,2 -78,0 0,0 0,0

0,0 0,0 0,0 0,0 0,0

0,0 0,0 0,0 0,0 0,0

Net Cash Flows from Financing Activities Net Increase in Cash Cash at Beginning of Year Cash at End of Year Cash at End of Year (USD check)

bn VND bn VND bn VND bn VND M USD

0,0 0,0 0,0 0,0 0,00

328,6 0,0 0,0 0,0 0,00

724,8 1,7 0,0 1,7 0,10

906,6 5,5 1,7 7,2 0,44

1799,7 -3,8 7,2 3,4 0,21

-280,1 -122,6 3,4 -119,2 -7,25

-372,5 -38,4 -119,2 -157,7 -9,59

-361,8 2,4 -157,7 -155,3 -9,45

-355,0 0,4 -155,3 -154,9 -9,42

-344,3 0,4 -154,9 -154,5 -9,40

-333,5 0,4 -154,5 -154,1 -9,38

-207,2 33,1 12,8 45,9 2,79

0,0 0,0 343,7 343,7 20,91

0,0 0,0 343,7 343,7 20,91

D:\FINAL DEC 2006-NO TRACKS\Main Report\Profit and Loss.doc

04/09/2007

Figure 1

Hy d r o po w e r pl a n t s in Vie t n a m
Ch in a
Tu y e n Qu a n g Ba n Ch a t Th a c Ba

Ha No i
Ho a Bin h

La o s
Ba n La

Ea s t Se a
Da Na n g

Th a iLa n d

A Vu o n g

So n g Tr a n h

Th Ko n Tu m Pl e iKr o n g Vin h So n Se Sa n 3 SeSa n 3A Ya l y An Kh e

So n g Ba Ha

Ca mb o d ia
Th a c Mo D.Na i4 D.Na i3

So n g Hin h Sr e po k 3 Bu o n Ku o p

Da Nh im Da iNin h Ha mTh u a n

Da Mi Tr iAn

HCM c it y

Ea

st

a Se

Le g e n d :
Ex is t in g Pl a n n e d

Figure 2
Song Bung 4 Hydropower Project
Tentative Construction Scedule
2008 Q1 Q2 Q3 Q4 Q1 2009 Q2 Q3 Q4 Q1 2010 Q2 Q3 Q4 Q1 2011 Q2 Q3 Q4 Q1 2012 Q2 Q3 Q4

Preparatory Works

Commencement of Main Works Dam and Spillway Diversion Culvert Foundation Excavation Cofferdam RCC Dam to El. 170 m Dry Season Delays RCC Dam to El. 198.5 m Wet Season Delay RCC Dam to El. 227.5 m Spillway Concrete Spillway Gates Closure Diversion Excavation of Plunge Pool Intake Excavation Concrete Structure Gates Waterway Adit Tunnels Headrace Tunnel Surge Shaft above El. 222.5 m Surge Shaft below El. 222.5 m Penstock Penstock Lining Tunnel Lining Power Station Excavation Concrete Structure Equipment

Transmission Line

Reservoir Filling and Commisioning Reservoir Filling First Unit Second Unit

Construction Schedule.xls 09/04/2007

Figure 3
Song Bung 4 Hydropower Project Tentative Implementation Scedule 2006 O N 2007 J J 2008 J J 2009 2010 2011 2012 D Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

A General Activities PPTA Approval of Feasibility Study Loan Processing Board Approval of Loan Loan Effective Technical Design and Bidding Documents Preparation Approval by EVN and ADB Recruitment of Implementation Supervision Consultant TOR General Procurement Notice EOI by Consultants Shortlisting of Consultants Bidding, Evaluation, Negotiations, and Approval Signing of Contract Procurement of Civil Works Preparation and Approval of Prequalification Documents General Procurement Notice Specific Procurement Notice Prequalification Bidding, Evaluation, Negotiations and Approval Signing of Contracts Procurement of Electromechanical Works General Procurement Notice Specific Procurement Notice Bidding, Evaluation, Negotiations and Approval Signing of Contracts Construction Preparatory Works Commencement of Main Works Dam and Spillway Intake Waterway Power Station Power Station Equipment Transmission Line Relocation of Highway 14D Relocation of Inundated Villages Preparations Access Roads to Resettlement Sites Design Award of Contracts Construction of Roads to Pa Rum A and Pa Rum B Construction of Road to Pa Pang Preparation of Resettlement Sites Consultations and Design Award of Contracts Construction Implementation of Resettlement Payment of Compensation Relocation to New Sites Provision of Subsidies Downstream Program Livelihood Program for Pa Dau 2 Village Dai Son Road Livelihood Program for Dai Son Commune Project Lands-Consultations, DMS, REMDP, Compensation Construction Area Relocation of Highway 14D Transmission Line Reservoir Filling and Commisioning Reservoir Filling Commisioning of First Unit Commisioning of Second Unit

M A M

O N

M A M

O N

Implementation Schedule.xls 09/04/2007

Figure 4

ORGANIZATION CHART FOR PROJECT MANAGEMENT OF SONG BUNG 4 HYDROPOWER PROJECT

EVN

ADB

Directorate Committee Quang Nam Province

Project Director Compensation, Support and Resettlement Council Nam Giang District

Project Manager

Independent Monitoring

Finance and Accounting Department

Project Department

Materials & Equipment Department

Environment & Resettlement Department

Implementation Team

Implementation Supervision Consultant Note: ADB-financed Consultant