Report No. 1 0842.VN

Viet NamEnergy Sector Investment and Policy Review(In Two Volumes) Volume II: Annexes

June 18, 1993

Industry and Energy Operations DivisionCountry Department IEast Asia and Pacific Region

Document of the World Bank

This document has a restricted distribution and may be used by recipientsonly in the performance of their official duties. Its contents may not otherwisebe disclosed without World Bank authorization.

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Currency Equivalents

The Vietnamese currency is the dong (D). A currency reform in 1985replaced ten old dong with one new dong.

The exchange rate in Calendar 1992, was US$1.00 = D 11,100The exchange rate in December 1992, was US$1.00 = D 10,700

Fiscal Year

January 1 - December 31

Weights and Measures

bbl - barrelbm3 - billion cubic meterbcf - billion cubic feetbcm - billion cubic meterbpd - barrels per daydwt - deadweight tonGWh - gigawatt-hour (1 million kilowatt - hours)ha - hectarekcal - kilocalorie (3.97 British thermal unjts)km - kilometer (0.62 miles)kV - kilovolt (1,000 volts)kW - kilowattkWh - kilowatt-hourin - meterink - cubic metermm - miilimeterm.n.b - million barrelsmmcf - million cubic feetmt - million tonsMW - mega wattppm - parts per milliont - tontcf - trillion cubic feettoe - tons of oil equivalent

Conversion lactors

1 million tons of oil equivalent is

= 1.5 million tons of coal= 3 million tons of lignite= 1.111 bcm of natural gas= 39.2 bcf of natural gas= 107 mcf per day of gas= 12,000 GWh of electricity

FOR OMCIAL USE ONLY

Abbreviations and Acronyms

ADB - Asian Development BankBP - British PetroleumCIrM - The Central Institute of Economic ManagementCOALIMEX - Coal Import-Export and Mateal Supply CorporationCOG - Conmnittee for the Organization of the GovernmentEHV - Extra High Voltage Tramission LineBIA - Elviomnt0 Impact A_ntENPEP - Energy and Power Evaluation ProgramESMAP - Energy Sector Management Asstance PtogramESP - Electrostatic PrecipitatorFAO - Food and Agriculhural OrganitionFCC - Fluid Catalytic CrackingGDP - Gross Domestic ProductIWFAC - High Voltage Alternaive CurrentHVDC - High Voltage Direct CurrentIAEP - International Atomic Energy AgencyIUCN - International Union for the Conservation of NatureLPG - Liquified Petroleum GasLRMC - Long Run Marginal CostMIS - Management Information SystemMITT - Ministry of Trade and TourismMOE - Ministry of EnergyMHI - Ministy of Heavy IndusttyMTC - Ministry of Transport and CommunicationsNPESD - National Plan for Environment and Susinable DevelopmentPCi - Power Company 1PC2 - Power Company 2PC3 - Power Company 3PCI - Pulverized Coal InjectionPETIECHIM - Petroleum Equipment Import CorporationPETROLIMEX - Importe and Exporter of Petroleum ProductsPIDC1 - Power Investigation and Design Company 1PIDC2 - Power Investigation and Design Company 2PSC - Production Sharing ContractsRoW - Right of WaySCCI - State Committee for Coopeation and InvestmentSIDA - Swedish International Development AgencySCP - State Committee on PricingSOB - State Owned EnterprisesSPC State Planning CommitteeSUC - Standard Unit CostsUNDP - United Nations Development ProgamUNDTCD - United Nations Deparent of Technical CoopedionUNEP - United Nations Environment ProgramTA - Technical AssistanceTR - Transferable RublesVIlTIP - Viet Nam Institute of Tropical Technology and Envirnm protectiVOC - Volatile Organic CompoundsWASP - Wein Automatic System Planning PackageWB - World Bank

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

FOR OMCIAL USE ONLY

VIET NAM

ENERGY SECTOR INVESTMENT AND POLICY REVIEW

Table of Contents

VOLUME H - ANNFXES

INTRODUCnON ........................................... i

1. THE ECONOMY AND ENERGY DEMLAND

1.1 Pbpulion andEsfimatedGDPby Sector(1980-10) . .............. 11.2 Energy Balances (I9) .................................. 21.3 EnergyCommodityAccount(1990) .......................... 31.4 Supplies ofModermEnergy (1980-1990) ........................ 41.5 Consumption of Modem Energy (1980-1990) ..................... S1.6 Domestic Production and Supply of Coal (1980-1990) .... ........... 61.7 ConsumptionofCoal(1980-1990) ........................... 71.8 Electricity Consumption(1980-19) .......................... 81.9 Production and Consumption of Natural Gas and

Crude Oil (1980-19) ................................ 91.10 Consumption of Main Petroleum P;oduct (1980-1990) .... .......... 101.11 Foreign Exchange Rates ................................. 111.12 Estimated Supply Cost of Petroleum Products (eady 1992) ............ 121.13 GDP & Economic Growth Raft Projecdons ..................... 131.14 Summary of Commercial Energy Consumption Forecast .... ......... 151.15 Petroleum Product Demand Forecasts ......................... 181.16 Gas Consumption Forecast for Electricity Generadon ................ 231.17 Coal Demand Forecas .................................. 261.18 Electricity Demand Forecasts and Generation

Requirements ..................................... 301.19 Prices of Key Energy Products in Viet Nam ...... .............. 401.20 Man Power Resources in the Energy Sector ................... .. 421.21 Energy Sector: Organization Charts .......................... 44

2. TIE OIL AND GAS SECrOR ............................. . 53

2.1 Oiland Gas Sub-Sector ................................. 542.2 Exploration Drilling Offshore, Acreage and

Review of Current Production Sharing Contra ct. . 602.3 Summary of Oil Reserves, Gas and NGL ...................... 632.4 Oil and Gas Development Projections - Summary of Main

Parameters; Oil Gas and Condensate PrductionForecast and Estimated Expenditure for 1992 - Soaro 1 .. ........ 65

2.5 Capital Expenditure for Oil and Gas Devdopmt .. 68............... 2.6 BACH HO, DAI HUNG Cash Flow Calculaon br I99 ........... . 692.7 Viet Nam Oil and Gas Company ..... ..................... ........ 712.8 Actions Required for BACH HO Development .................. .72

3. THECOALSECTOR ...................................... 73

3.1 Coal Geology of Viet Nam ............................... 743.2 Coal Mining Operations ................................. 753.3 Coal Ports . ......................................... 833.4 Coal Briquettes . ...................................... 863.5 World Anthracite Production & Viet Nam Coal Exports .............. 883.6 Viet Nam: Coal Sector Investment Program .................... 90

4. THE POWER SECTOR .................................... 91

4.1 (a) Accounting Methods used by Viet Nam Power Companies .... ....... 92(b) Electricity Tariffs in Viet Nam ........................... 94(c) Capital Depreciation Rates .............................. 95

4.2 Historical Regicnal Electricity DemandCharacteristics (1981-1990) ................................ 96

4.3 (a) Description of Thermal Generating Facilities ................... 97(b) Thermal Generation Planning Parameters Used

in WASP/ENPEP Studies ............................... 100

4.4 (a) Description of Hydro Generating Resources ................... 101(b) Hydro Data Used in ENPEP Model ........................ 103(c) Technical Characteristics Used For Cost

Evaluation of Proposed Viet Nam Hydro Power Projets .... ....... 104(d) Hydropower Project Planning and Institutional

Strengthening Consultant Services - Termsof Reference ...................................... 108

4.5 (a) Levelized Costs, Fuel Usage and EfficiencyChaacteristics of Alternative Generating Plant ................. 109

4.6 Least Cost Planning with an EHVInterconnection in Viet Nam ............................ 110

4.7 Summary of ENPEP Expansion Scenarios ....................... 112

4.8 (a) Recomnmended Generation Expansion Scenarios ForBaselHigh Load - Limited Gas ....... 117

(b) RecommenJed Generation Expansion Scenarios ForBaselgh Load -Hgh Gas ............................ 118

4.9 Amortized Costs and LRMC for Generation Plan ............... 119(a) Case 032 All Viet Nam Lower Load

2 BCM Gas In 1995 EHV 1994 .......................... 119(b) Case 037 All Viet Nam Higher Load EHV 1994,

2 BCM Gas after 1995 ............................... 121

4.10 Estimate of Regional Transmission andDistribution Investment Base Costs ........................ 121

(a) Northern Region PCI 1992-2010 .......................... 121(b) Southern Region PC2 1992-2010 .......................... 122(c) Central Region PC3 1992-2010 ........................... 123

4.11 Long Run Marginal Cost of Supply and Net Present Value of Losses ... 124(a) Case 32: Scenario ................................. 124(b) CEse 37 : Scenario 2 ................................. 126(e,) Estimation of Short-Term Marginal Electricity Supply Costs .... ..... 128

4.12 Financial Analyses for the Least-cost Expansion Plan .... ......... 130(a) Methodology . ..................................... 130(b) Cash Flow Analyses - Scenario 1 .......................... 134(c) Cash Flow Analyses - Case with 10% interest

on Long-Term Foreign Debt ............................ 140

4.13 Summary of Detailed Recommendations to be Considered inProject Preparation and for Loan Applications ................. 146

5. RURAL AND HOUSEHOLD ENERGY SECTORS ................... 148

5.1 Population Distribution and Density ........................... 1495.2 Household Energy Surveys ................................ 1505.3 Energy Efficiencies ..................................... 1515.4 Renewable Energy Progams ............................... 1525.5 Forestry Sector Energy Initiadves ............................ 1555.6 Pries of Appliances and Other Goods ......................... 1585.7 Recommendations For the Rural and Househo!d Energy Sector .... ...... 159

6. ENVIRONMENTAL ISSUES ................................. 161

6.1 Coal Mining Disturbed Area and Production ..................... 1626.2 Incremental Environmental Supply Costs from Coal Mining .... ........ 1636.3 Incremental Environmnental Costs of Hydroelectric Plants .............. 1646.4 Incremental Environmental Costs of Thermal Plants ................. 1666.5 Mangrove Management .................................. 167

7. INSTIT ONAL AND FINANCIAL DEVELOPMENT ................ 168

7.1 Regulation of the Energy Sector ............................. 1697.2 Terms of RefereLoe - Review and Modernization of the Financial

Management Information System, Energy Companies, Viet Nam .... ..... 171

INTRODUCllON

1. Ihere are two scenarios for this analysis. The first, Scenario 1 corresponds togovment forecats for growth in 1991-93, and projects a growth rate of 5.4% p.a. for 1993-96and 6.4% p.a. for 1997-2012 for an average 6% p.a. for the 1993-2012 period. SenarIo 2 isbased on the asmption hat reform efo are not derailed and that Viet NWan can rescheduleexrnal debt and attract foreign investors. The growth rate projections under this scenario are6.8% p.a. for 1993-96 and 7.3% p.a. for 1997-2012 for an average of 7.2% p.a. for the 1993-2012 period. (For a breakdown by regions and sectors, for the two scenarios, refer to Annex1.13)

2. The term commercid energy (also referred to as modern energy in the r ~r)encompasses those energy sources that have hitherto provided the bulk of the requirents fordern industri society, and which are sold In the course of commerce or provided by a public

utlity. Although wood and traditonal fuels are widely traded, they ae, not included in thisdefinition.

LISI OF ANNEXES

CWAPTER 1- THE ECONOMY AND ENERGY DEMAND

ANNEX NO.

l.i Population and Estmated GDP by Sector (1980-1990)1.2 Energy Balances (1990)1.3 Energy Commodity Account (1990)1.4 Supplies of Modern Energy (1980-1990)1.5 Consumpdon of Moder Energy (1980-1990)1.6 Domesdc Production and Supply of Coal (1980-1990) 6 ---

1.7 Consumpdon of Coal (1980-1990)1.8 Electricity Consumption (1980-1990)1.9 Production and Consumpdon of Natua Gas and

Crude Oil (19801990)1.10 Consumption of Main Petroleum Products (1980-1990)1.11 Foreign Exchange Raes1.12 imated Supply Cost of Petroleum Products (early 1992)1.13 GDP & Economic Growth Rate Projections1.14 Summary of Commercial Energy Consumption Forecast1.15 Petroleum Product Demand Forecasts1.16 Gas Consumption Forecast for Electricity Generation1.17 Coal Demand Forecasts.1.18 Electricity Demand Forecasts and Generation

Requirements1.19 Prices of Key Energy Products in Viet Nam1.20 Man Power Resources in the Energy Sector1.21 Energy Sector: Organization Charts

Anc~ 1.1Page 1 of 1

POPULATION ANDESTTMATED GDP BY SECTOR IN VIETNAM ( Billion 1982 Dong)

1980 to 1990........................................................................

YEAR AGR7 INDUSTRY OTHER adjust TOTAL POPULATION APPROX*FORESTl'h -ment GDP million US$/CAPITA

1980 62.300 i1.300 27.500 43.230 164.330 53.722 1381981 64.358 31.620 29.542 44.827 170.347 54.722 1411982 71.024 34.194 29.846 48.263 183.326 55.687 1491983 76.504 38.577 32.045 52.605 199.731 56.655 IS01984 80.800 41.200 33.300 55.900 211.200 57 692 1661985 84.400 46.300 33.400 59.100 223.200 58.868 17'1986 86.000 48.400 35.100 61.100 230.600 t0.249 1731987 83.200 53.900 36.800 66.100 240.000 61.750 1761988 90.800 56.000 37.000 70.100 253.900 63.263 1821989 101.700 54.700 37.500 78.003 271.900 64.800 1901990 103.100 57.240 38.500 86.300 28S.140 66.473 194

Growth 5.2% 6.2% 3.4% 5.7% 2.2%

Not Material Product, according to MPS, plus adjustmentfor depreciation and services.1981 to 1983, and 1990 are estimates.US$/Capita assumes 22 dong/USS, in 1982 dollars

sources World Bank Economic Report, November 1991

ENERGY SALANMS IN VIEINDH 1990VIETNA (THMAUS TOE)... ........ ....... .............................. ........................................................... ........ ........... .--. ......................... ..... ....... .... ..... .............PRINLT ENERGY SECOIMY ENERGY~~~~~~................................... ...................... ..............................................- @. --. --....... ---...--. -......... ......-.--.-TRlADI lUel EIIERGY ~ER EMERLu TOTALS............. ..................................... ...........................................................................................

.......................Electricity Petrolam ProjctsFuel- Siams CrLie ............................................................

oo0d Charcoel ResiSA. Oil Gas Cosl Ndro uclear Other Grid/*Isol ihsei Petrol Kero Av F F Oil OtherWOES SLFPPLT

Proicti - 910 2695 474 2652 1343 - - 75field Use mul oose. - - - 471 - . . -471lq2orts 1 3 0 - - - - - -309 696 216 134 6os 110 3073Esports . - -2655 - -3S - - - - - - -30 - - 3550baters . * * * * * * * * * .-StockOCnes - - - - -69 - --1 - I6OSS StIPI.Y AVAILABLE ff94 76W 40 2 2218 1343 - - 13 696 216 103 605 110 1M02 LII Priary Energy 56.92 4.12 0.2X 0.02 13.02 7.92 - - 7.1S 4.1X 1.3X 0.6" S."3 O.X 105D.0X lr Energy 0." 0.06 33.42 20.22 19.1X 10.5 3.32 1.6S 9.1X 1.71 100.05

UNVEUSI,................

cha al Proikcti - -- - - - - - ' ' Powr sawratien -1 -169 -453 - -m -42 - -- -71 -son u g losse -2 -672 -890 -97 - - -15S --186 Trwldistr Loss - - - - - - - - -173 - - - - -1716Petrolsi Refining -40 - - 18 7 3 2 10 1 0methanIol/GWLPSOwU Lose - - - - -- - - -

MET SUPY AVAILME 9694 - 700 0 0 1377 - - - 525 1187 703 219 105 392 111 150142 64.6X - 4.7X 0.0a 0.0a 9.22 - - 3.52 7.92 4.7X 1.52 0.7X 2.6X 0.7X 100.02

WLITIU SY SECTORR ........................................................................................................................................................Trport - - - 18 - - 4 205 103 - 67 26 - 1024Inistry 969 - 350 - - 723 - - 240 658 - 348 32Other - - - - 43 51 325 - 38 17 - 474losEnergy Us - - - - - - - - - - - - - 106 106ouehold 8725 - 350 593 229 - 219 - - 5 1012TOTAL 694 - 700 - 1377 525 1187 703 219 105 392 111 15014

Z Alt Sconday Energy 64.62 4.7X - ' 9.2S 3.52 7.92 4.12 1.52 0.12 2.6X 0.72 10D.05X Wldr Enerwg 29.8X . . 11.42 25.72 15.2X 4.12 2.32 8.52 2.43 l00.05I >Souce: Ergy CUuadity Accout for VIENAM using stanbrd conversion factors 1

* St4-~~

ENERGY COMMODrTY ACCOUNT

hERS M166I1TV LACMIN

IRADlTlO tIIERG1 Crue Oil Aviatimn Notoe rn- Crade ail laturas G Geo-aid gas.- gala- Jet let.- tutEhrgw Petrolan ard &uhore Offstwo rem

Iloedluul Onarce;t Sims. Coal Coden- - pe lne fuel aew Digel F Olt lPG Othes oil Prec¢ca petmam (tst) twet) 0o1*- etc.. ElectODD sates (00e (MD (000 c or (n0e cs cs (CDO cs s cm proawta *iltt mll pC= alxele Otcaer tricity

1 Cu T N1 u I NW tons) (c lIbbt) bWl) Lbte) We) htsl) tbs) Wte) Wbes) tbstc) lUe) L et) C LtAs) teuDt ru ft r u h 1tn QSb. .. .. .. .... .. .. ... . .... .. . ... ii& . .. .. .. .. .. .. ... . la... ii...ii4............................................. 9764..... ... -0 .. 53 ............iIrAl c uen 2W r 20h e irn29 64a 404 lSlii.,7ii iO15ii

$Ilat ad Less *sml I scale coal Minns 7D0 -1907Dga Iniectien

lspmts 5744 1023 1657 9509 4Z4 23 461 22691 22691EIorta -676 -19471 -233 -2t3 -19"04bAtsStack thmio -128Primr OmrwNavarle4da 2996 2040 4114 293 - ST" 710 1657 9509 4274 23 461 - 22458 22751 99 - 531-

Statiatical diermica j - ; . - -1 ........ ...... ..thal Preocticn

fttrot. Retinfrg -293 55 12 23 130 70 294 1

mr Ceureatlhot c_rsud -1560 -1012 -150 -200 -Z65 -99 -53t -Powr Iwwated In ab 2CC4 496 U2 1338 18 5 S371 - -

lrwlMmern 1ddlstrlbtin lom - - -2112

Em e wtor amn u los - - -31nbt spWy weilUte 2994 2D40 2554 - - S799 1600 8627 2156 23 465 2052 201S2 - - - - - 6

b ote eptccomqien 29964 - 2040 2554 - 5800 8l02 160D 8621 2755 83 46S - 201s2 2D152 - - - - - 622laldutfaltl/c 26968 1o0 t1l0 160D 2S 1703 1103 271i- l tfy 2996 1020 1340 41 24S1 77A 1ZIO 2tS0Ir - rt 34 580 514 148 183 .m FM 51005.eD so 23 121 2767 2M6Y 609la-Enrgy use 465 46S US

.............................................................................................................................................................................................................................

Rates: 1. Pe- gwnerated -aw is in ta ad st Icelued in do asu of t b rl 5i. bIle

Sceu: Nialirn Estimtes ad EnryW Intitut.. BE

(iFO0-

SUPPLIES OF MODERN ENERGY IN VIETNAM1980 to 1990

.................... ........-........-.. -- e-......--........ .................... ....................

Petroleum Natural gas Coal ElectricLty TOTAL MODERN S"lf-

...... ..... ... ................. ..................... Generation ENERGY Supply

Crude Import before SUPPLIES Ratio

offshore lens Exp Offshore Onshore Production Import losses

Productlon Prod+Crude (flared) lo. txp

mill bbl mill bbl bcf b Of 00Otons OOtons GWh 000 too

1980 0.0 13.0 0.000 0.000 4987 -635 3700.0 5177 51.0%

1981 0.0 13.3 0.000 0.000 5725 -928 3726.0 5539 60.at

1982 0.0 13.8 0.000 0.000 6040 -613 3973.0 6041 55.7%

1983 0.0 14.0 0.000 0.000 6085 -402 4068.0 6313 50.2%

1984 0.0 14.0 0.000 0.000 4819 -470 4685.0 S373 43.3%

1985 0.0 14.S 0.000 0.000 5327 -569 5063.0 5759 47.5%

1986 0.3 16.3 0.177 1.222 5953 -586 5525.0 6552 46.9%

1987 2.0 16.6 1.624 1.321 6428 -188 6054.0 7537 44.2%

1988 5.0 14.S 4.235 1.172 6798 -304 6783.0 7858 56.4%

1989 10.9 7.8 10.524 0.629 3860 -525 7784.0 5917 77.7%

1990 19.8 3.4 19.070 0.099 4918 -677 8722.0 75S47 101.2%

AAC 1980/1990 -12.6% -0.1% 0.6% 9.0% 3.8%

ARC 1985/1990 -25.2% -1.6% 3.5% 11.5% 5.6%

* Note: TOTAL MODERN ENERGY SUPPLIES are gross supply before looses and stock changes;

but after export;- nad imports, and It lncludes all conversion losses in oil gas and coal,

but only hydro component of electrLcity to avoid double counting;

Petroleum prod>-c consumptLon ln period 1980 to 1983 is estimated.

Sources Compiled by KiosLon ( 1>

CONSUMPTION OF MODERN ENERGY IN VIETNAM1980 to 1990

.................................................................Pet Products Gas Coal Electricity TOTAL MODERN*

ENERGYmill bbl bcf 000tons GWh 000 toe

. ........ ....... ........ ........ ...........

1980 13.000 0.000 4052 2800 47751981 13.250 0.000 4509 2818 51451982 13.750 0.000 4983 2973 55641983 14.000 0.000 5015 3108 56241984 14.002 0.000 5010 3597 56311985 14.461 0.000 5083 3860 57521986 16.173 1.222 5500 4151 6328198p 18.454 1.321 6139 4597 71141988 19.140 1.172 5808 5048 69681989 18.356 0.629 3801 5666 54931990 22.754 0.099 4114 6225 6385

AAG 1980/1990 5.8% 0.2% 8.3% 2.9%AAG 1985/1990 9.5% -4.1% 10.0% 2.1%

* Note; Total Modern Energy includes conversion louses in use of oil, gas and coalbut only hydro component of eleccricity to avoid double counting;Electricity is amount consumed.

Source: Compiled by Mission

o .-

DOMESTIC PRODUCTION AND SUPPLY OF COAL IN VIETNAN (OOOtonu/year)1980 to 1990

..............................................*****.....

STATE PRODUCTION OF COAL TRADE IN COAL EST TOTAL................................... ...... ... ...... S LOCAL UPPLIES

Export Imports PROD/CONS AVAILABLEYEAR Anthraclte Thermal Coking Total ........ . . ..... ....

Coal Coke

1980 4946 41 0 4987 640.0 0.0 5.3 43521981 5681 44 0 5725 935.0 0.0 6.6 47971982 5957 84 0 6040 674.0 0.0 1.0 53671983i 5974 111 0 6085 402.0 0.0 0.0 56831984 4698 119 2 4819 470.0 0.0 0.0 43491985 5188 122 17 5327 603.5 29.0 5.8 47581986 5812 120 21 5953 620.8 30.8 2.4 53661987 6284 117 27 6428 206.7 18.9 0.0 62411988 6183 141 9 6332 314.5 10.1 0.1 466 64941989 3269 134 0 3403 525.0 0.0 0.2 457 33351990 4075 130 13 4218 676.5 0.0 0.0 700 4242

AMG 1980/1990 -1.9% 12.2% -1.7% 0.6% -0.3%AAG 1985/1990 -4.7% 1.3% -5.7% -4.6t 2.3% -2.3%

Source: Energy Institute, MOE

(I

I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I

CONSUMPTION OF COAL IN VIETNAM (OOOtonu/year)1980 to 1990

................ *.*.* ....................... O* .................................... #................

TOTALSCONSUMPTION BY INDUSTRIAL ACTIVITY ......................................

.... ................................................................ CONSUMPTION OTHER EST TOTALElectricity IN MAIN DOMESTIC LOCAL ALL

YEAR Generation Cement Chem/Fert Tranup Textlle Paper Machln Food INDUSTRIES CONSUMP PROD/CONS CONS

1980 1281 110 196 97 51 10 52 83 1880 1 2172 4052

1981 1440 147 130 49 66 64 45 95 2035 2474 4509

1982 1570 229 173 43 73 81 49 82 2300 2683 4983

1983 1766 278 198 139 77 94 46 125 2721 2295 5015

1984 1703 326 201 182 85 125 37 191 2849 2162 5010

1985 1960 364 182 44 80 113 34 149 2927 2156 S083

1986 2297 460 196 89 89 149 40 133 3452 2048 5500

1987 2503 340 237 105 96 152 38 127 3598 2542 6139

1988 2S58 397 333 100 82 155 31 102 4058 1284 466 5808

1989 1968 402 240 42 91 121 32 85 2979 365 457 3801

1990 1560 521 217 34 81 130 29 68 2639 775 700 4114

AAG 1980/1990 2.0% 16.8% 1.0% -10.0% 4.6% 29.2% -5.7% -1.9% 3.5% -9.8% 0.2%

AAG 1985/1990 -4.5% 7.4% 3.5% -4.9% 0.2% 2.8% -3.2% -14.5% -2.1% -18.5% -4.1%

Sources Energy Institute, MOB

:t

ELECTRICITY CONSUMPTION IN VIETNAM ( GUh/yr)1980 TO 1990

YEAR INDUSTRY RESIDENT AGRIC OTHER TOTAL

1980 2800 estimated1981 1516 691 316 295 28181982 1658 717 246 352 29731983 1754 763 237 354 31081984 2031 843 308 415 35971985 2108 985 303 464 38601986 2204 1094 331 522 41511987 2383 1243 387 584 45971988 2579 1332 449 688 50481989 2617 1880 470 699 56661990 2850 2046 608 721 6225

Souroe: Energy Institute, NDO

Go__(1

PRODUCTION AND CONSUMPTION OFNATURAL GAS AND CRUDE OIL IN VIETNM

1980 TO 1990.. .. ... .. ...................................

Natural Can Crude OllY B R .............. ............ .........

Offshore Onshore Offshore RefLn(flared) (elect gen) (export) Cons

mLll cf/yr mLil bbl/yr

1980 0.00 0.00 0.00 01981 0.00 0.00 0.00 01982 0.00 0.00 0.00 01983 0.00 0.00 0.00 01984 0.00 0.00 0.00 01985 0.00 0.00 0.00 01986 177.00 1221.89 0.30 0.3931987 1624.00 1320.77 2.05 0.3931988 4235.00 1!72.45 5.02 0.3931989 10524.00 628.60 10.91 0.3931990 19070.00 98.88 19.76 0.393

Offshore gas is flared;

Source: Energy Instltute, MOE

o .

CONSUMPTION OF MAIN PETROLEUM PRODUCTS in VIETNAM (000 Barrels)1980 to 1990

.*.........................................................@s ....Petrol Kero Av Fuel Diesel Fuel Oil Other LPG TOTAL

....... ....... ...............................................1980 13000 EST1981 13250 EST1982 13750 EST1983 14000 EST1984 2896.8 1166.3 1087.8 6139.0 2607.6 100.0 5.0 14002 11985 2938.1 1203.0 614.5 6280.8 3319.4 100.0 5.0 144611986 2737.3 1347.9 660.0 7373.2 3949.9 100.0 5.0 161731987 3586.4 1433.7 949.7 8109.3 4264.9 100.0 10.0 184541988 4453.0 1454.0 1054.0 8111.0 3904.0 149.0 15.0 191401989 3882.0 2111.0 872.0 7334.0 3767.0 370.0 20.0 183561990 5800.0 1681.0 802.0 9639.0 4344.0 465.0 23.0 22754

AAG 1985/1990 14.6% 6.9% 5.5% 8.9% 5.5% 36.0% 35.7% 9.5% 0

Note: Other Products are estimated for 1984 to 1986, and TOTAL for 1980 to 1983

Source: Energy Institute, MOE

:-

0

I-.~~~~~~~~~~

Annex 1.11

Page I of I

Foreian Exchanae Rates

Vietnam Official Exchangs Rates in Dong per US$ and Ruble, 1987 - 1991

Publication date | Dong/USs Dong/Ruble

Before 15 October 1987 18 18

1987: 15 October 225 150

1 December 368 240

1988: 15 September 900 700

12 November 2 600

12 December 2 800

20 December 3 000

1989: 16 January 3 300

17 February 3 500

13 March 4 500

May 4 300

June 3900 2 400

December 4 000

1990: Free market, April 4 300

May 4 500

June 5 000

October 6 200

December 6 500

1991: January 7 000

March 7 300

June 7 600

August 8 150

September 9 200

November 13 000

- 12 - Annex 1.12Page 1 of 1

E ATIMATD SUlMY COr OF PMRlOLZMI PRODUCIS IN VIEIWAM. BKCLUDllO TA ; at euly 1992...............................................................................................

RPAt to Spt Pin Tem A L1d_1 Toal Sp CoaDua CrW Slpo Olt cu Con at 1m1

PGuWl PrOduoS to VRM x 8toag (Iehad 1s3

.................... ..... ........... ......... .......... ........... .......... . .......... .......... . ........ ..........

(naUo) U8S UISI USSI1 usb1 USCII

DuE l Chde 19.00Pdrl 1.42- 26*5 2.00 2.l9 33.3 20.96Dienl 1.21 24.32 2.00 26.32 30.27 19.04KRzsom 1.30 24.70 2.00 26.70 30.71 19.31Heavy Puel Oll 0.60 13.20 2.00 17.20 19.76 12.44

VIMNAM OFCIAL MCS AT UAZCH I 192, DICLUDDNG TAX...............................................................................................

09& Whelm! POe_d Rai Putoed RdtUPrm Ps (+.Or-10%) Fduo(4of- 0)

..................... .......................

Ml ax M.ax........... .......... . .......... ... . ... .......... ................ ................ .....

milU Doqg doesA I d el d l USCI USCII

Petrol 3.22 23 2144 2621 19.50 23.83Dild 2.60 2262 2036 24US 13.31 22.62KRomooe 2.80 2267 20 2493 1354 22.67Heavy Fuel 01i 1.25 Al" 1069 1306 9.72 11.U

Note: Amama 11.000 da qual 1US$

Scoe: Mlualo Hglmaw SW State Prdoc C _amies

1%012

- 13 -

GDP A ECONOMIC GROWt ATE PROjWONSECONOMC GROWr RA SC 1 Amex 1.13NORT1ERN REGON Pao I of 2

GDP Grwth Rates1990-91 1992-6 1997-2012

Agriculture 3.0% 4.5% 5.5%Constr 4.6% 7.0% 7.0%Industry 6.0% 6.5% 6.5%Tradelofter 4.5% 5.5% 6.5%

NORTH GOP 4.2% 5.3% 6.1% 6.0% Average

ECONOMIC GROWTI RATES-SCIDURIC ICENTRAL REGION

GDP Growth Rates1990-91 1992.96 1997.2012

Agriculture 2.0% 3.5% 5.0%Constr 4.0% 6.0% 6.0%Industry 5.0% 5.0% 5.0%Trade/ofther 4.0% 4.5% 6.0%

CENTRAL GOP 3.4% 4.2% 5.4% 5.2% Average

EOONOBMC GROWITH RATES-SCENARO 1SOUTEEN REGION

GDP Growth Rates19O-91 1992.96 1997-2012

Agriculture 3.5% 4.5% 6.5%Constr 4.6% 8.2% 8.5%Industry 7.5% 7.5% 7.5%Trade/other 5.5% 6.0% 6.5%

SOUTH GOP 5.0% 5.8% 6.8% 6.6% Average

EMCONOMAC GROW RATES-SCENARO 1TOTAL ECONOMY

GDP Gmwth Rates19991. 1992.96 1997.2012

Agriculture 3.1% 4.3% 5.9% 5.4%Constr 4.5%_ 7.4% 7.7% 7.4%Industry 6.6% 6.7% 6.8% 6.8%Tradelother 4.9% 5.6% 6.4% 6.1%

TOTAL ECON 4.4% 5.4% 6.4% 6.0% Average

- 14 -

* 1Annex.13BCONOMIC GROWVl RATES-SCENARIO 2 Page 2 of 2NORTHERN REGION

GDP Growth Rates199-91 1992-96 1997-2012

Agriculture 3.0% 5.5% 5.5%Constr 4.6% 8.0% 8.5%Industry 6.0% 8.5% 8.5%Tradelother 4.5% 7.5% 7.5%

NORTH GDP 4.2% 6.9% 7.1% 7.0% Average

ECONOMIC GROWTH RATES-.SC3NARIO 2CENTRAL REGION

GDP Growth Rates1990-91 1992-96 1997-2012

Agriculture 2.0% 4.5% 5.5%Constr 4.0% 7.0% 7.5%Industry 5.0% 6.5% 7.0%Trade/other 4.0% 6.0% 6.5%

CENTRAL GDP 3.4% 5.5% 6.3% 6.1% Average

ECONOMIC GROWVI RAITSCXARIO 2SOUTHERN REGION

GDP Growth Rates1990-91 1992-96 1997-2012

Agriculture 3.5% 5.5% 685%Constr 4.6% 9.5% 9.0%Industry 7.5% 9.0% 9 0%Trade/other 5.5% 8.0% 8.0%

SOUTH GDP 5.0% 7.3% 7.8% 7.7% Average

ECONOMIC GROWTH RATES-SCWKAUO 2TOTAL ECONOMY

GOP Growth Rates1990.91 1992-96 1997-2012

Agriculture 3.1% 5.3% 6.0% 5.9%Constr 4.5%. 8.6% 8.6% 8.6%Industry 6.6% 8.4% 8.5% 8.5%Trade/other 4.9% 7.5% 7.6% 7.6%

TOTAL ECON 4.4% 6.8% 7.3% 7.2% Average

- 15 -

Annex 1.14Page 1 of 2

8MS(AY OF SCUNAO I UCOMRCIAL EIUGY COMWTIWN FORECAS. vr NAM

PETROLEM PeCUCTS lATIMAL A" COAL EECTRlCfY TOTALTruupmt Eledt hftuhY Eledt (1.66cm Ons. GM~ led EIERGY

Ind de dc EHV 1995)oml mllm IKF InC 290t"n GWh ODO TOE

1990 202 2.6 0.0 1.1 4115.0 8722.1 6163.91991 21,6 3.1 0.0 1.1 3619.6 939I.0 6118.81992 23.2 3.6 0.0 1.1 41180 1o0. 67.21993 25.0 4.5 0.0 1.1 3369.1 1064 6691.61994 27.0 4.0 0.0 1.1 3032.9 11691.0 6718.11996 29.1 2.7 0.0 2.5 3209.7 12433.6 7013.01996 31.4 0.7 0.0 5.7 32894 13344.7 7227.01997 33.9 0.6 0.0 11.7 3573.2 14308A4 M6.31996 36.7 0.6 0 n 18.0 3760.3 15344.9 8664.01999 39.7 0.8 U.0 21.6 4160.9 1640.0 909.62000 43.0 0.7 0.0 17.3 4145.2 1769.7 9860.62001 46.6 0.5 0.0 15.9 4143.6 18960.6 10340.22002 OA 0.6 0.0 21.9 46453 20340.0 11426.62003 64.7 0.6 0.0 39.6 4452.3 21635.5 1244.02804 59.3 0.6 0.0 43.0 5163.2 23454.1 13723.92005 644 0.6 0.0 49.1 45.6 25241.6 14485.72006 69.9 04 0.0 61.6 5399.3 271714 15672.22007 76.9 04 0.0 70.7 5524.9 2924.1 17197.72008 62.6 04 0.0 29.0 5265.7 316062 1684842009 89.7 0A 0.0 26.5 5292.1 33949.3 17686.62010 97.6 04 0.0 26.2 53344 36089A4 1908722011 106.2 0.4 0.0 26.8 5462.7 39442.9 20466.12012 115.5 OA 0.0 25.8 56374 42527.6 21976.1

AAG 19901995 7.6S% 1.1% ERR 18.0% .4.8% 7.3% P.6%1996-2005 8.3% -14.4% ERR 34.6% 4.3% 7.3% 7.5%1990.2006 8.1% -9.5% ERR 28.9% 1.1% 7.3% 56%

20 ye. 1992012 8.3% -104% ER 17.1% 1.6^ 7% 6.1%

- 16 -

Afia 1.14Page 2 of 2

StIMARY OF SCAIO 2 COMMERCAL ERGY CONSMMON °ORBAS - VET NAM

PeTROLEUm PROCUCTS NATURAL GS COAL LEC CflY TOTALTtmpotlF EWc bduhy Elet (1 Mm aSS, Gbn ba ENEROY

kec atc EHS 1996)Mm l nulll w bd 000W toam 000 TOE

1990 202 2.6 0.0 1.1 4116.0 2.1 6163.81991 21.6 3.1 0.0 1.1 3625.6 9429.5 6146.21992 23.7 3.8 0.0 1.1 4200.6 1.6 693921993 26.0 4.7 0.0 1.1 3608.3 11427A 7036.31994 28.6 44 0.0 1.1 3206.9 12607.7 7134.31995 314 2.8 0.0 3.9 3410.8 13736.6 7686.71996 34.6 0.8 0.0 9.9 3620.2 16103.9 8056.01997 39.0 0.7 0.0 16.9 42374 1667TA 9162.61998 41.8 0.6 0.0 22.6 4361.0 10202.5 10001.31999 46.0 0.9 0.0 21.2 43913 19995t 2 1067.32000 50.7 0.8 0.0 20.5 4429.4 21973.6 11387.12001 55.9 0.6 0.0 39.6 4476.1 24157.7 1272.32002 61.7 0.6 0.0 62.2 4629.1 266. 14283.42003 68.1 0.6 0.0 84.1 5091.9 2923. 1625032004 75.2 0.6 0.0 86.1 6164.0 321892 18069*2005 83.1 04 0.0 102.8 7646.1 386192 20"21.42006 91.9 0.4 0.0 77.4 7838.8 39210.3 2146542007 101.7 04 0.0 63A 8042.7 43289.1 22444.2008 112.6 04 0.0 61.1 90s6.6 478432 24997.72009 124.6 04 0.0 88.0 9387.0 28.6 278A2010 138.1 04 0.0 71.7 11829.0 5809.1 31018.02011 163.1 0.4 0.0 77.7 12385.3 647412 3366022012 169.7 04 0.0 7r.7 12966.8 71664.6 3674.0

MG 1990-1996 9.3% 1.7% ERR 29.1% -3.7% 9.6% 42%1996-2006 102% -17.0% ERR 38.6% 84% 10.0% 10.6%199-2006 9.9% -112% ERRt 35.4% 42% 9.6% 84%

20 yr: 1092D2012 10.3% -10.6% ERR 23.8% 5.8% 10.1% 8.7%

-17-

Annex 1.15

PKIROLEIUM PRODUCT DEMAND FORECASIS

Cotents Page No.

Methodological Note 1

Table

1.15 (a) Summary of Petroleum Product Demand Forecast 21.1S (b) Petroleum Product Demand Forecast - Scenario 1 31.1S (c) Petroleum Product Demand Forecast - Scenario 2 4

- 18 -

Annex l.1SPage 1 of 4

PETROLEUM PRODUCT DEMAND FORECASTS

Methodological Note

1. Demand was projected by category of product and end-use for the two scenarios ofeconomic growth - Scenario 1 and 2. Demand for diesel and fuel oil by agiculture, industry andother sectors (such as construction) is linked to the forecast rte of growth of GDP in the subseorconcered. Demand for diesel and fuel oil for elcctricity generation is separately calculated, basedon the forecast for electricity demand and projected supply from other sources, notably, naturalgas.

2. Diesel, aviation fuel, fuel oil and other products are linked to industrial GDP.Gasoline (petrol), fuel oil and LPG are linked to total GDP. Kerosene demand is linked to ruralpopulation growth. In each case, elasticities have been assigned based on the exeience of otherdeveloping countries. Ihe resulidag average elasticities of demand with respect to GDP for allpetroleum products are close to 1.3 in both scenarios.

3. The resulting Scenario 1 forecast for the year 2000 is almost in the middle of the Minand Max forecasts for petroleum products recently made by PETROLIMEX, and is slightly higherthan the PETROLIMEX Min case for the year 1995. By the year 2000, this study had a verysimilar forecast for diesel, but had more gasoline and less fuel oil than the PEIROLUMEXforecast. The difference in fuel oil demand results from this study's forecast use of naural gas forelectricity generation in the place of fuel oil. The faser growth of gasoline is consistent with thehigh growth rates observed recently, and the anticipation that the vehicle stock od the country willbecome more reliant on petrol than previously, as more private and passenger vehicles areintroduced. The share of gasoline in the mix of petroleum products is forecast to increae from25% at present to around 32% by 2000. The consumption of keosene is epected to grow theslowest, reflectg the spread of electricity for lighting.

- 19 -

Annex 1.15S_U8A4RY OF PETROLEAb PRODUCT DEMAND FORkCAST8 (000 bmdslbt) Page 2 of 4

SCENARAO 1 SCENARIO 2Genew Eed Geneul Eld

Use Use Total Use Use TOWa

1990 20154 280o 22754 20154 2800 227541991 21585 3127 24712 21801 3127 247281P'2 23247 3827 28874 23704 3821 27525w93 25045 4506 28851 26027 4893 307201994 28992 4043 31035 28594 4384 329781995 29100 2745 31845 31432 2e38 342681996 31383 713 32098 34569 832 354011997 33919 647 34568 38003 e85 388881998 36680 560 37240 41810 560 423701999 39688 828 40516 46032 888 469182000 42988 651 43617 50716 761 514772001 48539 495 47034 55915 585 585002002 50435 534 50969 61685 569 622542003 54883 556 55239 68094 593 888872004 59318 561 59879 75212 595 758072005 84378 577 84953 83122 438 835802006 69898 402 70300 91913 423 923382007 75928 402 76328 101886 418 1021042008 82511 402 82913 112555 422 1129772009 89703 402 90105 124844 410 1250542010 97583 402 97965 138095 410 1385052011 108153 402 106555 153063 410 1534732012 115545 402 115947 169726 410 170136

MAG 1992 TO 1996 7.8% -33.4% 4.5% 9.9% -31.7% 6.5%1997T0 2008 8.4% -5.2% 8.2% 10.3% -5.2% 10.1%

1992 TO 2002 8.1% -17.4% 6.6% 10.0% -17.3% 8.5%1992 TO 2008 8.2% -13.6%A 7.2% 10.2% -13.7% 9.1%

20 year, 1992-2012 8.3% -8.9% 7.6% 10.1% -8.8% 9.5%

scENAo 1 PXUM PRODUCT DEAND FORWAST - VIK NAM

ECONOktC AND OTHER PARAMTE FOR FORECASTIGLong-Run

GMP 0r0h Rdt. GDP Els Pdce19SO91 1992-96 U997-2012 A LIto 1991-96 1997-2011 Els

Asdauue 3.1% 4.3% 6.9% 54%Conslr 4.5% 7.4% 7.7% 74%lnaey 6.6% 6.7% 6.8% 6.6% OIAFiFOAO 1.30 1.20 0.6TradelDow 4.9% 5.6% 6.4% 6.1%

TeloW GDP 4.4% 5.4% 6.4% 6.0% PETROL 1.60 1.70 0.7FUEL OIL 0.80 0.60 0.6LPG 1.20 1.30 0.6

Popton GronAh Rte POP Elu

Ufbm 32% 3.2% 32%R= 1.7% 1.7% 1.7% KEROSENE 1.10 1.00 0.6TeW 2.X 2.0% 2.0%

PETROLEUMPRODUCTDEMAND (000arlsperyearoANNUAL0

Trutwld4r de For Eld Gen AV TOTAL GROWTHYAR DIESE8 FUEL OIL DESEL FUEL OL PETROL Kemsen LPG FUELS OTHER MILLS 000 T Slbr

(Ugh Gas)

19S0 8626.8 275.6B 1012.2 1588.2 6800.0 1681.0 23.0 802.0 465.0 22.0 3056.81991 9361.8 2900.3 1180.0 1947.0 6211.0 1712.4 24.8 870.3 504.6 24.7 3324.5 6.6%1992 10160.8 30564 1014.0 2613.0 6743.2 1744. 26.0 946.5 648.8 26.9 3621.7 6.7%1993 11071.3 3220.9 1116.0 3391.0 7320.9 1777.1 29.0 1029.3 696.6 29.6 39908 100%1994 12039.8 3394.3 1013.0 3030.0 7948.2 1810.3 31.3 1119.3 649.0 31.0 41793 6.0%1955 13092.9 3577.1 797.0 1948.0 6629.3 1844.2 33.8 1217.2 705.7 31.6 4264.3 2.6%

- 1996 14238.2 3769.6 700.0 13.0 9368.6 1878.6 36.6 1323.7 767.5 32.1 4259.9 0.6%1997 15400.8 3923.5 640.0 7D. 10382.1 1910.6 39.8 1431.8 830.1 34.6 4580.8 7.7%1999 166b8.3 4083.7 555.0 5.0 11505.2- 1943.1 43.3 1648.7 897.9 37.2 4927.8 7.7%1999 18018.b 4250.4 55.0 323.0 12749.6 1976.1 47.2 1675.1 971.2 40.5 5359.5 8.6%2000 19409.7 4423.9 450.0 201. 14129.1 2009.7 61.3 1811.9 1050.5 43S 5758.5 7.7%2001 21081.0 4604. 400.0 96.0 15667.5 2043.9 55.9 1959.6 1136.3 47.0 61986 75%2002 22802.3 4792A 400.0 134.0 17361.3 2078.6 60.8 2119.8 1229.1 51.0 67082 8.4%2003 24664.1 49882 400. 166.0 19228.3 2113.9 66.2 2292.9 1329.4 55.2 7260.4 8.4%2004 26678.0 5191.6 400.0 161.0 213084 2149.9 72.1 2480.1 1438.0 69.9 7859.2 8.4%205 28806.3 5403.8 400.0 177.0 23613.5 2186.4 78.4 2682.7 16564 65.0 6513.5 8.6%2006 312124 56244 400.0 2. 26166.0 2223.6 85A 2901.7 1682.4 70.3 9197.7 8.2%

20 3"174. 603.0 400.0 2. 32135.7 2299.1 101.1 3394.9 1968.4 82.9 10816D 6.6% * 12009 39499.2 W417 400.0 2.0 35612.1 2338.9 110.1 36.1 2129.1 90.1 11740.4 8.7%2010 427244 660 400.0 2.0 396A 2318.7 119. 31.9 2302.9 96.0 12747.1 8.7% .2011 46212.9 870.1 4000 2.0 43733.7 2419.1 1304 42962 2491D 106.6 13846.1 85% P 2012 49662 7150* 4000 2.0 444.7 24803 142* 4"67* 2694.3 115.9 10.2 8.6%

AAM 12-2012 03% 4.3% 4.51 -30.1% 10.4% 1.7% 8.7% 6.3% 8.3% ? .6%

8S6AEO2 RIUIRCIN IaOIE DEUIN ORDEADr - VIr KiM

ECOWOLIC AND OTHERtPA W PFORFORECAIT4

GDP Groa lbJo GOP Einl PdC19901 1992-9 1997vt2012 W_ t 1991-9C. 199-2011 clm

ApCSeS 3.1% 5.3% 6SA 5.%con* 4.5% 6.6% 6.n 6.%

ht"W 6.6% O4% aim 6.% 8O O0i 1.30 1.20 O.Tfl&AUu 4.9% 7.5% 7.6% 7.6%

TdolUoP 4A% 6.6% 7.3% 12% PETROL 1.55 1.75 0.7FL1EL01O 0.60 0.60 aSLPG 120 1.30 0.6

PGPiAM= G,tA R"e POP SEet

Ul* 32% 3.2% 32%Rmd1 1.7.% 1.7% 1.7% KEROSENE 120 0.0 0.6Teal 'M2S 2.0% 2.0%

PETROLEMPRODUCT OEM D00 _hWt per IANNLUAL

Trowk ro. Ic For Eled Gen AV TOTAL GROWITHYIhR 9E ! ULOIL DE8 KEMOL OIL PM LPG RX OTHER M.L e Coo T %fr I

H Ga)

1990 8626.6 2796.6 1012.2 15862 5600.0 1661.0 23.0 602.0 465.0 22.0 3056.81991 9361.6 2900.3 1180.0 1947.0 6223.6 1715.3 24. 6TO.3 504.6 24.1 3326.3 8.7%1992 10361.5 3094.7 1076.0 2743.0 6925.2 1750.3 27.3 965.1 669.6 27.5 3709.6 11.3%1993 11512.3 3302.1 1117.0 3576.0 1705.7 170660 30.0 1070.3 620.5 30.7 4147.3 i1.6%1994 12766.2 3523.6 1049.0 3335.0 6574.1 1822.4 33.1 11t66 688.1 33.0 4439.7 7.4%1995 I415s.6 3759.6 843.0 1993.0 9404 18659.6 36.4 1316.1 763.1 34.3 4582.1 3.9%1996 156I8.6 4011. 617.0 i5.0 10615.6 1897$ 40.1 1459.4 846.2 35.4 4692.5 3.3%199 17304.9 4216.9 675.0 10.0 11971.6 1923.3 44.5 1600.6 932.8 38.7 5119S 9.3%1996 19SO56 4432.6 555.0 5.0 13501.2 1949.6 49.4 17734 1028.2 42.4 5597.7 9.5%1999 21027.5 4659.4 505.0 361 15226.0 196.0 p4.9 1954* 11334 46.9 61964 10.7%2000 23179.2 4097* 450.0 311. 17171.2 2002.9 61.0 2154.9 12494 51.5 6766.2 9.7%2001 2550.9 5146.3 400.0 1865.0 19364.8 2030.1 67.6 2375.4 1377.2 56.5 7434.1 9.6%2002 28165.4 5411.7 400.0 169.0 21636.7 2057.7 78.3 2618.4 1518.2 62.3 6176.9 102%2003 31047.4 5668.6 400.0 193.0 24626.7 2005.7 03.6 266.4 1673.5 66.7 9011.2 10.3%2004 342244 5979.7 400.0 195.0 27775.0 2114.1 92.9 3101.7 1844* 75.8 9930.9 104%2005 37726.3 6285.6 400.0 36.0 31323.3 2142.8 103.2 3507.3 2033.5 63.6 10927.6 10.2%2006 41506.6 66072 400.0 23.0 35324.9 2172.0 114.6 3866.1 2241.6 92.3 12057.9 10.5%2007 45841* 69462 400. 16.0 39037.8 2201.5 127.3 4261.7 2471.0 102.1 13314.8 10.6%2000 50532.7 7300.* 400.0 22.0 44927.1 2231.5 1414 4697.0 2723.8 113.0 14712.3 10.6% 1I.2009 557034 7674.1 400.0 10.0 6066.7 2261.6 157.1 6178.5 3002.6 125.1 16262.6 10.7%2010 614032 C066.7 400.0 10. 57139.4 2292. 174.5 57064 3309.7 136.5 179873 10.8% -

2011 67606.2 84764 400.0 10.0 64439.1 2323.* 193.9 6292.5 3640.4 153.5 19904.6 10.6%2012 74612.1 09132 400.0 1.0 726714 235.4 216.3 6936.4 4021.7 170.1 22036.4 10.9% 48 QA

AMO 92-2012 10.4% 5.4% 4.8% -24.6% 12.5% 1.5% 10.9% 10.4% 10.4% 9.5%

- 22 - Annez 1.16

GAS CONSUMPTON FORCARST FOR E:LCTRICITY GENlRATION

Contents Page No.

Methodological Note 1

Tables

1.16 (a) Summary of Gas Consumption Forecast 2

I *. . I * . I I I

- 23 - Annex 1.16Page I of 2

GAS CONSUMPllON FORECASr FOR ELECTRICITY GENERATION

Methodological Note

1. Offshore gas development is linked to oil production since no free gas fields havebeen discovered to date. In the short term, associated gas production from Bach Ho is expected torise steeply due to either a rise of the producing gas/oil ratio, resulting from the absence ofpressure maitenance, or an increase in oil production. All gas users downstream would needstable gas supplies for a minimum of 15-20 years for power generation or for use in ferilizerplant.

2. In Scenario 1, the associated gas production from Bach Ho alone cannot provideadequate and stable supply to users for the ninimum 15-20 year period. For a viable gas supplyof about 1.8 bcm/year untl 2010, Bach Ho must be supplemented, first by associated gas producedfrom Dai Hung, and eventualy from Rong, and then from either the "gas cap" at Dai Hung orfrom new discoveries.

3. Ihe two scenarios assume that the EHV line will become operational in 2005, andtiat offshore gas production will commence in 1995. Onshore production remains marginal inboth scenarios.

- 24- Annex-1.16Page 2 of 2

UYOPGABCONUwIInwpOS?SPORmlEcTW"y oU bCw

HIGH NATURAL GAS AVAILABILITY LOW MNARAL GAS AVAHAILITYSCEKARIO 1 SCENARIO 2 SCEARIO 1 SCHIARJO 2

OnOhs Ofhhe0 Toti On0h. Olthur. Tcti Oruhmm Ofhh TOM Ongio OfhIim' TOMbef bef bef bdf bef b.f bet bdf bef bet bef bet

1990 1.1 0.00 1.1 1.1 OAO 1.1 1.1 0.00 1.1 1.1 0.00 1.11991 1.1 0.00 1.1 1.1 0.00 1.1 1.1 0.00 1.1 14 0.00 1.11992 1.1 0.00 1.1 1.1 0.00 1.1 1.1 0.00 1.1 1.1 0.00 1.11993 1.1 0.00 1.1 1.1 0.00 1.1 1.1 0.00 1.1 1.1 0.00 1.11994 1.1 0.00 1.1 1.1 0.00 1.1 1.1 0.00 1.1 1.1 0.00 1.11996 1.1 1.41 2.6 1.1 ;_83 3.9 1.1 1.77 2.9 1.1 2A7 3.6199S 1.1 4.59 6.7 1.1 7.77 8.9 1.1 6.30 6A 1.1 742 9.51997 1.1 10.59 11.7 1.1 14.93 15.9 1.1 10.96 12.0 1.1 1448 16.81998 1.1 18.95 19.0 1.1 21.54 22.6 1.1 16.96 18.0 1.1 21.19 22.31999 1.1 20.48 21.6 1.1 20.13 21.2 1.1 20.84 21.9 1.1 20.13 21.22000 1.1 16.24 17.3 1.1 1942 20.5 1.1 16.60 17.7 1.1 19A2 20.52001 1.1 14.93 15.9 1.1 39.49 39.6 1.1 14.83 16.9 1.1 20.84 21.92002 1.1 20.84 21.9 1.1 61.09 62.2 1.1 22.60 23.7 1.1 20.94 21.92003 1.1 39A. 39.6 1.1 82.99 84.1 1.1 18.01 19.1 1.1 20.84 21.92004 1.1 42.73 43.6 1.1 84.05 85.1 1.1 15.89 17.0 1.1 20.84 21.92005 1.1 48.03 49.1 1.1 101.71 102.8 1.1 9.18 10.3 1.1 20.64 21.92006 .1 50.60 51.6 1.1 7628 77A 1.1 8.12 92 1.1 14.13 1622007 1.1 69.57 70.7 1.1 52.27 534 1.1 9.63 1O.6 1.1 14.13 1522008 1.1 27.90 29.0 1.1 60.03 611. 1.1 13.77 14.9 1.1 I1.65 12.72009 1.1 25A3 26.5 1.1 86.87 88.0 1.1 1342 14.5 1.1 12.01 13.12010 1.1 25.07 26.2 1.1 70.63 71.7 1.1 14.13 152 1.1 14.13 1522011 1.1 24.72 25.8 1.1 76.63 77.7 1.1 14.13 152 1.1 14.13 1522012 1.1 24.72 25.8 1.1 76.63 77.7 1.1 14.13 15.2 1.1 14.13 162

S.mntW2010 23 434 467 23 801 824 23 212 236 23 255 278AAG 1990.1995 0.0% 19.0% 0.0% 29.1% 0.0% 212% 0.0% 26.6%

19iN82006 0.0% 423% 34.6% 0.0% 43.1% 38.6% 0.0% 172% 13.6% 0.0% 23.8% 19.9%19902006 0.0% 28.9% 0.0% 36A% 0.0% 16.1% 0.0% 22.1%

20 yr1992-2012 0.0% 17.1% 0.0% 23.8% 0.0% 14.1% 0.0% 14.1%

I ~ ~~I ., I ,X

- 25 -

Annex 1.17

COAL DEMAND FORECAM

Contents Page No.

Methodological Note 1

Tables

1.17 (a) Summary of Coal Demand Forecast 21.17 (b) Coal Demand Forecast - Scenario 1 31.17 (c) Coal Demand Forecast - Scenario 2 4

*~~~~~~~~~~~~~~~~ , I' I 11

- 26 - Annex 1.17

Page 1 of 4

COAL DEMAND FORECASTS

Methodological Note

1. Demand was projected by end-use for two scenarios of economic growth - Scenario Iand 2. Industrial demand is forecast to grow at slightly less than the rate of industrial output(demand elasticity with respect to industrial GDP of 0.7). Residential consumption is forecast onthe basis of rural population growth (demand elasticity of 0.6 to rural population growth).

2. Electricity demand is forecast through detailed generational modelling with the WASPmodel. The scenarios considered are: (i) Scenario 1 the EHV line is operational by 1994; theavailability of natural gas for electricity generation is assumed to be 1.9 bcmlyr in the Min coalcase and 0.9 bcm/yr in the Max case; and (ii) Scenario 2 the EHV line is operational by 1994; theavailability of natural gas for electricity generation is assumed to be 1.9 bcm/yr in the Min coalcase and 0.9 bcm/yr in the Max case.

3. Demand for coal exports is assumed to increase by 5% per annum in Scenario 1, andat 6.6% per annum in Scenario 2.

4. According to the Energy Institute, the demand projections for coal are considerablyhigher than the cases examined above:

1995 2000

1. Domestic Market 5.0-5.5 6.3-6.7a. Coal for Electricity 2.5 3.3-4.5b. Other Sectors 2.5-3.0 3.0-3.2

2. Export Market 2.0 2.0-3.0

Total 7.0-7.5 8.3-10.7

SUMMARY OF COAL DEMAND FORECASTS (thousand tons per year)

SCENARIO 1 SCENARIO 2

General Eet Use Total General Elect Use TotalUse Min Max Exports Min Max Use Mh Max Eports Min Max

1990 2555 1560 1560 676 4791 4791 2555 1560 1560 676 4791 47911991 2620 1000 1000 1000 4620 4620 2626 1000 1000 1000 4626 46261992 2688 1430 1430 1500 5618 5618 2715 1486 1577 1500 5701 57921993 2759 600 600 1605 4964 4964 2808 800 800 1800 5408 54081994 2833 200 200 1717 4750 4750 2907 300 400 2160 5367 54671995 2910 300 300 1838 5047 5047 3011 400 500 2592 6003 61031996 2989 300 400 1966 5256 5356 3120 500 600 3110 6731 68311997 3073 500 600 2055 5628 5728 3237 1000 1000 3219 7457 74571998 3160 600 900 2147 5907 6207 3361 1000 1000 3332 7693 76931999 3251 900 800 2244 6395 6295 3492 900 1000 3449 7840 79402000 3345 800 700 2345 6490 6390 3629 800 1800 3569 7999 89992001 3443 700 1000 2450 6594 6894 3775 700 2800 3694 8169 102692002 3546 1100 1900 2560 7206 8006 3929 600 4000 3823 8353 117532003 3652 800 2700 2676 7128 9028 4092 1000 4000 3957 9049 120492004 3763 1400 2900 2796 7959 9459 4264 1900 5300 4096 10260 136602005 3879 1000 3500 2922 7801 10301 4446 3200 7000 4239 11885 156852006 3999 1400 3900 3053 8453 10953 4639 3200 8200 4239 12078 170782007 4125 1400 4700 3191 8716 12016 4843 3200 5700 4239 12282 147822008 4256 1000 6300 3334 8590 13890 5058 4000 7800 4239 13298 170982009 4392 900 6800 3484 8777 14677 5287 4100 7100 4239 13626 166262010 4534 800 7400 3641 8976 15576 5529 6300 9600 4239 16068 193682011 4683 800 7400 3805 9288 15888 5785 6600 10200 4239 16624 202242012 4837 800 7400 3976 9614 16214 6057 6900 10900 4239 17196 21196

AAG 1990tO 1995 2.6% -28.1% -28.1% 22.1% 1.0% 1.0% 3.3%S -23.8% -20.4% 30.8% 4.6% 5.0%1996 TO 2005 2.9% 12.8% 27.8% 4.7% 4.5% 7.4% 4.0% 23.1% 30.2% 5.0% 7.1% 9.9%

1990 TO 2000 2.7% -6.5% -7.7% 13.2% 3.1% 2.9% 3.6% -6.5% 1.4% 18.1% 5.3% 6.5%1990 TO 2005 2.8% -2.9% 5.5% 10.3% 3.3% 5.2% 3.8% 4.9% 10.5% 13.0% 6.2% 8.2%

20 year 1992-2012 3.0% -2.99. 8.6% 5.0% 2.7% 5.4% 4.1% 8.0% 10.1% 5.3% 5.7% 6.7%

NotcTe: IliMm Wlterative has higher natural gas fDr elecricity and is consklered as 'Sceario r'.i NAe: rac M illdi>i-uasl. {t~~~0

i. ^ _~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~a

SWi&O 1 cOALDEPAmFOCSr -viwrNAm

ECOOMIC ND O1HER PARAMIERS FOR FORECASTINLong-Rm

GDP Gnz_R_es_ G1OP E Pflce19900 192-S6 19W-2012 _ Ll 919g j - 98 j7-2011 @iB

$qloi*ae 3.1% 4.3b 5.9S% 5.4%CnW* 4.5% 7.4% 7.7% 7.4%kwLl*y 60% d .8 67% 88% 6.8% UUSR 0.70 0.70 06TradW*g 4 9% 6.6% 6.4% 6.1%

TdO GDP 4.4% 54% 6.4% 6.0%

E4otMG% 7.0% 4.5%

P e!ft GMs Ris POP Ebsl

U$m 3.2% 3.2% 3.2%Rui, 1.7% 17% I7. RESEI TIA.L 0.60 060 06Tom 2.0% 2.0% 2.0%

COAL DEMAND (o T0NSOW vwe l)

Domnec uls For Ebcl Gen TOTAL GROWH Y ICI,EIRY E9E NORTH SOUIH E1POR7S 000M TCNSWYr co

*a imuma mffldmbur frV oana nndm nnn gird(HOb Ga) (LoW GaOB (II9Gsl5) (LO"Gas)

1990 1000o 14156 160sm 160 0 0 076.0 4791.0 479101901 11295 1490.0 1000 1000 0 0 10000 46196 46198 -36% -36%1m 11828 1505.2 430 1430 0 0 15000 60180 56180 216% 21%691093 1238.5 16206 B 600 0 0 1605.0 4964.1 4964 1 -116% -116%194 1296.8 1536.1 200 200 0 0 1717.4 4750.3 4750 3 -4 3% 433%1996 1357.9 156i 6 300 200 0 0 1837 6 567.2 4947 2 6 3% 41%1096 421.8 1567 8 300 300 0 0 1966.2 52556 52556 41% 6 2%199? 1489 6 15836 500 400 0 0 2054.7 5627 8 5527 8 7 1% 52%1908 15605 1599 7 60o 6BO 0 0 2147.1 5907.4 5907.4 5 09b 6 9%1S99 16348 16161 900 900 0 0 2243.8 394. 63946 8e2% 8 2%2000 1712.7 1632.5 800 800 0 0 2344.7 64900 64900 1 5% 1 5%2001 1794.3 1649.2 700 700 0 0 2450 2 6593 7 6693.7 1 6% 16%2002 1879 7 1660o 1100 1000 0 0 250 5 7206 2 7106.2 9 3% 7 8%2003 10983 16630 800 1900 0 0 2675 7 71280 $2280 -1 1% 156s%2004 2063.1 17002 1400 2700 0 0 27681 7959.4 92594 117% . 125%2005 21613 17175 1000 2900 0 0 2922.0 78008 97008 -2 0% 48%2006 . 22643 17350 1400 3500 0 0 30534 84527 105527 84% a 8692007 2372.1 17527 1400 3900 0 400 3190.8 87157 116157 31% 101%2008 2485.1 17106 1000 4300 0 900 33344 8590.1 12790.1 -14% 101%2000 2603 5 1788 7 900 5400 0 g0 3484.5 8776 141766 2 2% 108% W2010 2727.5 18D009 800 G000 0 1500 3641.3 80757 15575.7 2.3% 9 9%2011 2857.4 185A4 8a0 50o 0 150 3805.1 0287.9 15887.9 3.5% 2s0%2012 2993.5 1844.0 So0 690m 0 1600 3976.4 90138 10213.6 365% 241%

* AU 4.s% 1.0% -2.9%b 7.3% ER ERR 5.0% 2.7% 5.4%

COAL Db , ASSAESl f EEli LIE BY END1991,1.9 BWYRGASIN MINCOAL CASEA 0.9 YR GASINACOALCASE

sCRIO 2 COAL DEMAND FORBCASr - VIEr NAN

ECONOMIC ANDOllER PARAMTERS FOR FORECASTINGLong-Run

GOP GroeRtes GDP Ea Rnce190o-91 1992-96 1907-2012 Aerom .itikto 1991-96 1MLZQ2011

AgIca*e 3.1% 5.3% 8.0% 6.9%Cm* 4.5% 8.8% 8.6% 86%hJUI5y 6-8% 84% 8.5% 85% IfOUStRY 0.75 075 06Tredar 4.9% 7.5% 7.6% 7.6%

Tcbl GDP 4.4% 8e% 73% 7.2%

poWd AM% 20.0% 3.5% end laWM aer 2005

FPconGrCh Rdgs POP Elea

udm 32% 3.29b 3 2%RuS 1.7% 17% 1.7% RESDENTIAL 0 70 0 70 06TotS 2.0% 2.0% 2.0%

COAL DEMAND (000 TONS cr vealANo4AL Noanec uses For Elect Gen TOTAL GROWTH 0IRS 1 WY RESME NORTlh soLH EXORTS 000 TONS g lYr

mfrn cadn nl flu nSrn Snmu -nm mam(HO Gas) (LoW Gas) (H11g Gas) (Low Gas)

19S0 1080 0 1475.0 1560 1s8o 0 0 6760 4791 0 479101991 11331 1492.8 1000 looo 0 0 1000.0 462586 4625.6 -3 5% -35%1992 1204 3 1510.3 1486 1577 0 0 150.0 5700.6 5791 6 23 2% 25 2%1993 12800 1528.3 8S0 800 0 0 18000 54083 54083 -51% -66%1994 13804 15465 300 400 0 0 21600 5366 9 54669 -0 8% 11%1995 1445.9 1564 9 400 500 0 0 25920 8002 8 61028 11 8% 116%1998 15367 15835 500 600 0 0 3110.4 67306 68306 121% 119%1997 1635.0 1602.3 1000 1000 0 0 3219.3 7456 6 74566 10 8% 9 2%1998 1739 8 16214 1000 1000 0 0 3331 9 7692 9 7692 9 3 2% 3 2%1999 1850 8 1640 7 900 1000 0 0 3448 6 7840 1 79401 1 9% 3 2%2000 1989 2 1860 2 800 1800 0 0 3569 3 7998 7 89987 2 0% 13 3%2001 20951 1680 0 700 2500 0 300 3694 2 8169 3 10269 3 21% 14 1%2002 2229 I 17000 600 3400 0 600. 38235 83526 117528 22% 144%2003 2371 7 1720.2 1000 3400 0 600 3957 3 9049 2 12949 2 8 3% 25%2004 25233 17407 1900 4600 0 700 40958 102598 136598 134% 134%2005 26847 17614 3200 5500 0 15M0 4239.2 118853 156853 158% 148%2008 28564 17824 3200 5800 0 2600 42392 120779 17077.9 16% 89% "U2007 30391 18038 3200 4600 0 1100 42392 122818 147818 17%- -134%2008 3233.5 1825.0 3300 5400 700 2400 4239 2 13297.6 17097 6 83% 1s 7% 2009 34402 18467 3200 5400 900 1700 42392 136261 166261 25% -28% D.2010 3660.3 1888.7 4500 600 1800 3600 4239.2 18068.1 19388.1 17 9 16s5% a 2011 3894.3 18910 4700 8400 1900 3800 4239.2 168244 202244 35% 4 4%2012 41434 19135 4900 e900 2000 4000 42392 17198.0 211960 34% 4 8% 4 4

AgPM 84% 1.2b 6.1% 7.7% ERR ERR 5.3% 5.7% 897%

COAL OEMW, ASSUWES THE EHV LIrE DY END 1994. A 1 9 BCo"YR GAS N MN COAL CASE AND 0 9 BCuWYR GAS IN MAX COAL CASE

- 30 -

Annex 1.18

ULECTRCITY DEMAND FORECASTS AND GENERATION REQJIREMENTS

Contents Page No.

Methodological Note I

Tables

1.18 (b) Summary - Electricity Demand Forecast For All Regions - Scenario 1 21.18 (c) Summary - Electricity Demand Forecast For All Regions - Scenario 2 31.18 (d) Electricity Demand Forecast - Scenario 1, Northe Region - PCI 41.18 (e) Electricity Demand Forecast - Scenario 2, Northern Region - PCI 51.18 (1) Electricity Demand Forecast - Scenario 1, Southern Region - PCI 61.18 (g) Electricity Demand Forecast - Scenario 2, Southern Region - PCI 71.18 (h) Electricity Demand Forecast - Senario 1, Central Region - PCi 81.18 (i) Electricity Demand Forecast - Scenario 2, Central Region - PCI 9

- 31 -Annex 1.18 (a)Page 1 of 9

ELECICIIY DEMAND FORECASI

Methodological Note

L 1. EBlectricity demand is considered in three categories: industry, residenial and "other'(seMices and agiculture). Industrial demand is related to growth in industrial GDP (demandelasticity with respect to industrial GDP of 1.3). Residential consumption is related to urbanpopulation growh (elasticity is about 2.5). The 'other" category is related to the growth in GDPof the respective sectors.

2. Electricity demand is forecast on a regional basis for the customers sered by each ofthe three electricity companies. For each region, two scenarios are considered: Scenario 1 and 2.Power generation requirements in each region are calculated based on assumptions of technical andnon-tnical loss factors, and projected transfers to other regions. Under both scenarios ofeconomic growth, the northern region is projected to transfer electricity to the other regions; thesouthern region receives electricity from the north and the center beginning in 2000; while thecentral region receives electricity from the other regions till 2000, when it begins to transferenergy to the south.

3. Energy Institute projections are based on different assumption

of Energy/GDP elasticities, growth rates etc. and are indicated below:

1995 North Center South Total

Industry 2480 520 2670 5670

Agriculture 650 117 300 1037

Non-Industry &Transport 600 116 350 946

Household 1870 344 1720 3934

Losses &Auxiliary 1400 203 1280 3015

Total 7000 1300 6320 14600

2000

Industry 4900-5400 710-1120 3730-4256 9340-10776

Agriculture 780- 820 150- 220 434- 436 1364- 1476

Non-Industry &

Transport 700- 780 170- 240 400- 490 1270- 1510

Household 4000-4800 530- 900 2486-2868 7016- 8568

Losses &

Auxiliary 2020-2300 340- 520 1830-2050 4190- 4870

Total 12400-14100 1900-3000 8880-i1010 23180-272g2

SCIUAXO I SUMMRY OP ELBCITCYr DEMAND RISASIS 1)R VUr NAM - ALL R3h1ONS

TOTAL BP .L ft.EhG .1 TOTAL ELECTRCIANNUAL 61BA ES PORIO NONTECH TECH ENEROY AERAGE MWMM RBE NflALS"LBANOCONNECI)48 CO5JWlt4 MOR

E Rmacr 6 CBy IR _ %W COa IN LESS 00040004 86011 DE454 R0067 bO hi FAE FISCAL OROK W4H0 N I 0H C0 00SOIRCITO 0EMN LOAD RES Coaubo Ces 40 POP4W0 PROPORTIONOF SAL8U ul MAt RE mE_ B 2 B -T 1 M2L m M IL -ML FAFTIR -MOo Ilim al _ con mOOFR801'AIS __

I0oo 29e4 20484 33205 U499 5034. 84.4 82250 00 5S% 220% 81221 0.70 14f3 20484 10521 1t9 s05 102 4S5% 325% 213% 1000%1881 32)21 2111 13034 los9 539 7400.e 84% 828? 0O 678% 22.6% 83u80 IO2 15244 21131 40088 447 10 eBO 4089 480% 314S 201% 1000%1041 35201 239 1444 2243 sns.0 04124 a 1 73048 0o 57s 218n o0s 0ll 48343 22m0 4508e U' 20 884 140l 4t2% 315% 203% 1000%0) 383)1 2501.3 16885 2030 0286 87408 18% 70209 0o 8SM 231n 408584 0o0 171 B 250813 12238 802 20 SS$ 4228 484% 318% 200% 000%

4104 4410.0 22 4S8 4 e. t 1884 8G as 04128 % 8s408 e o0 8s 208% 4481.0 09 1O 321 t t 2124 4292s6 s9s 2 1 70n n30o 48S 317s I01M 0Da0s4S85 41408 201 46848 00 8n2 9488.4 81% 03142 00 8.1% 200% 124338 oor 24482 280e 43028 120 22 n23 1315 488s 318% 1841 tO00S04 494831 322 4924. 00 877.4 4070 t 3 64% 104049 SB 8.% 402% 1433447 0oe 22148 32241 14425 7ns 22 736 ItBI 401% 318% 101S 10001

fell 34. 3248s 20144 0.0 24 191177 02% 140423 00 54% 48.I% 14309 017 24340 32480 40023 946 33 102 4s4 403% 341 i I0DS 40o0sl8e 88. 7328T 323543 33 780. 1248336 03% 1164315 00 01 17.7% 143042 o8 38443 37381 41871 S94a 24 01 I44 408S 3101 f8es % 000%tsts 8404.3 4024. 2408I 00 0323 434128 S7% 124044. 0.0 its% 48.% 484801 o8t 28021 40245 l4844 120 24 783 174) 499% 313% 488% 4001O208 8 2I 4324.) 28688 00 &941 144044 83% 430438 00 80n la2% 47es50 087 20C73 42343 4 I4243 12 25 yes 8S04 102% 113S 187S 1oo00204 108 498 2198s 00 8e6 l40020 a 8%ts 4401 00 41% 459% g8am0e 081 322705 48084 3SO2 781 28 544 19508 0O80% 31.0% 488% 1C00%32m 0382X I 021 34438 01O 041 4n7321 63% 483338 0o *s% 152% 203400 08r 384U4 502705 te93 83 217 634 2077 508% 30cs 484% 4000%2805 902Y2 41440 3241.0 0o 948 IBM94 03% 43s 7805 00 45% 4 248 o10n5 08 214.0 50414a t40713 0O 2.7 801 2200 114% 308% 483% 4000%2804 8940 6340 34040 0e 400.3 202340 83% Ig8oos 00 4s% 137% 22484I 081 3008 843140 208e3 080 2 084 22432 514% 30% 1082% 400012008 81m$) 02I00 37014 0o 4431. 319253 83% 207678 00 45% 131% 202448 087 43001 8288 246543 841 28 082 2417 511% 302% 184% 1000%29 41t02.8 81842 403? 00 40068 233641 711 225304 00 401 134% 274144 oar 40344 8184 2 22031 9g3 30 9e1 2702 50% 2left 180% 100%200 130815 I 12801 4370.0 00 4809.0 204008 04% 244310 00 40% 120% 292401 087 49444 12850 23081 10280 23 041 2780 022% 2 89% 419% 4000%2000 1348.2 18480 41488 D0.0 202 27732.2 04% 241409 0o 40% 12.0% 350052 887 53701 14480 248 0 1071 32 938 2984 0201 248% 178% 0oo002000 15402.0 8Mt400 84s oo 4350.0 300544 84% 288814 0o 4*% 44S% 339093 081 81873 84084 70700 1124 33 804 34 0 028% 294% *17% 1000%200 16331.1 o040.8 8418.5 0.0 I40.3 32614.0 84% 311444 DO 40% 1% 280884 0 o81 83382 8O10 2884 0 1178 34 973 3347 531% 293S 116% IODOL204 ISMS 88011u 0408? 00 477.1 3300 8.4% 27310 o0 40% 105% 294429 08r 8120 88048 24170 4228 35 so3 *M57 834% 20% 4101 4000%2042 488.8 41583 03828 01o 410.4 342741 04% 348738 00 40% 400% 420278 o88 12125 105503 2415 4295 38 1013 3180 537% 208% 414% 40D00

A0921 0 .01 T1 5.5118% 84% 84% 70% 7M

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- 3 _ Annex 1.18 (c)Page 3 of 94 gg{ttt?ggSgnP0tRgSggvggg

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QAOED Ow.4b Adas C00P Pr G E*s

Awled 310% 469. 66%cowe 4.611 1011 701b*ab= 601W 85# 6.6% 1146 I 30 016Teai~ 451L 6011 60i% 01w_A.im 2 Z O6

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ANNU8AL SALES NON2TE1C TECH REB3UED TRANSFER GENEtRTION LOAD RES6EtNTAL S.LESAND CONICTI S CO74SU1PT1ON PERELECIICT EMAND W R604. Y CAWMORY (1 OEWID 01 FOR REGON TO OHER IN FACTOR PEOX Rt? Lin R 1PICAPIrA

FISAL GRO 4ECH RE1 8WWTH REGON REGCONS REGON RES C*rALtfl Consp MMt WIV' iE S6REmL 6 GEL1 18b6 A I o 1 9 GYM Gym GM N _H mL t C s PERSON

132 14620 eg7o EG60 464 3162 35376 31750 71 291 4ES2 4 48772 700% 7EES S670 46s 20 338 1134t1s8 15760 9324 9022 502 3662 38270 62% 3410? 7% 28% 62ae so 62868 700% 8630 9324 4526 241 21 314 120121992 t7as2 t 104l 9818e 409 3909 41172 761 356 7% 27% 55840 66 6630 695% 9172 10146 4781 266 21 320 12721B3 18636 11037 1ms2 296 4192 44314 761 3902S6 7 27% 6sa9 32 60 690% 9S38 11037 260 269 22 327 13471964 23103 12019 10329 161 4497 47868 76% 43041 7% 26% 64240 63 630 a 6es 6% ton66 12009 4336 234 23 333 1426INs 21601 1636 116s0 00 4045 50552 60% 46517 6X 25# 67416 1459 8210E 6801 11318 13JSS 535 3t0 23 340 14671868 23)44 14.'16 12419 00 4310 6488 8.0% s377E 6% 24% 71826 1697 867B6 O60% 12068 142S S653 317 24 347 15741867 26642 15310 1338) 00 4692 Wm I 80% 54339 6% 23% 76484 1731 93844 680% 12848 15310 6224 272 25 354 18661898 2783 1649 1443 2 00 494 63623 801 5529 6% 22% 81668 1U2 9sE 860% 13)63 16489 5soe 284 25 3)1 176313s 3e16s 17788 1558 00 521? 6Ei 80% 63474 6% 21% am91 1864 10499: 6a% 1497 17758 E62s 267 26 3)8 8s662eo 32706 19126 16772 0o 862 74168 80% 6ND4 6% 2% 9s278a 1004 182748 6e0% 1.m3 19126 7116 311 27 375 19762Dt 3U470 26696 1Eso 00 4943 73112 661 74148 ss 20% 93564 124 100104 B#0% 1867 0598 7440 325 28 333 2652E2 3)467 22184 19490 00 6272 86414 80% OD142 6t 19% 105640 340 0s8o 5 0 G% 1772 3384 7780 340 29 391 21872E3 41718 23)93 21010 00 oo 25 92245 801 3421 ss 18% 112494 935 103144 86011 Iwo6 23693 6136 365 29 3s9 2316634 45243 25732 22649 00 6S32 93626 80% 93124 61 t7s 1203.1 -63 14U61 6e0% 20160 25732 6s6 371 30 466 24612El 48656 27714 24416 00 6406 107630 60% 101195 6% 16% 12EaS6 E2l 105s 860% 21504 27714 064 388 31 415 25962r6 6312 29848 Z2O 00o 6469 1 48.9 67% 2483)0 41 16% 13372.5 .2197 114765 6D0% 22S63 29848 9300 406 32 423 271621e 61S70 32146 a73 00 s38 124066 80% l1in7 4S 1% U49860 3217 113790 86a0% 242a 32146 9724 424 33 431 277mm 628 6 34621 30868 00 6234 13028 80% 127792 4% 14% 16S844 16s 171524 eS0% 26162 34621 10168 444 34 440 3047no 61873 31a7 372 00 66f7 144789 8111 13t32 41 13% 286424 3219 19614 s#0% 27939 37M7 10632 46.4 35 449 3227M0 73486 40168 364 4 0o mo 155420 8o% 14310 411 12% lmso 4an6 225800 s60% 2940 40158 11117 466 36 460 34182an 78628 4330 3S36 oc 7s66 t"Mo 80% 1613g6 4% 11% 1a s76 6414 2640z 6 6ges 13076 4s20 11626 487 37 467 3)202212 36154 4686.1 4130s 00 811.4 IM4 80% 174469 4% in1 2sS0 am49 2a331 980% 34066 46861 12166 530 38 476 3)34

A0920312 86$ 79% 7611 37% 77% 80% 67Y% 80% 69%

4i-

00

St(A N02NOin2_hUM POVOR CONANY fi NIECITWY DWAND}:St 1)U - vIrNAM

Apkdm 10% M6% 656%tM* 46% aft% 6.%

M~~8y 60%~a 18% 86% a4 08TWM 4.6% 7.6% 76% G c 33 06

3DPN13H 42% 19% 71% 70%

U&INIPon0111cth R DP*

12% 14% 34% 36343 175 as

nUv 9mn3% p _tS7210t 247 06

p bLd ofgQIMFP Rw

Rw I 7# t17# t 7% 2i6 E63STold 20% 2D% 20% 3D6

GENERIl43ON REOU8IEMENT4SLOSS FACTORS OE197U09 .TS.LOAW RF5GOTL TOTAL ELECTR3ICITANUAL SALES NONTECH1 TECH REcIiRED TRANSFER GEiERATio LAD RESIDENTIAL SALES AND COtECTO1 s COT TIhON PER_ If EMMAND WREGON 8 CAnEoGRY G DEMAND IN FOR REGION M OTttER IN FACTOR PEAK ID a s CAPrTAFISAL O l lERt NOT EGIt GROWtRG REGION REGI REGION RES Consima Cons per 3M4t -POPWNFjZa MS f==Sa n RAAn osEs mri GWh l % _ %f GWH t GWH GUM % mNH Gym tI ng C- l t PERSOf

132O 3420 8570 a 6a0 464 3162 3 376 31760 7% 23% 4AI2 42 48772 700% 74885 370 4285 2 0 308 1341931 3392 9324 9;30 604 3Es2 348e2 ss% 34296 7% 28% 6258 o 5s3De6 700% 86576 932 4526 241 21 3t4 12e91ts2 7E61 410196 9399 421 463D 434 2 104% 3M46 7% 27% 6754S 56 68195 486% s468 10196 4086 279 21 320 1313t63 28s5 I t119 1t0o2 312 4443 463.7 06S% 42212 7% 27% 63416 139 64666 690% l3ow2 31149 6302 296 22 327 14271394 22S 2 12192 12127 174 4394 51908 to % 4B440 7% 26% 32311 492 743 1 B6s% %11s1 32192 6416 315 23 333 1542 11tsi 2298 13532 13336 0o 452t0 ss4 89% 51964 6% 25% 76339 1653 s6es GM0 1t2Eta 13332 5750 334 23 340 16s213s 3415 34578 34707 00 4946 6746s t0o 5701 6%S 24% 82430 3d3 9777a0 80% n333B 14678 s6o6 354 24 347 1B06 .137 33838 16313 16196 00 64D91 393.8 306% 6331?7 6% 23% 9023 3667 305633 480% 3613 3 3648 3 64265 320 26 364 1969 L193 3sEs2 17130 M7836 00 59D I wo5o 07% 781 6% 22% 358 7 106928 M0% 156s12 17130 651 337 25 331 23261329 4Q71 1669 19643 00 6845 84B32 107% 70481 6% 21% W07M9 -18 102709 30% 38048 14869 7116 364 26 368 2307263 4234 2et29 23630 00 7C53 94047 107% E63 6% MD% 1375s6 .412 103438 480% 19735 2Q129 7489 373 27 375 250534 M s9 21820 MM a2 00 6430 a 02379 94% 9449 5% 2D#% 32389 2E02 10Q579 Go0% 2M39 21350 7832 393 28 383 20682Ds 6073 23363 23232 00 037 3139s3 108% 3a636 56% 9% 340732 .431s 99s2 480% 23625 23653 235 413 29 39' 29362003 64106 25540a 2a68 0o 7703 12S338 108% 33e633 6% 38% 1±439 -4676 307339 80% 2ss4 254 0 8730 435 29 39e 31712Q04 726 m93 31.3 0o 6437 I449 109% 13363.2 s% 7% 3b ts4 t44 113894 800% 2326 27793 9387 458 30 406 344620C 6ts 30128 36534 0o 9243 35636 109% 34C43 5% 36% 364e64 -2830 37674 8 0% 31034 30126 969 482 31 416 37462 39Q 336 9 3380 o0 8104 370194 96% lm 9 4% 16% 331632 low 220702 80% 34014 32659 10176 so7 32 423 40253 10Xt47 3640.2 42488 00o Es 38s2.2 109% 371s36 4% 15% Z72t44 3371 22Es4 BB0% 37292 36402 10709 533 33 431 4376233 33482.4 33176 4678.9 00 9746 233636 130% 1B789 4% 14% 243646 967 33216 so0% 40322 33376 11271 563 34 M 0 4763MD 231852 41699 61527 00 3693 23267t 130% 22387.8 4% 13% 367323 4978 317103 480% 44877 43s9 9 3362 S91 36 as 51832310 14452.0 409.4 6744 00 3373.8 2S9s4 It0% 246458 4% 12% 2934 2 5270 346102 480% 33102 45594 248 4 622 36 458 65412311 15244 4882 61118.9 00 3285 3303 I I 21333.6 4% 13% 322136 6619 3325 480% 48390 48932 13138 66 4 37 46 7 614 2212 1s7486 58 fE8s 0B 1416D 2 338422 IIIt 427. 4% t0% 3342 1MO8$ 463542 480% 78170 58 13327 689 3.8 476 Gm?,M2131s 12 t232, 8 10.1% 66% 306% to06% 94% 103% 0 6%

*0 00Oa

02

SCEN(A30 I S4JiMN RMoN IpOWlB COOANY a ELZRITY DEMAND I3BDCAST VES NM

LotRwiGOP mllth Rdlet GOP P.ce

131-91 131-3 137- -20112 AWeNI JISk to ***w~g F..IRM

A4~*wl 36S 46S t6S%

7.5% 76% 76% h4olry 130 06Tn.da4gh., 65% 6.0% 65% O _i8i4Su 1 Os

GDPSUl 5i 60% 686* 68% 6.6%

khtim Polddkmn Gwh RkWeotid POP clbt

32% 3.21 121 1900198 27s 06__________________________ 1697-301 241 06-30* l130 2111 241 06

Poolnhb Gwegh 1990DL pop nuLmnd

Ruag t7% I7% I7% 182 722%Tcl t 20% 20% 20% 252

GENERATION REO1AREMENT6ILOSS FACTORS ENA Gy OTAL ELECTRICITY

ANLJAI SALES NON.TECH TECH RECUIRED TRANSFER GENERATION LOAD RESIOENTEASALES AND CC.4NFCT S CO1NSUPTION PER_ELEIICTY DEMAND I lTEGION Y on DEMAO IN FOR REGQON TO OTHlER IN FACTOR PEAK Rs kt RES CAPITAFIECAL OTHIER W4UNSERWVED t TECH REGION GROWvTH REGION REGIONS REGION RES Conmcr Con pe 16*1 POP ~RI17Y-aga RESDENT SEIMCFS 0E R -LOSSE TOA % GWH _ %VL % GVet GWH GS % MH GVH Mm Y, f10C Cm, Mi t'ERSON

IM 11t30 I0 180 3705 Es4 3s8a 28247 2S796 6% 17% 33231 134 34671 700% 5419 10160 520 20 252 1090ts19 14481 9920 38143 1220 142S 30s0 90% 29244 41 17% 3564c 134 396o0 710% 5730 9920 5221 141 19 267 11641692 119 3 1079 3 4120 1735 1644 34034 103X 33006 4% 16K 33603 134 39343 726%5 6078 10?93 55lS 294 20 262 12341993 1?442 11743 44 6 16DS 1670 36376 82% 33302 4% 16% 41741 320 44941 71561 314 11743 5626 311 20 267 t3191984 19143 12776 4734 1277 1810 39740 78% 3SSS3 4% 16% 45X61 344 41811 700% 736 12776 6164 326 21 273 14101996 21010 13600 a g76 00 1962 41948 S6% 39986 4% 1- 49066 916 39901 660% 8466 1390 6s0o 347 21 278 Io8 a1993 230s8 16124 6441 00 2128 4675o0 S1% 43622 4% 14% 53198 .1369 39308 660% 93211 15124 6Bss6 Y6 22 264 16121997 25306 164a 53665 0O 2731 49760 D 8% V4549 4% 14% 57526 .1393 4386 660% 9960 162s8 716e 313 23 289 IT79Is% 27773 t7542 6322 00 2489 54127 86% S1638 4% 13% 6216 .133 4921 6 660% 10761 17642 7s07 326 23 2965 1631695 3D4s1 18993 6186 00 2392 6s1a2 88% 6190 4% 1321 87293 .13tG t263 660% 11639 18193 7s60 343 24 3C1 19662D00 33453 D348 7347 00 2912 S060 80% 61148 4% 12% 72796 .2179 610D6 660% 12691 2334t8 020 358 25 307 26SS-2n 39716 21915 7920 00 3150 69700 8s% 66660 4% 12% 787657 2070 431 7 660% 13922 21916 ass2 6 26 3t3 Z224mm 92s 23602 8B38 00 3409 75844 86s 72435 4% 111 66217 .3101 54207 e0% 1472 9 23602 6974 392 26 320 2373ax3 44223 23419 9204 00 36sa 8236 88% 76947 4% f1% 92219 .173s 74859 660% 1595C 2s419 9384 409 27 326 i,32Z004 4836 272377 9922 00 3992 89326 88% 6s4 4% 10% 9s3c7 2C29 79s17 660% 17263 27317 6912 428 28 333 27c1mmOS M397 2948 1396 00 434 6 9779 4 a% 93C4 8 4% 10% G366 0 32 1osss 660% 1879 4 2946 1026 9 446 29 33 9 288 33916 69461 3175 11530 00 4732 103479 89% 101746 4% 10% 118310 169 116620 660% 23463 JI755 10728 468 30 346 307820W 64161 342DO 12429 00 5153 115944 89% 110791 4% 10% 12 6 949 133316 660% 22282 34200 11217 490 30 3923 32362D6 70417 I 3 4 1339 00 5612 126261 B9% 12U49 4% 10% 140290 .3710 103190 660% 24265 3ss4 11729 512 31 390 3s382039 7362 3670 144.44 00 Si1l 137698 89% 131396 4% 10% 152706 s226 1D3s36 660% 23428 3370 12234 536 32 367 37482310 84817 42724 15571 0O 656 149769 89% 143112 4% 101 166410 6361s 99760 660% 237B2 42724 12324 560 33 374 43002D3 s11 a 46014 ts785 D00 2st 16313 7 89% 1315B6 41 10% l81s63 .8119 131Y73 660% 313s2 4EC1 13409 696 34 362 4271D12 102163 49857 10s94 00 7698 177713 89% 166165 4% t0% 197453 .989 101669 660% 34153 49567 14D21 612 35 390 4S62

AA0,02012 97% 79* 77% 861 866% 89% 841 64% a 7%

:I

SCREM2 vmcAmlun..m @UOMMY1 EWULWfl DMANJIDUCMTr- VIE! AN

w OP Gp Rd GMP Pie

p 1611 6% 681

Cu, 481 6 0 0% OS is Os

GOPE O 5t5H GAS YU 81 0.6

amp.dime _ Rwwm POPd

121 14S 34% 1990,31 216 06

" lf-ltil; 232.281 l4a 06

P_tdho ON&IPOP Ruga

Rwd 17% 1711 11 182 122%Told 201 201% 201 252

an6S FAC70M 7TTAL EC1ROI1ALAL SALES "OTECH IECH REOURED 11441SFER GBERA71OI4 LOAD RESIONIIAL SALES a lC PE

ELPd94IIY OEUAIN REGOd BY C4E G Cgf De&WI) 54 FOR REGION TO OIfER N FACTOR PEAK REgS k 6 CAPIAFISCAL 01D5 M L9 END C REGION OR=MI. REGION REGONS REGION RES Cau tme Cain Po M'MW 70P IVMIMAL E MStm tt^SYIMES -te AM= E1 MAUL _ GV %at fgm GWttGH am t s x lw GYMt -aa YtOM can mm l PFQS2

I9E 14481 9t0 3283 172o 142.6 3490 901 2244 41 17S 35680 134 3E900 71t0 s530 9920 P21 141 29 2Y7 11541 994 a 1 113*8 480 '769 157.8 34833 127% 31476 41 161 39444 134 4484 2511 6211 1034a 6543 322 20 282 12a.1934 too1 11062 4180 170 1743 30D1 1061 359a7 41 16S 43886 251 Eas6 115 6569 118t2 5936 342 20 287 IV77 11994 at22 1237.1 m27 36 1932 4400 0to1s 39121 411 161 A491 so 49467 7001 1016 1371 6247 363 21 273 1s661936 23663 14194 5792 1136 2141 45506 106S 43S2t 41 16% 53632 43 4S242 690% s486 14164 8833 3E6 21 278 1646 W1956 3730 Isl0 6416 11t6 2374 671o 111t tE67 4% 14% 6330 .1137 4780 e 6851 9;91 1810 1042 409 22 284 199 -1997 3W29 1812 711 S41 2526 67138 1n0.% 64152 41 141 65639 s1139 6349 8811 11019 16812 7411 3B9 23 289 16911988 34114 11224 17a9 786 2805 63961 1081 SW1 41 131A 72822 -m3m 62262 676% 12282 I224 g799 38 23 28s 21401949 35S33 97655 sns9 84 3216 mlst1 109t 67110 41 131 530 -3247 3910 670% 1395 19755 838 409 24 3D1 233625o 43W6 21414 9672 326 360 71546 t091 74761 41 12% 8st1 I 13am 71971 611s 18278 21414 s38 430 25 37 2550231 47.6 2mt2 10717 00 3943 e624? 10911 8094 4% 12% 9534 mg 1a1s74 880% 17 1 2321 2 5t90 463 26 313 21852532 s18 25161 11874 0o0 470 97323 1141 1 934 411 11% 16240 i63m 1261a w0as 1E44 25161 9567 476 26 320 3942M03 63102 21214 13157 0a 484.4 1aa.1 attS# 16333 41 111 121092 294 144772 86 % 20944 27274 14s sol1 27 326 33252D4 11337 2935 1478 a0a S3W1 1285t1 1161 11480 411 11 134279 2848 162739 8S011 22 21s86 1096 628 28 333 3636mm MM4 320408 I612 00a 893 134939 116S 128846 41 101 149821 627 16w31 880S 3891 3 32048 1111 866 29 339 3S76mm 63111 34739 17ns 0 0 9a 9 150496 116# 14)357 4% l01 162117 .381S 131067 880% 23922 34739 1735 5884 30 346 4350mm 15369 31755 1929 a0 1488 16802 116% 18686s 41 101 a 1651 .469 139701 6S01 3231 3786 12351 615 30 3S3 4782mm 11sS19 419 21971 00 8340 187649 1171 17933o 41 111 20499 -2381 1s889 640% 35632 4819 13798 647 31 3 0 214209 131726 44247 24344 00 9317 28s633 117% 5316 41 to0 2362 lz 171564 6601 40287 44247 13679 881 32 37 6710280a 1U9t16 4163 2943 00 10412 23432 111% ZM6S 4% IO# 26t2s2 6ts4 199652 660% 3439 47963 14396 717 33 374 62562Dn1 13449 51991 2836 00 11638 23154 nE#% 2826 41 10% 2530 -7221 2167s0 6601 37s36 61991 15150 764 34 382 9462012 19310 GM?7 33114 00 13a13 323e2 1181 27s789 4 1011 326336 .1146 21t67s 680% 3439 S8636 18844 794 35 390 7516

MGM21=2 131% 8861 0e0% 111 112% 1141 1o6 9111 97M

'00

SCIAND I CENTRlLMUiNa PIWUU0CWJy MiUwii DANMDCAsT- Vir NBM

Rd"P GOPh Poc

AWkcaua 2.0% 36% 60%ceb 40% 80% 60%

60% 60% A0% k45,tI 1 30 06T _u4hf!aw 40% 4 6% 6JIS O6uvAcn 1 20 0 6

GOP CElTIt 3 4% 42% B54% 62%

ummPwdbn GNAb Rftiwd POP *1

32% 32% 32% t190.9 275 06,b U U aL Caw OI87.23D 2 41 0 6

30% 2002-2111 241 06

PoWJm GAwh t991t POP RW

Rwal I7% I7% 1% 76 79 2%TOM 720% 20% 20. 96

GENERA1I7 REOUREMENTS-LCSS -FNERY ENERGYTOTAL ELECRIICITY

MAL SLE NO1TECH TECH REOURED TRANSFER GENER,ATION LOAD 11ESDENW S_ ES ANO CONC S CONSUMPTION PEREtfCT50 CEMAM 8NREGC . BY CEG f IGwt4 D_ VND IN FOR REGION TOOER IN FACTOR PEAK RosWia hkm RES APIA

FSOL 014E5 UNE OSD N%4Ea RE6ION GROWIH REGON REGlOl REGION RES Corawam Con pr MWW POP lOSWYRfEMA NlOIY ESDT Gym f N I£SS%ZHvS GWr t GWH GWH S W GVWHmm , Cm mdl PERSON

X9SW 1954 1734 te20 151 282 6141 4708 s% 12% s638 V6 3S78 701% 918 174 1166 15 96 625s581 2431' 1587 9tc6 169 302 U49? 59% W S# 12% W2 *I4 4192 700% 584 1667 122 66 Is 97 66 192 2218 2363 1127 149 323 WSOa 68% 6396 6% 12% 6482 -189 4512 695% 1061 2063 1290 69 16 99 579

1983 2360 233 ll8 138 346 Gas 60% 6781 5% 12% 6923 .352 3403 90% 1146 2233 1362 73 I6 101 Go8 6t934 314 2430 1252 124 371 wo 68% 6196 6% 12% 7419 164 a77 9 86% 1236 2A30 1439 77 17 103 839 0CNS6 237 2544 1319 00 314 694 40% 8940 4% 12% 7858 -53 2328 ¢0% 1369 244 1520 81 17 166 693el0 2371 276 1390 00 337 746 72% 7118 4% 12% 824 .3 6344 es0% 1457 276 1896 as 18 1O? 697R37 3038 3;s8 191 00 361 586 71% 7626 4% 12% 9023 -38 6343 660% 1631 3Dg8 1S9 73 t8 109 732Is 3234 3236 1898 33 3I 8587 76% 8158 4% 12% 96 -432 6346 866% 1669 M336 1756 77 19 IlI 17s9109 3444 3693 1713 00 414 9164 67% 8760 4% 12% l8356 -901 6346 as0% 1791 37S3 1836 80 20 114 6272mm 386 3D0 1638 0e 444 9818 7.1% 9374 4% 12% 11093 1175 2343 S60% 1919 3970 1920 84 20 116 6482eet 37s 4168 1589 00 476 Iasi a 1?% 18943 4% 12% 1ss 2348 4mG4s 80% 2056 4168 MD? 8e 21 Il8 190mm 4160 4459 2110 00 so9 11268 71% 10769 4% 12% 12733 2761 40343 ¢0% 2202 4489 299 92 21 120 9352I3 4431 4M4 22 00 646 12073 71% 11627 4% 12% 13542 2 b70 40342 6E0% 2369 4534 2196 96 22 123 9822m4 4719 G 2425 00 6se8 138 72% 12360 4% 12% 14703 2654 4033 660% 2543 ED? 296 loo 23 126 1032

m 5525 G? 237O 00 626 13E9 71% 12332 4% 12% lsO 24t8 4G340 S90% 2709 66 2399 I0S 23 128 1(84mm 636D2 M39 2187 00 ¢7 14146 71% 14118 4% 11% laWa 2385 E040 es0% 2as 6039 2909 109 24 130 1138mg s0e0 60 W 23a87 00 707 I WS93 71% 16192 4% 10% 17896 228 4MG46 ¢60% 305 6sD4 2S23 114 26 133 1196mm S70 37GS 3213 0oe 761 17036 7.2% t6278 4% 10% 828 2142 40348 bS0% 3274 7tes 2743 120 26 136 12562mm 646s 7644 3433 00 811 1254 72% 17443 4% 10% 23 2 2;C 4G3 2 660% 3508 7644 2E68 125 26 138 1319a210 Es6 826 37s0 00 869 t9wo0 72% 1IWI 4% t10 21734 1801 40344 890% 3759 8126 2599 131 27 141 13863Dt 7333 e7s6 3846 00 832 20568 72% 239 4% 10% 2329 1705 40340 890% 4024 8761 3136 137 28 144 14562D12 7M8s 9426 4229 00 99. 22462 72% 21414 4% 10% 24568 IS40 40358 80% 4317 9426 3279 143 29 14f 1629

AMU90202 86% 79% e%6 68% 6r.% 71% 70% 124% 73%

0O _

SCEN:82 CENThALNUM0N BR(aJICANY A5 EECrIIL DEMAND .RBCAST- VIr NAM

GIIP Gmlh Ran GDP Pdc&_____=________2__ 12 P__ mp _k_to_ t 4gc

Ar . 10%2.0 46% 6.6%Ca* 4.0% I0% 76%

mm% 66% 70% tdwo 148 0ST,14.4db. 410% 60% 66% O65dSwicn 135 0O

GOPCBIlAL 14% 65% 63% 61%

Udm Pa..a (bmd Rei POih FP eIct

32% 3.4% 34% 19901996 275 061997 7M 241 06M.3I-il 21 06s

PopdinG hO t99OFP pm,, %ad

RI 17% 17% I% 75 792%Tcag 20% 20% 20% 96

¢3ENERAllPN REOUREMat4TSLOSS FACTORS _DAD _ ElJfR .iQZ N RfGI TOTAL ELECRIITY

ANWI.L SALES N07tTEC TECH REQJIRED TRANSFER GENERATION LOXD RESDENIAL SALES AND CONNECT1CXS COI N911 PERELEM CEMAI cm FOR REGION TO OrliER IN FACTOR pFf t.A4 Im h n E CAPffA

FISCAL 0148 t4EEiNEO tOECH 1eGWm GIROWITH REGI4N REG9 N4 REGION RES Conne C pt 8M4V PoP F119W

MEWA - L R Ff SEES nAND m AL % % GXH G_M ¢ rM _G s W GWH MC_ _ fRS_

199D 1964 1 4 t120 161 32 614r 4708 6% % 9436 8 *78 3e78 701% 910 1734 1156 Is 96 525ism 2296 1 7 to 11659 2 39D3 1419 74% S07 ss% 12S% G67 .64 421.7 700% 9s8 le.? 1221 665 I 97 553

1992 2193 2063 1s1 152 330 6sot 87% 5910 6% 12% 6809 -109 4719 6946% 188 363 1296 76 16 99 99203 2O9 MSG6 1256 143 361 6525 67% 8521 6% 12% 721 1 .39 3311 890% 1193 D56 137 6 0 a S 111 633

K94 2746 2457 1368 130 393 7094 87% B7u 6% 12% 7869 -45 2239 9 6% 1311 2481 141 8a5 I7 103 6V 1946 376 awl Its$ 1114 339 7824 76% 7170a 4% 121A 8486 8624 224 56 90% 1424 3797 166 1 90 2 7 106 716t95 3zo3 2960 1947 94 370 62sE 87% 782.4 4% 12% 9260 .397 5290 24 6% 1E 6 266.0 1647 96 1a 107 76 81S7 3&g 3197 1726 6a 406 51e 88% a 1446 4% 12% 10113 478 5333 670% 1723 3197 1733 8s6 1I 109 620low 3s9a 346 1878 37 442 9812 8% 9333 4% 12% 11048 1179 2a353 6 5% 1896 3466 1624 9I 19 III 878iss 43S4 Y57 2942 00 4e3 1s76 88% 62s14 4% 12% I1C63 27 40333 660% 2087 3767 1920 96 20 114 940 20C 4840 373 Z222 00 627 11692 92% 11134 4% 12% 13177 2715 40327 660% 22m9 4573 2020 So 20 116 l007MI" 031 4416 2417 00 826 1D39 92% 12163 4% 12% 14394 2E93 4D324 960% 2490 4415 2126 106 21 118 107a2 S972 4786 239 00 629 131st 92% 13237 4% 12% 18724 2462 40344 e60% 2720 4786 2238 III 21 l20 11662003 6846 6e8 379 0o0 67 1S03 92% 14616 4% 12% 1717 2as 4m68 660% 2971 Sl8 2366 117 22 123 12372104 7126 9424 3110 00 755 16614 93% 1s09 4% 12% 1379 213e 40269 e60% 32656 324 2479 123 23 125 1325211 7848e 096 3383 00 820 18147 92% 17327 4% 12% X016 1943 40336 960% 3547 6596 2078 Ij0 23 128 1419MOB 446 sDe 36o 0o0 89.1 1394 92% 10933 4% 11% 22274 1IB 40334 as0% 3563 6948 2746 137 24 130 1520DD 952 7163 4D03 00 962 21690 92% 26a 4% 10% 24061 i6sm 40336 960% 4161 7163 2de9 144 26 133 1628209 1o099 7716 4364 00 1052 23.9 93% 2208 4% l0% 2M363 14D4 40320 860% 4647 7765 3D41 161 26 136 1744m lima3 8417 4736 00 1149 203 6 93% 24707 4% 19% 36!29 ns 415329 640% 4969 8417 3200 169 26 138 lma319 12126 9124 515.2 00 1266 va8s 9.3% 2701D2 4% 10% 3138 034 40338 960% S377 9124 3368 168 27 141 2D22Dl 14018 9390 6sD4 oo 1373 35ms 93% 2371.2 4% 10% 34316 652 40336 60% 697.7 9590 3644 I77 28 144 2U42012 1$440 10721 6096 00 is0o 3375s 93% 3a27 4% NM 37509 232 40329 60$% E947 1072l 3710 186 29 147 2299

AAD3612 100% 6.6% e6% 79% 90 91% 90os 124% 107%

C _1969;.

- 40 -

An= 1.19Page 1 of 2

BASE TEAR PRICKS OF KEY IRGY PRODWIK IN VIET NAM

1991 DOLLARSINTERNATIONAL CIF PRICES OR SUPPLY PRICES 1991

tli coV CutsJPdce lRt nilu

Ciude Oil USSJB 25 1512 1653Diesel US$SB 31 1463 2119Heavy Fuel Oil USS1 23 1532 1501Nat Gas (cost) US$kncf 1.18 252 468LN4G US$Mid 3.45 252 1369lt Coal US$ron 36 6000 o00Dom Coal (nouh) USSAon 17 5500 309Dam Coal (soulh) US$Aon 30 5500 545

PARAMETERS AND CONVERSION FACTORS(Parameters with * are Mdriving parameters)

cnxde 1512 ni cabGDiesel 1463 nil cal/BHeavy Fuel Oil 1532 nii caUBMCF gas 252 rifd caYMCFMCFeqtiv 0.167 Bcmude illt Coal 6000 nil calftonVietam Coal 5500 wil caLAon

INTERNATIONAL FOB PRICES OR SUPPLY PRICES 191

FOB Price hium Ratos * v Coe

Cnude OHI * 20.00 USSIB 5 IBDifsel 26.00 USW$ DiesUcrude 1.300 5 AHeavy Fuel Oil 18.00 US$1 HFO/Crude 0.( 5 /Nat GasCost ' 1.18 Us$hnc %g'owihyr (0100 kWdLNG (devered) 3.45 US$Mincf LNGIHFO 0.15 AndInt Steam Coal 26.00 USSfon CooUHFO 2.0000 10 RonCoal Costs north * 15.00 US$Aon % gowtW 0.0200 2 AonCoal Costs sou *J 15.00 US$ASon % gWovAtVr 0.0200 15 Aon

OTHER ASSUMPTIONS (PARAMETERS)

Effective Exchange Rate 10000 WSSEscalation in Ofl Price 3.00% fr to 2000 then fbt

Recalated March 8 1992

- 41 -Annex 1.19Page 2 of 2

FORECAST OPPORTUNITY VALUE PRCES FOR VEtNAM ENEY PROOUCT$

in US Cents per Mlon Kilo Calones (1991 DoIa)

Crude Diesel Fuel NatLral LNG n Domesic CoalEnd Oil Oil Gas Coal north so,uiYew CLf CSL Cit Jn-oh SiL it Clt SiL

1991 1653 2119 1501 468 1369 600 309 5451992 1693 2172 1537 473 1401 818 315 6511993 1734 2227 1573 478 1434 637 320 5561994 1776 2284 1610 482 1468 656 326 5621995 1819 2342 1649 487 1504 675 332 5681996 1864 2402 1688 492 1540 698 337 5741997 1910 2464 1729 497 1577 718 343 5801998 1958 2527 1771 502 1615 738 350 5881999 2006 2593 1815 507 1655 760 358 5922000 2057 2661 1859 512 1696 783 362 5992001 2108 2730 1905 517 1738 806 369 8052002 2116 2741 1913 522 1744 810 375 6122003 2116 2741 1913 528 1744 810 382 6192004 2116 2741 1913 533 1744 810 389 6262005 2116 2741 1913 538 1744 810 396 8332006 2116 2741 1913 544 1744 810 403 6402007 2116 2741 1913 549 1744 810 411 6472008 2116 2741 1913 555 1744 810 418 8552009 2116 2741 1913 560 1744 810 426 6622010 2118 2741 1913 566 1744 810 434 6702011 2116 2741 1913 571 1744 810 442 6782012 2116 2741 1913 577 1744 810 450 ON

FORECAST OPPORTuNnY VALUE PRICS FoR vETNM ENgy pROOUCTS

Crude Oil Diesel Fuel Netwal LNG bt Donestic Coaloil Gas Cost Cotil notr soo

Fob Cit Ci Cift s8e Cit Cif Cit CifEnd ( 1991 DOoIs -Wutw eAigon)Ysfr LOW US U5AMIJI SUf UStn USnc USSon utn uSSX

1991 2000 25.00 3100 23.00 1.18 345 38.00 17.00 30.001e92 2060 2560 31.78 23.54 119 3.53 3?.08 17.30 3031993 21.22 2622 32.58 24.10 120 301 38.19 117.1 30611904 2 85 1'6.85 33.41 24.87 1.22 370 39.34 17.92 30921995 22.61 27.51 34 28 25.28 1.23 3.79 40.52 18.24 31 241e6" 23.19 2819 35.14 25.87 1.24 388 41.73 18.56 31581997 2388 2888 3805 2B49 125 397 42.99 1889 31.89198 2460 2960 3898 2?14 12? 4.07 4428 19.23 32231999 2534 3034 3794 2?80 1.28 417 45.60 1957 32.572000 2810 3110 38 92 28.49 1.29 427 48.97 1993 32932001 2888 3188 3994 29.19 130 438 4838 2028 33282002 27.00 3200 4010 2930 132 440 4880 2085 33652003 2700 32 00 4010 2930 1 33 440 4860 21.02 34 022004 2700 3200 4010 29.30 134 440 4860 21.40 34402005 2700 3200 4010 2930 138 440 4860 21.79 34792008 2700 3200 40.10 2930 137 440 48.0 2219 35192007 2700 3200 4010 29.30 138 440 4860 2259 35592008 2700 3200 4010 2930 140 440 4860 2300 38002009 27.00 3200 4010 29.30 141 440 4860 2342 38422010 2700 3200 4010 2930 143 440 4860 2385 38852011 2700 3200 4010 2930 144 440 4860 2429 37292012 2700 3200 4010 2930 145 440 4860 2473 3773

Nat: doeic n 0Sigas valued on an eslmed cast ot oSPt bsis

- 42 -Annex 1.20Page 1 of I

MAN POWER RESOURCES IN THE ENERGY SECTOR (1989)

MINISTRY OF ENREGY Electricity Sector

Economic Planning 18 PCI 23,000Science and technology 15 PC2 9,500Finance 14 PC3 5,000Organisation 18 Investigation & Design Co 1 1,200External Relations 4 Investigation & Design Co 1 600Basic Construction 16 ELECTRICITY CONSTRUCTIONPower Inspection 5 Construction Co 1 (N) 1,700Protection 5 Construction co 2 (S) 1,600Administration office 45 Conatruction Co 3 (C) 2,154

Institute of Mines 150 Energy Investi. Prep Board 25Institute of Energy 250

Ele. Devices Manufacture 2,500

Total Core Ministry 3,040 Total Electricity Sector 46,579

COAL SECTOR MINISTRY OF HEAVY INDUSTRY

Coal Co Cam Pha 27,000 Oil SectorCoal Co Hon Coai 16,000 PETROVIETNAMcoal co Ung Bi 15,000 Tahi Binh Oil & Gas Co 800Coal Co Than 7,000 Petyroleum ConsT. Enterprise 1,300Domestic Coal Mgt. Co 1,400 Refining and Petrochemical Proj. 200Coal Construction Co 4,000 Viet Gas Company 300Mining Mechanic Co 4,600 Geophysical & Petro Tech Service 200Coalimex 1,800 Drilling Mud Company 70Coal Design and Investi. 1,400 V. Petroleum Training Centre 20Mining Technical school 150 Petroleum Information Centre 30Energy Economic School 150 Vietnam Petroleum Institute 300

Petrovietnam I head Office 40Petrovietnam II 50Vietnam Lube Oil Enterprise 15Vietsovpetro 6,000

Total Coal sector 78,500 Total Oil Sector 9,325

Total Energy Sector 137,444

Annex 1.21

VIET NAMt ENERGY SECTOR - ORGANXSATXON CHARTS

CONTENTS Page No

CHART No.

1. Organisation: Energy Sector 1

2. Organisation: Ministry Of Energy 2

3. Organisationt Institute Of Energy 3

4. Organisation: PETROVIETNAM 4

5. Organisation: Institute Of Mines &

Company Of Investigation & Design For coal 5

6(a) Organisation: PC 1 6

6(b) Organisation: PC 2 7

6(c) Organisation: PC 3 8

7. State Committee For Cooperation and Investment 9

II I ,, I . . , . , 11 1 .I ,. , I

Chart 1Organization: Energy Sector

---- ----State CociD for Reseives Certflication |

PMCoundl of Mnisters .

., _ (SaC) <* _ _ _ + f Ministry Scdence & ofMnty d

C O' PeroVtam" 01 , -,mot adwk Lstawt

-,- - - - - - - --- U Protecumon cts. . ~~Stala Pridng - - - - - - - - - - 2 - -_

C opnisCapvltasElimfeepot etpmn

(SCP)_ _

| Slae Conurdnee Mr Stry of LMnistr of IL . r Cooperailo Trade ard _4odsn Cm annes DeveI

- To mC Tosm some a du

. (i) ' Impotn

r Petrollmex ---------

Energy Up 'lstreamr := ur perd mpducts,

I ' ~~~~~~~~~~~~~~~~~~~Petrochnemical'

~~~~~ j PCCnm 'ol Develop Gas . P PETCHI7A fro c(1 oil revnuehOvesUalnr C Energy CoalC ----- -------r-KERCIMEX-

B Companies . : P CenterGe n* ' LI VietSovPetro L_, Develop +Ionestigaton NoCeter Ho- qAmn mpr oepout

C PDCe1,2 s * (Plnning) a n , , WlI&gbgrT a . DIsibutes

_ _ _ _ _ _ _ _ _ *-

- - - --------------- - - --------- Q

Russlan Govt. _

Is I9bt% '0

CHART 2ORGANIZATION: MINISTRY OF ENERGY

ACCOorNTIN M IMNISTERDEPARTMENT

| PL^NNIN'G3 L IVICE-MINISTERDEPARTMENT

DEPARTMSENTFNANCIAL

DEPARTMENT

INTERNATIONALIRELATION

DEPARTMENT

ELECTRICAL POWERI COAL COMPANY CONST POWERPOWfER INVESTIGATION & CAM PH CO. MPAN COESIATININSTITUTrE INSTITUTE OF COMPANY DESIGN HON GAI O1(OT)IVSIAINOF MINES ENERGY NO.(NRh COMPANY VONG BINO. 2 SOT)& DESIGNNO.2 (SOUTH NO. 1 (NORTH) BiEE NO. 3 (CENTRAL) COMPANYNO. 3 (CENTRAL) NO. 2 (SOUTH) NO. 4 NORTH)

SADSW51848

a ?3

0ao .

I-

Chart 3Organization: Institute of Energy

1. DEPUTY DIRECTOR DEPUTY DIRECTOR COMM17TEE

GOMMITTIES Presideni of DdrectorotTt6Commne bor Scdlnce

and Technolog.. Sc fencoandT eDirector of Ti dneatdTcnlg

Pi P- P8 P12 Tt7Adminislraelon Depafmera o Deparlment ol De,anm,:I ot Center for EDepautment _ Scbnce an. d Fecttcly System i Stcar Te oy

Technology Development __ Selrices

P2 P7 P9 P13

Pblnring Department of Depament of Department ofDepartment M_hwematics & Energy Forecasting _ Hydpower

Compter

| P3 | BIB l P10O P14Department of Mianaging Bor Dlepartment ofDpamnto

FDeamnotr H drHzower Energy Economics Tn8ssi on |

& EqUpnents| Section of H4Vlgtvaga

Depadment ofor ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ rdeftw| P4 l [ P1 t l [ T15 1 / l ~~~~~~~~~~~~~~~~~~~~~~~~~~~Insulation lateriws

| Departmentd oor |I Depatmenlol Cenler oHi Voltage Reseac Secdonfr

and Labor P T Nuclear Power Pe ota

| | I~~~~~~~~~_ _ _ I ! anIlthb m

from Lkhtnng

| Pe5all|nal Solar Energy Secilon 51 01 T6|gaSL_ bntermalonal gg Center of Nowand l

_I Cooperallon 110-| _IRnewable Eneigyarkd -|Department Te |lchnology Transfer I

Sectonof Combustibles 0.Wind Energy SWion and ImprovIn Stoves

- 47 - Annex 1.21Page 4 of 9

Chart 4Organization: PETROVIETNAM

PETROVIETNAM Aflae50%/ JointVenture

Vietnam Petrbn oee Tham Binh, Oil and -

Petroleutnfm enfoprmahson _al a PetroumctonCenter _ _ UnlTed Enterprise

L~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Vietnam Petrdeum Refinig and Pet3 'hff,cailInstitue Proect Nbnagernent Board

Petrochero l Vietnam Gas Co.Subinsads\w5.. _ _

rPetrovietnam I T H etroleum Serfte ',o. " gm I

Petrovietnam 11 __GeophcaanPerlu

VenmLby l DriSrhg Mud _ = 3 .T..Crpny _ Company

sads\wSI844dd

- 48 - Annex 1.21Page 5 of 9

Chart 6(a)Organization: institute of Mines

| IECTOR

| Assistant Dirco orector etr |Acco ian Dept.

Technial Department IChef Engineer Information & For. Dept. PersonnelOfti ]

Economic Research _Electrici y PlanDng Ote

TunneiUlne Department |Transportation Plans_ . Financial Oftice

Opencast Mines Geology Deparnt nistron

Mechanlal Processing Investrnent Anals Processing & Coal Sup.

| Conswon Deparlmnt Reprodutlon Deparnr| Const & Ser. Oulside,

; | ~~~~~~~~~~~Investiation Dprmn

Chart 5(b)Organization: Company of Investigation and Design for Coal

fion ion i on nerpise

Entepris Eneprs EnepIs Enteri E nepk

Cunrrnt Comrponent Organization

- Now Transferred to respective Coal Company

sadsW518440

-49 l

Annex 1. 21Page 6 of 9

Chart 6(a)Organization: Power Company 1

DIRECTOR GENERAL

DEPUTY DIRECTOR GENERAL

ADMINISTRATION TELECOMMUNICATIONSOFFICE CENTER

G MPUTER CENTER

. .~~~~~~~~~~as~584

POWER PLNTS _ _ DEPARTMENT

TRANSMISSIONDEPARTMENT

rCONSTRUCTION|ENTERPRiSE

TRANSPORTATION|m DIVISION

M ERILS SUPPLY|mDIVISION

sads\W51844f

Chart 6(b)Organization: Power Company 2

DSdor G~~~~~eputyl| Dq Dirco eea Dlreclo;roGnral ||Deputy Dbecor General|Prod don l l lb~~echnia "" § New fProet cn k

Customer Depanffients chief ~~~~~~~~~~~~~~~~~~~~~~~~~Departmentsi Tsransmisb ConteWt |r Planning Accountl Personnl -TuAn -FinanceC rte l H T n -AccountingPower Plants alleace - Statistics

Workshop~ ~ ~ ~ ~ ~~~~~~Tcrda l PoCeterr

school Security Necorksy- MateMfals

LJ1

P 0Transmission Tochrdcal ~ PC-2 Constructionlon IDepaMTeM ~~~~Departmet IntemnationalEnefe8Wa=ol

Central [tnWorkshop Cne

HV C=p lr

sads*w51"4g i

I-40.

Chart 6(c)Organizawon: Power Company 3

De DirecDor General || i tor Gera | Deputy Dire Ge;Prodution & General on Fhance

ibcInical Safety | Corqnn er lbance

Dls acigPlannig mr

PersonWnl

Headiquarter

Sita Organfization

ProvinciW ~~~~~~~~Tranng Managent ael'Olflces(L1O) Lin Worl(shm :etrp.str

C Yati-Vbnh Son,Dry Ung

sadsW51844h

0.~0ID

Chart 7Organization: State Committee for Cooperation and Investment

Councilof Ministers

Socialist Republicof Vietnam

I

Executive Executive Executive Conicurrent Concufrent Concurrent Corncurrent ConcuirrentVice-hair Vic-Char Vice-Chair Vice-Chair Vice-Chair Vice-Chair Vice-Chair Vice-Chair

Director Director Director State Planning State Ministry of Ministry of State BankNational Monitoring Investment Committee Commnittee for Commerce and FimanceCenter for and Control Transacton Science and TourismProjc Center TechnologyEvaluation

sadsw51844l

0.

g

- 53- Annex 2

LIST OF ANNEZES

CHAPTER 2 - OIL AND GAS SECTOR

AINUZ NO.

2.1 Oil and Gas sub-aector2.2(a) Exploration Drilling Offshore Viet Nam2.2(b) Exploration Acreage in Viet Nan

2.2(c) Review of current Production sharing Contracts2.3(a) latial Oil in place and oil Reserves estimates2.3(b) Summavy of gas and NOL Potential2.4(a) Oil and Gas Development Projections - Su mmary of main parameters2.4(b) Oil and Condensate Produotion Forecast & Estimted Expenditure

for 19922.4(c) Gas Production Forecast - Scenario 12.5 Capital Expenditure for Oil and gas Development - Scenario 12.6(a) DICE No Cash Flow Calculation for 1992 - Scenario 12.6(b) DAI HUNG Cash Flow Calculation for 1992 - Scenario 12.7 Viet Nan Oil and Gas Company2.8 Actions required for BACH No Development

- 54 -

Annex 2.1Page 1 of 6

OIL AND GAS SUB-SECTOR

SEDIMENTARY BASINS OF VIET NAN AND HYDROCARBON POTENTIAL

2.1 The south China sea is ringed by recent hydrocarbon finds, such asnorthwest Palawan in the Philippines, tne Gulf of Beibu and Yingge-hai basin inChina, the offshore of Sabah and Sarawak, the Mekong basin in the offshore ofVietnam etc.., refer figure (1). The dominant basin types where hydrocarbons havebeen discovered are oceanic, margin, wrench, rift and continental margin. Thesebasins are believed to contain more than half of the remaining undiscoveredreserves of South east Asia.

2.2 The hydrocarbons encountered are commonly associated with Tertiarydeposits, refer figure (2), particularly of Oligocene and Miocene age, inanticlinal and fault associated structures situated along major transcurrentfaults of regional extent. Such sedimente are commonly gas prone and where oilprone, it is believed that the oil has been generated under greater thermalmaturity.

2.3 Little prospecting has been conducted on pre-Tertiary sediments becauseof the great depth of possible objectives and high heat flows. the latterprobably have been the most important deterrent vis-a-vis deep prospecting inthis area, as it appears that only gas can be encountered in these sections.

2.4 In Vietnam, most of the prospective sedimentary basins are situated inthe offshore areas or their extension inland. This is where the majority ofdiscoveries have been made and exploration efforts are being under taken. Thehydrocarbon potential and geological framework of these basins are brieflydiscussed below.

The Gulf of Tonkin-Red River Basin

2.5 The basin covers an area of about 40.000 km2 mostly situated offshore inViet Nam and China, in water depth of up to 50 m. In the Viet Nam offshore, thearea is dominated by the Red River Basin which extends inland into the HanoiBasin (Hanoi Graben). Recent work' on this area have suggested that the HanoiBasin and the Gulf of Tonkin have been regions of marine sedimentation since thePaleozoic. However, the sedimentary section consists mainly of Tertiary andQuaternary shale and sand sequences with Miocene reef limestone intercalations.The thickness of sediments is believed to attain some 10 to 14 km in the centralpart of the basin.

2.6 Exploration in the offshore of China has been undertaken mainly by Totalwho drilled 8 wildcats in the early 1980s in the Gulf of Beibu and developed oneoil discovery, Weizhou 10-3 structure. The oil discovered in the Gulf of Beibu

is characterized by high wax content and high pour point suggesting an origin innon-marine source rock.

2.7 Few exploration wells were also drilled in the offshore of China, SW andS of the Hainan Island close to the limit of the Red River Basin, refer figure(3). Two deep wells were drilled on a Miocene objective have concluded that thesource rock potential of the interval is low. However, the low-wax, low pour-point oil discovered in a third well, Hai-2, suggests possible migration of theoil from deeper parts of the basin, where source rocks cf marine origin wereburied sufficiently deeply for oil generation to take place.

Hayashi, 1?88.

- 55 -

Annex 2.1Page 2 of 6

2.8 Exploration in the Viet Nam of fshore portion of the basin has beenconducted by Total of France in the north and Shell in the south. Three wellswere drilled by Total during 1990-1991, on two leads as part of their commitmentson blocks 102, 103, 106 and 107, refer figure (4). These wells were drilled tototal depths of 3413, 3505 and 3550 m. Total is believed to have encountered anon commercial gas accumulation and some oil shows. The characteristics of thesedimentary sectionœ encountered in the above mentioned three wells have not beendivulged by the company.

2.9 Shell who is the operator on blocks 112, 114 and 116 in the southern partof the basin has drilled three wells. The first well, drilled to a total depthof 4100 m on block 114, has not encountered any significant reservoir developmentand was abandoned as dry hole. The other two wells were drilled on block 112, todepths of about 1600 m, proved equally disappointing. One of the wells was lostduring a typhoon.

Central Viet Nam (Quong Da) Basin

2.10 The central Viet Nam basin is situated totally offshore to the south ofthe Red River basin and extends over the Vietnamese and Chinese offshore. Littleexploration has been under taken on the Vietnamese side and the area is regardedas frontiers acreage.

2.11 Seismic reflection profiles show2 the basin to be a long, narrow riftbasin trending NNW parallel to the margin. Tertiary (Oligocene and younger) andQuaternary sediments of more than 5 km thick fill the basin and overlie apronounced unconformity which deepens to the SSE and overlies older faulted pre-rift and syn-rift sediments. The variation in sediments thickness indicate thatrate of sedimentation varied through out the area. There is also evidence ofchannels, and slop sediments are faulted and slumped suggesting the shelf tohave tilted progressively during depos.ition.

2.12 British Petroleum has recently completed two wells on blocks 118 and 119in the northern part of the basin where water depth is about 150 m, refer figure(4). The two wells were drilled on a huge Miocene reef carbonate trend which runsacross the two blocks. The first well, on block 118, has encountered uncommercialgas (essentially methane) in the Miocene carbonate. The well was terminated inlower Tertiary (Oligocene ?) sediments at a depth of about 4000 m. The secondwell, drilled on block 119, has encountered what is believed to be a hugeaccumulation of gas, composed of 80% carbon dioxide, in the Hiocene carbonates.The well was abandoned at a depth of 2460 m because of severe mud loss in thehighly fissured Miocene carbonates. IPL has recently completed one well on block115, situated immediately north of B.P. block 117, and tapped also a gas columnwith high carbon dioxide level in a Miocene carbonate objective.

2.13 Studies carried out by B.P. have indicated that the organic matterencountered through out the sedimentary section has not attained sufficientthermal maturity for hydrocarbon generation to take place. The high proportionsof carbon dioxide in the gas discovered is believed to be of volcanic origin.This should not exclude, however, the high potential for hydrocarbon generationin the deeper parts of the graben situated to the east of the area explored. Itshould be noted here that a large discovery of gas (3 to 4 tcf) has been made byARCO in Yingge-hai Basin in China which is considered to be an extension of theCentral Vietnam Basin.

2 Wirasantosa, Sugiarta and Watkins, 1990.

- 56 -

Annez 2.1Page 3 of 6

The Mekong Basin

2.14 The Mekong Basin which is known also as the Cuu Long Basin is situatedprincipally in the continental shelf offshore the Mekong Delta and extends inlandover the Delta area. The basin is believed to be formed as a result of subsidenceand graben extension during the Palaeogene. A sequence of Tertiary and Quaternarysediments, consisting essentially of shale and sand, up to 5 km thick haveaccumulated in the central parts of the basin. The principal source rock in thearea appear to be the deeply buried Upper Oligocene shales.

2.15 The onshore part of the baoin has a Quaternary cover, and basementoutcrops are observed in several localities. The existence of a sedimentary basinunder the Quaternary cover is not certain. However, there is a possibility thata thick Tertiary fill could be associated with a graben development along thepredicted3 fault zone between Ho Chi Minh City and Pnomh Penh area. Petrovietnamis believed to have drilled two dry wells in the onshore extension of the basin.

2.16 The offshore part of the Mekong Basin is certainly the most exploredacreage in Viet Nam and accounts, with the South Con Son Basin, for all thecommercial discoveries in the country. Accumulations are generally encounteredin Miocene and Oligocene deltaic and shallow marine sands associated with up-lifted basement blocks and roll over structures. Substantial amounts ofhydrocarbons have also been discovered in up-lifted fractured and weatheredbasement blocks.

2.17 Exploration activities in the offshore part of the basin have been onand off since the early 1970. because of the war. Between 1974 and 1980 a totalof 5 wells were drilled by international oil companies. The first well wasdrilled in 1975 by Mobil on the Bach Ho structure near the center of the basin(block 9) and discovered light oil in the Miocene sands. The four other wellswere drilled in 1979 by Deminex on block 15, refer figure (5), and all haveencountered oil and gas shows.

2.18 Exploration in the Mekong Basin were subsequently undertaken by theVietnamese-Soviet joint venture Vietsovpetro following a technical assistanceagreement signed in 198.. An unknown number of exploration wells have beendrilled and have resulted in few successful strikes most important of which werethe discovery of oil in the Oligocene sands and the weathered basement in BachHo and the discovery in 1986 of oil and gas in the Rong (Dragon) structure. TheRong structure is situated on the limit between blocks 9 and 16 at about 30 kmSW of Bach Ho. The oil discovered in this area is generally high-wax high pour-point light oil suggesting a non-marine source rock origin.

2.19 Since 1988 international oil companies (Enterprise Oil, Petrocanada andrecently Petronas) are back exploring other blocks, refer figure (5), in thebasin under PSC agreements. Enterprise and Petrocanada are also exploring, underthe same PSCs, other blocks in the South Con Son Basin. Enterprise has alreadydrilled 3 wells on block 17 during 1989-91. One of the wells has tested oil at300 b/d from one of the Oligocene sands. The oil tested is a 330 API, high-waxand high pour-point oil similar in properties to that encountered in Bach Ho. Allthe wells drilled by Eiiterprise on block 17 have been drilled to a total depthgreater than 3000 m. Petrocanda is planning to drill 1 to 2 wells in the basinon block 3 which is situated east of the Vietsovpetro block 9.

2.20 Vietsovpetro has recently surrendered the acreage previously covered byblock 15 in addition to the acreage surrendered in the South Con Son basin.

3 Fontain and Workman, 1978.

- 57 -

Annex 2.1Page 4 of 6

The South Con Son Basin

2.21 The south Con son Basin covers an area of approximately 100.000 km2 andlies entirely in Vietnamese waters. It is separated from the Mekong Basin, to thenorth, by the Con Son swell, refer figure (6). Tertiary and Quaternary sedimentsof up to 6000 m thick are believed to have accumulated in the central part of thebasin. The South Cons Basin accounts with the Mekong Basin for the totality ofhydrocarbon reserves discovered to date in the offshore of Vietnam. Hydrocarbonsare generally encountered in Miocene and Oligocene sands predominantly depositedin deltaic and shallow marine environments. There is also high probability thatup-lifted fractured/weathered basement blocks be oil and gas bearing. The mainsource rocks in the basin are believed to be the Neogene and Palaeogene marineshales.

2.22 Based on seismic, the trapping mechanism in the basin is essentiallystructural resulting from folding, diapirs and fault related structures.Combination, structural-stratigraphic, traps are expected to be relatively commonas a result of the lenticular nature of the Neogene deltaic sand deposits andsands draped over up-lifted basement blocks. Accumulations may also be expectedin fractured/weathered basement blocks and Miocene reef carbonates. Thecarbonate platform encountered in the Indonesian offshore is expec ed to encroachonto the SE part of the South Con Son Basin.

2.23 Exploration activities in the South Con Son Basin have commenced in1974. Pecten/Cities and Mobil drilled a total of 5 wells during 1974/75 on blocks5 and 12, refer table (1) and figure (5). The first well Dua-1, drilled by Pectenon the Coco Nut structure in block 12, discovered oil and gas in a series ofOligocene sands situated at depths between 2140 and 3220 m. Mobil drilled thefirst well on the Dai Hong (Big Bear) structure, in block 5, but drilling had tobe suspended, because of the prevailing political situation in February 1975,before reaching the objective. In 1988, Vietsovpetro drilled on the same locationof Dai Hong-l and discovered commercial oil accumulation in the Miocene andOligocene sands.

2.24 During 1979/80, Agip and Bow Valley drilled a total of 8 wells on blocks4, 12, 28 and 29, refer table (1). Two of the wells drilled by Agip on block 12have discovered uncommercial gas in the Oligocene. The two wells drilled by BowValley near the southern limit of the basin, blocks 28 and 29, were abandoned asdry holes in the basement at depths of about 1500 m.

2.25 The number of exploration wells drilled by Vietsovpetro in the South ConSon Basin is unknown. Since 1988, international oil companies have beenexploring, under PSC agreements, the blocks situated in the southern and westernparts of the South Con Son Basin, to the SW of Vietsovpetro acreage. Two wellswere drilled by Enterprise and Petrocanada on blocks 21 and 20 respectively andboth were abandoned as dry holes.

2.26 The Oil and Natural Commission of India (ONGC) who is the operator onblocks 6, 12(B) and 19, have completed two wells on block 6, with little success.ONGC's well 6-A-1X was drilled to a total depth of 4215 m and has encountered gasshows in a Lower Miocene sandstone and the second well, 6-D-1X, was suspended at1138 m due to uncontrolled gas flow from a Plio-Pleiutocene limestone. More wellsare expected to be drilled by ONGC and Petrocanada during 1992.

2.27 Except for the area of the Dai Hong structure, Vietsovpetro has recentlysurrendered most of the acreage covered by blocks 4, 5, 10 and 11. The acreagealong with that surrendered in the Mekong Basin has been divided into smallerblocks and is being negotiated with the international companies conoidered tohave been most successful on previously awarded blocks.

- 58 -

Annex 2.1Page 5 of 6

The Malay Basin

2.28 The Malay Basin is situated offshore in the Gulf of Thailand inMalaysian, Thai and Vietnamese waters and covers an area of approximately 1.3million kma. The Tertiary and Quaternary eediments thickness is evaluated to beup to 9 km towards the central part of the basin. There has been a number of gasdiscoveries in the Malayeian and Thai parts of the basin, refer figure (6). Therehas been no exploration undertaken on the Vietnamese side and this part of thebaoin is considered to be a frontiers acreage.

2.29 Petrofina of Belgium has signed, in november 1990, a seismic optionagreement 8 blocks, refer figure (4). Under the terms of the agreement whichcould evolve into A PSC, Petrofina is committed to acquire 11000 of line kmseismic by February 1992 on three of the 8 blocks. After evaluation of theseismic, Petrofina has the option to either relinquish or commence a 3 wellsdrilling program.

PETROLEUM EXPLORATION AGREEMENTS: CONTRACTUAL FRAMEWORK

2.30 Viet Nam Oil and Gas Corporation (Petrovietnam) is considered to be thenational oil company and is controlled directly by the Ministry of HeavyIndustries. The Corporation operates under the national budget, it is responsiblefor all the petroleum activities in the country and holds the rights over thenon-allocated areas. All negotiations regarding exploration acreage are conductedby the Oil and Gas Corporation.

2.31 During 1973-74, pre-unification, seven concession were awarded tointernational oil companies: Mobil/Kaiyo (blocks 5,9&16), Shell/Cities (blocks4&15), Union Texas (block 10) and Esso (block 11). All the seven concession wereterminated and declared invalid following unification in 1975. Some of the aboveblocks were then awarded to Deminex (block 15), Elf Aquitaine (block 11&5) andto Agip (block 4). These concession were in turn allowed to lapse in 1982following expiry of the initial terms of the agreements.

2.32 In 1980, Viet Nam signed a technical assistance agreement with theSoviet Union to develop the prospect of Bach Ho (discovered earlier by Mobil).A 50/50 Vietnamese-Soviet joint venture, Viet.ovpetro, was created in 1981 tooperate the agreement. Following the lapse of exploration concession with westernoil companies in 1982, the responsibility of petroleum operations, over the sevenblocks mentioned above was vested in Vietsovpetro.

2.33 Since 1991, Vietsovpetro is operating blocks 5, 9 and 16 only and allthe other blocks have been surrendered. Vietsovpetro shall also be obliged torelinquish all the acreage on 01/01/1994, except the areas where oil discoverieshave been declared commercial, areas where oil is under development or beingexploited. The joint venture will operate the areas retained for a duration of20 years starting from 01/01/1991.

2.34 According to the agreement negotiated in 1991 between Vietnam and theSoviet Union, the shared capital and operating costs will be depreciated againstpart of the oil production (cost oil) and the remainder of oil production willbe the property of Petrovietnam. Except for the gas used for internal consumptionon Vietsovpetro operations, the associated gas produced will be transferred toVietgas.

2.35 Since May 1988, 10 foreign oil companies have concluded 11 producticnsharing contracts for exploration in the offshore of Vietnam, totaling some $550million in exploration commitments. The last agreement wao finalized withPetronas in September 1991. More agreement, relative to areas relinquished by VSPin 1991, are being negotiated. The agreements signed with foreign operators have

- 59

Annex 2.1Page 6 of 6

so far focused on two of the five identified basins in the offshore Viet Nam; theMekong and the South Con Son basins, the only offshore basins where exploratorydrilling and commercial discoveries have been made prior to 1988. The otherbasins are still virginal and the scant data available from the littleexploration that has taken place suggests some to be very prospective.

2.36 The initial duration of these agreements is 25 years and the initialexploration period is five years, subdivided into 3 and 2 years periods. At theend of each sub-period, companies are obliged to relinquish a percentage of theirinitial contract area. The contractors have naturally the option to terminate theagreement at the end of each sub-period if the minimum work obligation has beenmet. Failure to develop a discovery within five yeaxs following the Declarationof Intent to Develop (DID) gives the Oil and Gas Corporation the option torelinquish the development area. Other technical characteristics of the variousPSCs signed are given in table (2).

2.37 The area of the blocks awarded is variable depending on the basin. Ithas generally ranged from 10000 to 15000 ka 2 in the Gulf of Tonkin-Red Riverbasin and in the Central Vietnam Basin and around 8000 km2 in the more attractivebasins like the Mekong and South Con Son Basins. The acreage which was recentlysurrendered by Vietsovpetro has been divided into blocks having an average areaof less than 5000 km2.

- 60 - Annex 2.2 (a)

Page 1 of I

EX"LoRAION DRIIO OmIORB VWgr NAMimiuo

Operator Well Basin/block Date Depth

m

PECTEN Dua- 1X S C Son Nov 74 4050

12

Dua-2X "(12) Apr75 3650Hung-IX '(12) Sep 74 1640Mia-IX * (04) Feb 75 3350

MOBIL Bach-I Mekong Mar 75 3000

(9)Hung - I S C Son Feb 75 1750

BOWVALLEY 28-A-IX * Mar79 154029-A-IX * 1515

DEMINEX 15-A-1X Mekong Jun 79 309515-8-IX Sep 79 36401S-C-1X * !ul. 329015-G-1X * Oct79 2970

AGIP 04-A-1X S C Son Sep 79 246204-B-IX Feb 80 2442

04-B-2X May80 259312-A-1X Aug 79 246212-B-IX * Jan80 394812-C-1X * Apr 80 3857

- 61 - Annex 2.2(b)Page 1 of 1

NXWMATION ACMRBDEDI VWr NAMIqmh1991

Cp.rator Intrests Basin Block Area Awarded Previous Relinquishment% km2 Seismic Drilling First Final

km

B.H.P. BHP 100 Hue 120,121 15000 Dec 1990 regional None Dec 93 Dec 95122

EIP. B.P. 100 Hue 117,118 15000 Feb 1989 Regional None Feb 92 Feb 94119

EtPRISE Ent. 70 Mkg & 17, 21 Apr 1989 4000 None Apr 92 Apr 94CEn 30 S C Son

IPL IPL 50.6 R River 22 4810 Feb 1990 Regional None Feb 93 Feb 95C Pet 25 S C Son 115 6720SECAB 24.

ONGC ONGC100 SCSon 6,12A.19 14160 May1988 5000? 4(B12B) May92 May94

PETROCAN Pean 50 Mkg & 3,12A.20 18024 May 1990 5000 ? 2(B12A) May 93 May 95Husky 25 S C SonKufpec 25

PETROFINA Pflna 100 Malay 44,e5,46 (2) Nov 1990 None None50,51,53

54,55SCEPTRE Scept 100 R River 111 9000 May 1990 Regional None May 93 May 95

SHELL Shell 66.6 Hue 112.114 15000 Jun 1988 Regional None Jun91 Jun93Pflina 33.3 116

TOTAL Total 75 R River 102,103 12950 Nov.1988 None None Nov.91 Nov.93Lasmo 25 106,107

VIETSOVPET VSP 100 Mkg & 4,5,9,10 1979 NA 11J.Venture SC Son 11,15,16

(1) minhium commihnent on block 22 Is to shoot 2500 km of seismic during the first 18 months.Assoiaion may then choose to reminabt eontrat or c1ill one well within the followkhg 18 months.

(2) Blocks are paty sitd within the disputed territory with Thailand.

(3) Patrotb. wi he to de 3 web I bl*a are rat reLetihed &t ths ond of the Semnc OptL

- 62 -

Annee 2.2(c)Page 1 of 1

REVIEW OF CURRENT PRODUCTION SEARING CONTRACTS

1. Under current PSCB, foreign contractors assume 100% of therisks associated wittr exploration and production activities, subject to thecost recovery provisions in each PSC. The 1988 Law on Foreign Investmentgives the Government considerable leeway in providing favorable income taxincentives to foreign investors. Accordingly, the Government has providedterms and conditions in the existing PS(s which are rather favorable to theforeign oil companies, relieving them from several fiscal obligationscommonly encountered elsewhere. In addition, in the majority of cases thedeclaration of commerciality has been left to the discretion of the oilcompanies. Petrovietnam believes that this is to its advantage because insome cases it may decide to develop the marginal fields.

2. Since there is no model contract, the Government negotiateseach PSC separately; the terms and conditions are different in each case.A typical PSC includes the following: the duration of the agreement, 25years; the initial exploration periods, 5 years (3 and 2 years interval);provision for royalty, varying according to the type of the blocks offered(the percentage of royalty for frontier and deeper water blocks is lower,some varying in sliding scales); provision for domestic consumption,limited only to a certain percentage of the production; and provisions forcost recovery. Viet Nam's PSCs are similar to the Malaysian and IndonesianPSCs.

- 63 - Annex 2.3(a)

Page 1 of 1INIlIAL OIL IN PLACE AND OIL RESERVES ESTIMATES

INITIAL OIL IN PLACE RESERVESCorsidered for Projectiorns

FIELD Formation Block Proven Probable Possible Base Case Maximum Minimum

BACH HO Mlocene North 27.7 35.0 3.5 6.3 1.9U Oligocene 43.8 58.R 5.3 6.5 2.5LOligocene 82.5 166.5 18.3 31.6 12.1Basement North/Centre 217.0 * 32.6 73.5 15.6

Sub-Total MM tons 154.0 477.3 477.3 59.7 117.9 32.0MM stb 1147.3 3555.9 3555.9 * 444.8 878.4 238.6

RONG Miocene Centre 22.6 81.9 276.9 5.0 10.0* South 1.1

North 1.8

Sub-Total MM tons 22.6 84.8 276.9 5.0 10.0MM stb 168.4 631.8 2062.9 37.3 74.5

Minimum Probable MaximumDAI HUNG Miocene DH-1 71.1 150.0 236.9 49.5 78.2 23.5

DH-2 34.7 60.7 86.7 20.0 28.6 11.5Sub-Total MM tons 105.8 210.7 323.6 69.5 106.8 34.9

MM stb 788.2 1569.7 2410.8 518.0 795.6 260.1

TOTAL MM tons 282.4 772.8 1077.8 134.2 234.7 66.9MM stb 2103.9 5757.4 8029.6 1000.0 1748.4 498.7

Source: Petrovietnam and World bank mission. March 1992* Proven +probable** Probable+Possible

- 64 -

Annex 2.3(b)SUMMARY OF GAS AND NGL POTENTIAL Page 1 of 1

Offshore Identified ReservesGas: MM scm LPG: o00 Tons Condensate: MM stb

GAS PRODUCTION SALES GAS LPG CONDENSATECase Base Max Min Base Max Min Base Max Min Base Max Min

1992 833 833 1086 148.09 148.09 190.47 0.6528 0.6528 0.85111993 930 930 1249 163.11 163.11 219.06 0.7288 0.7288 0.97881994 1225 1470 1119 214.85 257.82 198.26 0.9600 1.1520 0.87891995 1982 1868 1203 1303 1457 781 329.89 327.82 201.15 1.3654 1.4640 0.82381996 2759 2591 1384 1844 2021 890 445.48 434.71 219.07 1.6968 1.7917 0.79791997 2683 3376 1484 2077 2633 1158 421.00 539.48 227.36 1.5289 2.0080 0.76421998 2675 3837 1466 2087 2993 1144 413.22 603.24 220.94 1.4185 2.1623 0.71051999 2573 4121 1428 2007 3214 1114 392.55 639.23 212.47 1.3050 2.2173 0.65892000 2500 3922 1393 1950 3059 1087 376.83 600.14 204.44 1.2123 2.0106 0.60852001 2443 3750 1381 1908 2925 1077 383.72 565.59 200.34 1.1299 1.8227 0.57492002 4043 6318 2479 1828 2822 900 645.56 1018.4 241.09 1.6542 2.6821 0.45282003 3980 6220 2404 1800 2800 900 631.10 996.40 231.59 1.5835 2.5469 0.43832004 3794 5969 2334 1800 2800 900 601.99 956.08 222.72 1.4602 2.3951 0.42472005 3559 5654 2274 1800 2800 900 587.54 908.72 215.12 1.3560 2.2438 0.41312006 3339 5376 2219 1800 2800 900 535.62 868.92 208.15 1.2664 2.1102 0.40242007 3151 5125 2170 1800 2800 900 508.10 829.38 201.94 1.1852 1.9920 0.39292008 2983 4896 2123 1800 2800 900 483.70 795.25 195.99 1.1149 1.8857 0.38382009 2840 4692 2084 1800 2800 900 463.15 764.92 191.05 1.0577 1.7919 0.37832010 2891 4510 2045 1800 2800 900 441.45 738.02 186.11 0.9946 1.7100 0.3587

50943 75458 33325 29400. 43525 15350 8145.0 12151. 3985.4 23.654 35.388 11.299

GAS COMPOSITION (mol %)

Dai Hung Free Gas Dai Hung Associated Gas Bach HoWell/Horizon 1/Mui 2/Miil 1/Ov 1/Mili 21MIv 1/Ovil 2/OlvReservoir Temp.°C 98 89 124 102 103 128 105 142Pressure (Bars) 215 209 334 222 244 350 274 390

C1 0.895 0.794 0.626 0.790 0.795 0.780 0.842 0.768C2 0.060 0.068 0.129 0.095 0.088 0.096 0.061 0.119C3 0.028 0.026 0.103 0.047 0.030 0.050 0.020 0.060C4 0.013 0.016 0.071 0.025 0.015 0.043 0.013 0.027C5 0.004 0.006 0.021 0.006 0.004 0.003 0.004 0.006C6+ 0.001 0.001 0.003 0.002 0.000 0.002 0.001 0.015

TOTAL 1.000 0.910 0.954 0.965 0.933 0.974 0.941 0.995

Bach Ho Dai HungAssociated Free

LPG gr/scm 175.4 128.7 178.0Condensate cc/scm 124.5 30.8 60.0

- 65 -Annex 2.4(a)Page 1 of 1

OIL AND GAS DEVELOPMENT PROJECTIONSSUMMARY OP MAIN PARAMETERS

COMPONENT SCENARIO I SCENARIO 2i3ACHi HO

Oil Rasolves (MM stb) 445 878Delineation Required 5 Wells 5 WellsReservoir Development Water injection Water injectionAdditonal Well-head Platforrns 3 4Additional Drilling 80 Wells 100 WellsAdditional Pro Plaforms 1 1Oil EvacuatlonlStorage Offshore Offshore

Gas DeveloprnentTrunk lines 24-120 kml (1) 24m 120 kmLPG Unit/Storage&Terminal On-shore On-shore

DAi HIUNG1Ol Reserves (MM stb) 518 795

Delineation Required 3 to 5 Wells 3 to 5 WellsReseivoir Developrnent Water injection Water injectonWell-head Platforms 3 4Total no fWells 80 110Process Phorms/Compression 1 100 Evacuaton/Storage Offshore OffshoreCondesate Handling Offshore Offshore

Gas DevelopmentTrunk lines 22' lokm (2) 22r 180 kmCompression On Process Platform On Process Platform

RONGReserves (MM stb) Soto 100 Soto 100Delineation 2 Wells 2 WellsDeveloprnent Parbal (3) Partial

(1) To Sarin(2) From Dalilung to Bdch Ho(3) SubJct to Delneadton

- 66 -

Annex 2.4(b)OIL AND CONDENSATE PRODUCTION FORECAST Page 1 of 1

AND ESTIMATED EXPENDiTURE MM USS 1992somasb 1

Year Oil Production MM stb Condensate MM stb Capex MM Us $ OpexBH DH RG TOTAL BH DH OH TOTAL BH DH RG TOTAL MM $

1992 33.0 33.0 113 12 125 831993 35.0 35.0 242 178 10 430 981994 35.0 35.0 275 405 30 710 1141995 35.0 35.0 1.31 1.31 185 470 50 705 981996 31.0 10.& 2.0 43.8 1.54 0.15 1.70 115 380 50 545 2061997 27.0 29.4 4.0 60.4 1.35 0.18 1.63 34 69 10 113 1951998 24.0 35.0 5.0 64.0 1.20 0.23 1.43 15 10 5 30 1951999 21.5 42.5 5.0 69.0 1.07 0.23 1.31 10 5 15 1952000 19.4 42.5 5.0 66.9 0.97 0.25 1.21 1952001 17.5 42.5 5.0 65.0 0.87 0.26 1.13 1952002 14.9 42.5 4.5 61.9 0.74 0.27 1.01 1952003 12.8 42.5 4.0 59.3 0.64 0.28 0.01 0.93 1952004 11.0 42.5 3.6 57.1 0.55 0.27 0.06 0.88 1952005 9.5 38.5 4.3 52.3 0.47 0.24 0.16 0.87 185

2006 8.2 33.0 2.9 44.1 0.41 0.22 0.26 0.89 1712007 7.0 28.0 2.6 37.6 0.35 0.20 0.38 0.92 1 F.92009 6.0 24.0 2.4 32.4 0.30 0.18 0.51 0.99 1492009 5.2 20.5 2.2 27.9 0.26 0.16 0.66 1.07 1402010 4.3 17.5 2.0 23.8 0.21 0.14 0.85 1.21 133

357 492 55 904 12.24 3.26 2.89 18.38 989 1529 2673 3096

OIL PRODUCTION CONDEV .ATE PRODUCTION (ASSOCIATED GAS)

so 1 .

70 .

so "naCi =_2 -0 0

1992199 19 199 200 200 20 200 200 2010 1 19 199 1998200 200200 200 200 2010109319951 9719992001 2003200IE20072009 199310051997199920012003200520072009

*BachHo 13Dai Hung IRong 0xachHo ODalHung

LPG PRODUCTION FROM ASSOCIATED GAS CAPITAL EXPENDITURE

600 goo

4 021 10100 02020000 01 10 1 0 200 0002021

800.300- ow.~~~~~~~~~~~~~0

0~~~~~~~~~~~~~~~~~30

0 Ioil

1 @9921 9 1090 1 00 200 200 200 20020 10 1W 1007 19 200P2001 2003 2005200 Z201019931995199719992001 20032 0520072009 19931995199719992001 2003200520072009

1K8ach Ho 0 Dal Hung EOBach Ho Capex 0Dal Hung Capex 0Rong Capax CTotiOWpex

- 67 -

Annex 2.4(c)Page 1 of 1

GAS PRODUCTION FORECATSocio I (MM Wm)

WELLHEAD RAW GAS DRY GAS SUPPLY POTENTlAL NGL CAPEX 9 OPEX*Year Assoclatd Free Totad Aasoclated Free Total LPG Cond. MM US $

Plateau 1.8 bcm M tons M stbBHo D Hung D Hung BHo D Hung D Hung

1992 833 833 201993 930 -- 930 1051994 1225 1225 1251995 1670 292 1962 1303 1303 80 13.21996 1970 789 2759 1537 308 1844 445 100 13.21997 1717 946 2683 1339 738 2077 421 1529 22.51998 1526 1149 2675 1190 890 2087 413 1419 22.51999 1367 1206 2573 1066 941 2007 393 1305 22.52000 1234 1266 2500 963 988 1950 377 1212 22.52001 1113 1330 2443 86s 1037 1906 364 1130 22.52002 947 1396 1700 4043 739 1089 1828 343 1013 22.52003 814 1466 1700 3980 635 1144 22 1800 332 930 22.52004 700 1394 1700 3794 546 1087 167 1800 330 884 22.52005 604 1255 1700 3559 471 979 350 1800 338 871 21.52006 521 1118 1700 3339 406 872 522 1800 356 887 22.52007 445 1006 1700 3151 347 785 668 1800 384 922 22.52008 381 902 1700 2983 297 704 799 1800 423 983 22.52009 331 809 1700 2840 258 631 911 1800 470 1073 22.52010 273 718 1700 2691 213 560 1027 1800 541 1205 22.5

18601 17042 15300 50943 12178 12758 4465 29401 5930 15366 430.0 341.4

COST OF GAS SUPPLYUS S/md

From Bach Ho Dal Hung and Bach Ho

(1) (2)TO BARIA 0.82 1.02 0.94TO PHU MY 1.10 1.18 1.09TO THU DUC 1.38 1.34 1.24

(1) ASSOCIATED GAS ONLY(2) TAKING INTO ACCOUNT THE FREE GAS REQUIRED FOR A PLATEAU OF 1.8 bom/year(*) INCREMENTAL EXPEDITURE REQUIRED FOR THE DEVELOPMENT OF GAS

AT BACH HO AND DAI HUNG AND ITS EVACUATION TO BARIA.

POTEtMAL PRODUCTION OF WELLHEAD GAS AVAiABLE SALES GAS PRODUCTIONPlateau 1.8 BCM/YEAR

11993 19058197199 =0 20820 20 091990 14995 199717999 20012003 o200o5 2007 2009so

U Bach Ho UD Hun A.ae0 ~0 Hung(Free) UBchHo ID Hung (AeecAbl~ 0D Hun(Free)

- 68 -

AnnuK 2.5Page 1 ofI

CAPrrAL EXPENDITURB: OrL AND GAU DEVELOPMBNTScurio I (Millons of USS I992)

1992 19P3 1994 1995 1996 1997 1998 1999Bach Ho Additonal development T@bI

Delineaton 35 35 70Well Platforms 35 35 35 105Drilling 50 50 125 125 100 30 15 10 50SProcess & Compression 5 40 55 100Gas Pipeline (24,120 km) - 15 50 25 90Contingency 8 32 35 25 15 4 110Tcdal 113 242 275 185 115 34 15 10

Dai Hung DevelopmertDelineaton 10 40 s0Well Platforms 15 50 50 50 1aDrilling 50 1W 100 100 60 10 5 425Process & Compression 50 150 150 50 400Oil Evacuation 50 65 65 160Gas Pipeline toBach Ho (22, 160 kin) 45 65 110Contingency 2 23 55 60 50 9 19WTotal 12 178 405 470 :80 69 10 5 1Iwo

Gas DevelopmentBach Ho to Baria* 10 60 50 120Baria to Phu My 5 20 20 45Phu My to Thu Due 5 20 20 45Dal Hung to Bach Ho* 30 80 100 210Communications 5 5 10Total 20 105 125 60 100 4S0

(*) Including Compression and Treatment

CAPEX FOR OIL AND GAS DEVELOPMENT

500

400

(40 ~ 300 z

n. ~~200-

100 - M

0 -1992 1993 1994 1995 1996 1997 1998 1999

m Gas Development ED B Ho Development 21 D Hung Development

- 69 -

Annex 2.6(a)

BACH HO CASH FLOW CALCULATION Page 1 of 1SCENARIO 1 (MM USS 1992)

PSC Fucaiy

Production Price ShareYear Capex Oil Gas Oil Gas Revenue Opex State Company Cash Flow

MM sUb MM acm $/stb $/Mscm1992 113 33.0 833 21.6 126.2 714 83 168 168 176199e 242 35.0 930 22.3 130.0 780 98 183 183 831994 276 35.0 1225- 23.0 133.9 803 114 189 189 511995 184 35.0 1670 23.6 137.9 943 125 221 221 1371996 115 31.0 1970 24.3 142.0 1034 132 243 243 1811997 34 27.0 1717 25.1 148.3 928 134 218 218 1701998 0 24.0 1526 25.8 150.7 850 134 200 200 1471999 0 21.5 1387 26.6 155.2 784 134 184 184 1172000 0 19.4 1234 27.4 159.8 729 134 171 171 942001 0 17.5 1113 27.0 157.5 648 134 152 152 702002 0 14.9 947 27.0 157.5 551 134 130 130 482003 0 12.8 814 27.0 157.5 474 134 111 111 332004 0 11.0 700 27.0 157.5 407 134 96 98 21;p005 0 9.5 604 27.0 157.5 352 134 83 83 132006 0 8.2 521 27.0 157.5 303 134 71 71 72007 0 7.0 445 27.0 157.5 259 134 61 61 32008 0 6.0 381 27.0 157.5 222 134 52 52 -12009 0 5.2 331 27.0 157.5 193 134 45 45 -32010 0 4.3 273 27.0 157.3 159 134 37 37 -4

Rate of return 16.5% Cost Stop % 35 (1) Oil S/sthNPV (@ 1 2%) MMS 380.8 State Shre % 50 Gas $/M scmNPVII $/$ 0.29 Royalty % 18

Average Incremental Cost of Oil from Additlonal Development $14.8/stb

OLPFRODUC1ION GAS PRODUCTION

350 2.1

30 n 3" o 1. -,X304ZW

20'~~~~~~~~~~~~~~~~~~

Ea#ON l8 JATION INCRbNTAI. OIL PMODUCTION

11 ~~~~~~~~~~~~~~~~~040 11m

-.0 -2A -10 0 ¶ 20 30

CHAN %t°o oi; IE~RSER CAPEC ° OPEX o PRIM *P,gisnU wAdd. EoDweIpmesu

- 70 -Annex 2.6(b)

DAI HUNGI CASH FLOW CALCULATION P*ge I of ISCENARIO 1 (M USS 1992)

PSC FPiq .

Producdon Price ShareYear Capcx Oil Gas Oil Gas Revenue Opex state Company Cash Flow

MM stb MM scm S/stb S/Msan disc @12%1992 12 18.0 105.0 0 0 -t21993 178 18.5 107.9 0 0 -1591994 403 19.0 110.8 0 0 -3211995 470 20.0 116.7 0 0 -3351996 380 10.8 292 21.0 122.5 245 101 90 39 -2271997 69 29.2 789 21.6 126.2 731 106 2609 115 1111998 0 85.0 946 22.3 130.0 903 106 332 142 1781999 0 42.5 1149 23.0 133.9 1129 106 415 178 2112000 0 42.5 1206 23.8 137.9 1171 106 430 184 1972001 0 42.5 1266 24.3 '42.0 s214 106 448 191 1842002 0 42.5 1330 25.1 146.3 1280 106 520 223 1542003 0 42.5 1396 25.8 150.7 1308 106 727 312 902004 0 42.5 1486 26.6 1552 1356 106 758 325 832005 0 38.5 1394 27.4 159.8 1278 96 716 307 702006 0 33.0 1255 27.0 157.5 1089 82 609 261 532007 0 26.0 1118 27.0 157.5 932 70 522 224 412008 0 24.0 1006 27.0 157.5 806 60 452 194 322009 0 20.5 902 27.0 157.5 s86 51 390 167 242010 0 17.5 809 27.0 157.5 600 44 337 144 192011 0 14.8 718 27.0 157.5 513 37 288 124 14

1512 506 17044 15233 1387 7301 3129 409

Rate of relum 17.8% Cost Stqp % 35NPV (@ 12%) MMS 409.3 State Shre % 70NPV/I S 0.27 Royely % 12.5

: .~~~~~~~~~~~~~~~~~~~~~~~.a; PROOUCtlON ~~~~~~~~~SdOGATUD GAS PROOUC11ON

O %~~~~~~~~~~~~~~~~~~~~~l20 j94tgstgs 2022O.006 21

CAPITAL MNO 0PIRAtNG IPNOIUSJeJA £VLWfl

*CAPIx SOPEXCHa RMlER!S + cwuE A STATE SHARE x ROYALTY

- 71 -

annex 2.7Page 1 of 1

VIVT NA OIL AND GAU COIPANY

The VOGC is headed by a chairman and two Vice chairmen. The chairmanreports directly to the minister of MOHI. One of the Vice Chairmen isresponsible for financila matters and the management of Vietsovpetro. Theother Vice chairman is responsible for the rest of Petrovietnam's activities.The VOGC has the following functional units:

- Petrovietnam I, responsible for the petroleum exploration andproduction in north of the countryl

- Petrovietnam II, responsible for the petroleum exploration andproduction in the south of the country;

- Vietsovpetro, a 50-50 joint venture partnership between theUSSR and Vietnamese, responsible for exploration and exploitationin several blocks in the offshore Mekong and Con Son basins;

- Thai binh Oil and Gas Co., responsible for production of thesmall gas field in the north of the country;

- Vietgas, mainly responsible for gas utilisation in vietNam,including the preparation of the proposed gas project in south;

- Refining and Petrochemical managing board, primarily responsiblefor looking into the refinery and petrochemical prospects;

- Vidamo, responsible for production and import of lubricants;- A construction co. responsible for installations of the offshore

platforms;- Two technical service companies (GPTS and PSC)- Drilling Mud company (DMC);- Vietnam Petroleum Institute;- Refining ang Petrochemical Sub-institute; and- Training Centre, mainly for offshore training.

In addition to the above functional units, the VOGC has serveral supportingdepartments: the Scientific and Technical; the Economic Planning; the Foreignrelation; the Commercial and Marketing; the accounts and the Finances; thePersonnel and Training: the Inspection and safety; the General office andadministration; and the Centre for Archives and Information. Petrovietnam doesnot have an engineering department, but relies on Vietsovpetro for theirengineering needs. Petrovietnam has about 10,000 staff, but only about 120-150are working in the Headquarters.

- 72 -

Annex 2.8Page 1 of 1

ACTIONS REQUIRED FOR BACH H0

With regard to the further development of Bach Ho, the followingactions need to be urgently considered:

(i) Implementation of a safety inspection by an independent certificationagency to determine the integrity and suitability of the field'ssurface facilities for safe operations in the short- and medium-term.The carrying out of an engineering optimization study to examine thefeasibility of revamping and modifying the present structures(removal of drilling rigs, living quarters and salvaging them for useas well-head platforms) and examination of the possibility ofdrilling more wells from the remaining slots;

(ii) Installation of a well-head platform on the central block to providecontingency for maintaining oil production;

(iii) An in-depth review of the data available on the field, incollaboration with VIETSOVPETRO, to assess oil and gas reserves,evaluate the adequacy of the present reservoir development and todefine the additional appraisal and development required to enhanceoil and gas production in an optimum manner;

(iv) Finalization of pressure maintenance plans, as further delay willlead to sharp reduction of well productivity, substantial loss in oilrecovery and rapid increase of associated gas production; and

(v) Additional delineation on the field with two objectives: (a) tocollect reliable data on the northern and central sectors using thelatest technology in coring, logging fluid sampling, and welltesting, and (b) to appraise the potential of the southern block (onewell has been drilled on this block to date).

73 Annex 3

LIST OF ANEXES

CHAPTER 3 - The COAL SECTOR

ANNEX NO

3.1 Coal Geology of Viet Nam3.2 Coal Mining Operations3.3 Coal Ports3.4 Coal Bri;uettes3.5 World Ar.thracite Production & Viet Nam Coal Exports3.6 Viet Nam: Coal Sector Investment Program

- 74 -

Annex 3.1WPasa 1 of 1

COAL GEOLOGY OF VIET NAN

1. The coal in Quang Ninh Province geologically belongs to the Triassicperiod. There are 61 coal seams with an aggregate thicknese of 150 m in a coalbearing strata 4,500 m thick. The coalfields are in two graven blocks thatstretch over an area 150 km long and 10 km wide almost parallel to the coastline.The strata have assumed a complex geological structure through numerous foldingand faulting. Intense te-ctonic pressure and heat have metamorphosed the coal tothe rank of anthracite or semi-anthracite.1 They have also caused seriousstructural disturbances to the strata leading to thickening and thinning of coalseams, fracturing of strata and abrupt changes in inclination. The only otherimportant coal deposit is found at Bao Dai in the north-west of the country.Some of the important geological features of these coal fields are given belows

Table 1: GEOLOGICAL FEATURES

Areas Location Cao Bai Cam Pha Hon Gai MaoKhe Sac ThaiEast East Centrat West Northwest

No. of coat seams 11 31 10 37 8

Maximum of a seam 6 91 40 30 27thickness (m)

Aggregate coat 70-150 24-47 153 35|thickness (m)I

Due to increased metamorphism towards the west, there is a decrease of volatilematter and methane gas content in those coalfields. On the other hand, Cao saL,Cam Pha and Hon Gai coal fields in the east tend to be highly gassy.

2. The quality of Quang Ninh coal varies by seam and by area. The tablebr- Jw shows the wide ranges found in working mines. These are in-situ coalsample analyses and do not reflect run-of-mine or raw coal quality.

Table 2: COAL QUALITY(Air-dried Basis)

Description Quality Range (X)

Mof sture 1.1 - 6.6

Ash 6.0 - 26.0

VotattLe matter 2.0 - 11.5

Fixed Carbon 70.0 - 92.0

Sulphur 0.2 - 1.5(usualLy below 0.5)

Phosphorous 0.^'2 0.42(usuatly below 0.01)

Calortfic Value 6,000 - 8,550

According to the US classification of coal, anthracite is thehighest rank of coal. It has three sub-groups as below:

Fixed Carbon (%) Volatile Matter (%)

Meta-anthracite > 98 < 2Anthracite 92-98 2-8Semi-anthracite 86-92 8-14

- 75 - Annex 3.2

Page I of 8

COAL MINING OPERATIONS

1. ~~The surface mines are worked in the standard way for large multi-seamdeposits: truck and rope shovel operations. Sizes of equipment range fromshovels with buckets from 2 to 8 m3 and trucks which carry from 12 to 36 t.These sizes compare with 15 to 25 m3 buckets and 120 to 240 t trucks used in manyWestern mines. Being rather small, up to 30 shovels and 140 trucks are requiredat the larger mines. Most equipment has been supplied from the Eastern Block,especially the USSR. Since 1987 many Japanese and Swedish trucks, still of only36 t, have been supplied, costing twice as much to buy - but moving twice as muchrock/year. The Eastern block equipment has a low availability, is difficult tomaintain and spares are now very difficult to obtain. At most mines there is anassortment of diffe~eent sizes of excavating and hau)ing equipr:nt which reducesefficiency of loading, haul sequences, operator familiarity &nd maintenance.Stripping ratios are between 3 and 7 m3 of overburden/raw ton, in line with manyother truck and shovel coal mines in the world. Most open pits are notbackf illed, which results in all the overburden being moved up to 5 km up and outof the large pits. The largest pit is Coc Sau, which is 2000 m long, 1300 in wideand 220 m deep.

2. Surface mining problems are centered round insufficient and poorexploration data, and poor mine planning - especially sequencing of sub-pits.At present, all the mines are extracting coal from the total area of the deposit.This results in having to move the total quantity of overburden outside thedeposit. If sub-pits were formed, a block of mineral could be recovered,followed by excavation of the adjacent block whose overburden could be placedinto the mined out sub-pit using a short almost level truck haul for the waste.Flooding during the monsoons occurs due to heavy rains which wash loose material,especiall-r coal, into the bottom of the pit. The rains sometimes cause rockslides, and the haul roads become difficult to maintain. Haul roads wereconstructed without bctrms, ditches, crushed rock or graders to level them,creating high aquipment and tire costs. Pumping capacity may be insufficient,or the pumps may bocome silted up. At the end of the rainy season, 20 m ofslurry and water may have collected in the bottom of the pit. Excessive heatwithin the deep pits is reported to be a major problem to humans and equipment;in the absence of winds, thes rocks absorb the heat from the sun, which in turnheat the air. Although the mining equipment is comparatively small, thedistorted coal seams make loading of only coal quite difficult; this results inmoderate amounts of dilution rock mixed with the raw coal, raising ash levels toover 50% in the coarse fractions. Drilling and blasting is complicated by thesteep irregular seams and by some extremely hard metamorphosed quartziticsandstone. A3though a few old cable drills are still used, most are crawlermounte... rotary units drilling 200 to 250 -m diameter holes using tricone bitswith drilling capacity ranging from 3000-18000 in/year while larger units couldattain capacities of 60,000. Explosive costs represents about 40% of allexcavating costs which are unusually high. As yet, there is only one mine whichuses ANFO explosives, which are manufactured in conjunction with an Australiancompany. Vehicle and machine life is not as long as the write-off periodi many

-76- Annex 3.2

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items scheduled to last 7 years often run for 3 years only. This is due to acombination of poor design, poor quality steel and fabrication, wrongapplication, poor maintenance, lack of spares, unsuitable custom made spares,operator misuse and tough operating conditions.

Underaround Minina

3. Due to the steep and irregular seams, the layout of the undergroundworkings is normally done using horizontal tunnels either in or close to theseams at vertical intervals of 50 to 70 m. The mines mostly use a simplelongwall system in areas of more uniform seam geology. Providing the seam isconsistent, it is possible to achieve reasonable results. As most faces retreat,the risk of problems is reduced. Because the seam variations, faulting, lowwages, etc, mechanisation has not been adopted. The longwall faces are targetedfor a 100 m length on full dip, with roads on strike, and a retreat distance of200 m minimum. Some trials v.ere made with multi slicing of thicker seams, usingwire mesh as a false roof or ,ust abandoning the septum of coal between faces,often amounting to 50% of lost coal. Coal winning on the face is normally doneby drilling short holes at 45 degrees to the face, blasting them withconventional explosives, then manually shovelling the loosened coal which doesnot fall onto the conveyor or chute. Support of the roof is achieved by steelfriction props or wooden props, the former being more economical. The waste isallowed to cave except in faulted conditions where rock packs are built forgreater strata control. Typically a lonpwall face will only produce about 150t/day using 100 to 120 men, equivalert to an advance of 0.5 m/day at aproductivity of about 1.5 t/man on the face. The seams are often 30 or 40 mapart, the rock of which is often a hard quartzite. Transport of coal and rockis mainly by 1/2 to 3 t mine cars pulled by diesel or electric locomotives, butsome belt or chain conveyors are also used, especially near the coal faces. Forsteep seams (over 60 degrees), trials have taken place using a method to drivefour raises, each on 7.5 m centers in the seam, with a small Soviet coal raiseborer for a height of 100 m, joining them with a horizontal face, and installingsimple hydraulic supports which control the roof/goaf (at this inclination).Coal is blasted and moved to a raise, where it falls to the haulage below.Because of the many raises and Jhort retreat distance and therefore low tonnagein the block, productivity has been poor. Another method uses a raise in theseam from which 37 mm holes 4 m lcng are drilled in a fan spaced 0.8 m apart.In gassy seams and with poor ventilation, this method using conventionalexplosives is considered dangerous.

4. Underground mine )ttlenecks are caused by very poor ventilation,scattered workings, insufficient geological data for effective planning, verylittle mechanisation and lack of suitable methods for mining thick, steep andirregular coal seams. Ventilation is the most important problem and easiest tocorrect; human effort reduces to one quarter as thu air temperature rises from30 degrees to 40 degrees Celsius. At one mine, only 40 m3 of air/second were usedfor the whole mine working 10 faces. Development drivage is largely in coal andis supported by steel arches. The advance ia only 1 r124 hours in rock and 2 min coal. Drill, blact and hand loading into high cars are used, followed byextension of the rail track. The slow progress sometimes causes delays instarting a replace face.

- . -- .~~~~~I - I .~~I , I .....................

Annex 3.2Page 3 of 8

5. One underground mine with a production of about 150,0CQ tpy (30% ofnational design capacity) employed over 2,000 persons. It performed 16,000 m ofunderground tunneling during the last 15 years to locate the coal seamdisposition and sustain production. This is unusually expensive for a smallmine. Geological information obtained quicker with lower cost shallow definitiondrilling will help better mine planning and systematic mine development.

PErearation

6. Coal preparation is carried out at four screening plants and fourwasheries. Screening plants only size the coal, they do not improve coalquality. Lump uoal (> 25 mm size) is hand picked and lower fraction are sizedat different screen decks. All preparation plants, except one, rail transportnetwork, and coal unloading, storage and loading facilities at the ports are veryold and of elementary design.

7. The raw coal is widely variable in its size and ash content(5-40%). No doubt coal preparation begins it the production face where workershave to exercise their judgement in not mining the dirt bands and roof and floorstones with coal, but the dilution cf coal qual'-y alao depends upon the miningmethod, size of equipment deployed and the expertise of the operator. Theaverage screen size of Cam Pha raw coal in 1990 is shown in the table below:

CAM PHA COAL SCREEN SIZE ANALYSIS

Scren SiAze Proportion Cumulative(mm) (%) (a)

+50 7 7

50 - 35 6 13

35 - 15 15 28

15 - 6 17 45

6 - 1 32 77

1 - 0.1 16 93

<0.1 7 100

It can be seen that about 20% of raw coal can be classified as lump coal andabout 55% as fine coal. At present, the < 0.1 mm size coal (7% of raw coal) isdiscarded, even though it has considerable heat value and market potential

8. Only the Cua Ong No, 2 washery plant (originally a Polish plantmodified by an Australian company) can be considered a modern unit, but theactual throughput in 1990 (the first year of operation) was only 0.68 mt or 25%of the design capacity. This plant uses heavy media jig cleaning up to 15 mmsize, heavy media cyclone for 15 to 1 mm and spirals for 1 to 0.: mm. The < 0.1mm size fraction remains unwashed and allowed to go waste. The overall cleancoal yield is 62%. In the absence of ash analysis of raw and clean coal size

- 78 - Annex 3.2

Page 4 of 8

fractions, it is not possible to comment on its performance. Though the planthas gone into operation only in 1990, it has already attained a run-down look dueto lack of proper house-keeping and maintenance.

9. The three other washeries use hand picking to separate lump coalfirst and then uee water spouts to wash the middle sizes (6-25 mm) on oldfashioned chutes for separating heavy material (sand stone, shale, etc.) fromlighter material (coal). The process is inefficient and unreliable. Since thefines (< 6 mm) remain untreated, tha external dirt and inherent ash of coalgather in this product -size. The fine coal is of very uneven quality andattracts serious customer resistance. A summary of various coal preparationplants, technology used and their actual performance during 1990 is provided inTable 3.2 (b).

10. More effective use of the coal resources can be achieved by modernwashing process for all size fractions. There are plans to upgrade the Cua OngNo. 1 plant, to build a new plant at Hon Gai and reconstruct the Vang Danh plant,all targeted to use modern technology. It is learnt that all the fines will notbe cleaned in some of the proposed plants. The Mao Khe and Vang Danh plants with100 and 70 tph capacity respectively have not yet been tendered. The cost ofupgrading the Cua Ong No. 1 plant to 2.7 mtpy throughput is estimated to beUS$10.8 million. At current production levels, all raw coal could be treated inthe No. 2 plant alone. The proposed flowsheet for the Hon Gai plant envisagesthe use of dry screening to separate the coal fractions at 6 mm and wash only the> 6 mm. The undersize c 6 mm will not be wetted, reducint. slurry problems andincreasing coal recovery. The clean > 6 mm fraction wili be blended with rawundersize in judicious proportions to upgrade the combined product to maintaina constant ash level. Additional teetwork to evaluate dry screening appearwarranted only if the market exists for coal with a resultant ash over 15%.Again, by not washing the < 6 mm size, potential export possibility is beingpermanently lort.

Transoortation

11. The coal companies operate meter gauge rail systems to transport rawcoal from the mines to the washeries and screening plants. In the case of VangDanh, clean coal is takea direct to the port at Dien Cong. The washeries at CuoOng and Hong Gai are located close to the port, but in case of Hon Gai, washedcoal has to be reloaded into rail care for another 600 m movement from thewashery to the port. Rail cars have a carrying capacity of 30 t, but at Hon Gai,larger cars are first split into 10 t unit and after washing loaded into 5 tunits for dumping by cranes directly into the holds of ships. The exception tothe meter gauge is the Mao Rhe standard gauge (1435 mm) connection to theMinistry of Transport line which carries coal to Pha Lai power stations, with 50t locomotives pulling 1,000 t payload trains.

12. The maximum distance from the mine to the preparation plants at portois 17 km. All except 4 km near Cuo Ong is single track. Trains, in most cases,comprise 10 rail cars of 30 t each hauled by 20 or 30 t capacity 400 HP Rusbian-made diesel locomotives. Of the 29 locomotives to operate this 56 km of track,

79 - Annex 3.2Page 5 of 8

10 units are usually under repair. The track conditions are generally fair withreasonable gradients (maximum 2% in favor) and a minimum of 100 m radius curves.

13. At Cua ong, there are 5 wagon cumps and 6 different methods ofloading ships from various stockpiles which are located between rail tracks.Loading rates are given as a 300 t train in 15 minutes in dry weather and 45minutes in monsoon. It seems doubtful that these rates are achieved in practice.

14. The Ministry has proposed the electrification of the Cam Pha railsystem with total trackage of 56 km. The plan would replace the 10 km of 24 kg/mrail by 43 kg/m rail and sleepers, expecting saving in diesel fuel and locomotivemaintenance costs. An overhead electrified system would require careful planningregarding size of locomotives, size of trains, turning systems, simplificatiornof marshalling and dumping which might best be accommodated by one central bottomdump station over which the locomotives lull the wagon. without stopping.However, the alternative of installing an overhead conveyor from the Coc Sau/DeoNai area, to move a production of over 2 mtpy, over a distance of about 3.5 km,directly into the Cua Ong plant should be evaluated. If covered, there will beno loading or dumping problems. Ministry Plans aleo provide for upgrading thelocomotive repair shops.

15. Depending on distance, gradient and other requirements, the linecapacity can be as high as 4.5 mtpy or as little as 0.5 mtpy. Utilization factorvaries from 10% to 115%. There is a proposal to introduce 1,000 hp electriclocomotives in Cam Pha sections where the utilization of the line iE recordedbetween 67-87%. In general, transport requirements are a function of thedevelopment plan for the mining and coal preparation operations. An integratedstudy of production, transport and markets is essential to establish the needsfor investment in transport system.

Coal Stockoiling

16. Stockpiling of coal is done at the wash plants and the ports. Themost modern system is at Cua Ong, where a sq.acker/reclaimer eystem, supplied byHitachi in 1980, stores clean coal adjacent to the port for speedy loading ontothe ships. Estimates of stockpile sizes at Cua Ong indicate that raw coalstockpiles can be as high as 10 days design levels, and as high as 6 weeks on1990 throughput. The clean coal stockpiles can accommodate about 370,000 t whichis almost six months throughput of the present export market at this port. TheHitachi system of stacker/reclaimer comprises one stacker and two reclaimers forraw coal, and 2 stackere and 2 reclaimero for clean coal, each using 1050 mmconveyors rated at 1,000 t/hour.

17. At Hon Gai port, much of the coal storage, for both raw and cleancoal, is in small twin 5 t wagons. An additional raw coal storage pile 1 km fromthe wash plant is served by a bridge crane fitted with a clamshell.

VIET NAM COAIL PRODUCTION(Thousand Tons)

.__________________________ Desiqr 1988 1989 1990

Name of Mine Raw Coal Clean Cole Raw Cole Clean Cole Raw Coal Clean Coal Raw Coal Clean Coal

Total 10.410 8,000 7,587 6,334 4, 331 3,403 5,197 4,218

A. Campha Coal Company 4,300 4.473 3,835 2,227 1,732 2,809 2,171__________________________ 5,750

1. Deo Nai COP) 1,000 - 951 - 487 - 476 -

2. Coc Sav (OP) 1,500 _ 2,007 _ 817 _ 1,409 _

3. Coa Son (OP) 2,000 _ 722 _ 380 _ 407 _

4. Thonq Nhat (UG) 450 t*] 300 t*l 189 *) 157 ()

5. Monq Duong (UG) 450 _ 201 _ 164 _ 145 _

6. Khe Cham (OP) 350 _ 180 109 130 _

7. Khe Tam (UG) - - - _ 78 _ 83 _

B. Hongai Coal Company1,900 1,600 1,546 1,268 912 688 1,018 909

1. Ha Tu (OP) 1,200 - 1,037 - 533 - 606 - I

2. Ha Lam (UG) 400 (*) 277 (*) 152 (t) 156 0) O3. Tan Lae (iJG1) 300 1*1 250 M*) 226 - 255 _ I

C. Uong BI Company 1,250 1,000 1,037 870 838 694 924 738

1. Mao Khe (Ur') 600 450 569 471 428 343 466 347

2. Vang Danh (UG) 650 550 468 403 300 258 276 246

3. Other IOP) - - - - 300 258 276 246

0. Coal Company III 1,510 1,180 511 363 352 290 446 401

1. Na Duong (UG) 600 400 255 140 169 134 120 101

2. tIui Honq (UG) 500 420 129 110 94 81 156 141

3. Khanh qoa (UG) 250 220 103 89 71 62 112 103

4. Nong Son (UG) 100 90 17 18 16 13 43 43

5. Xhe Bo IUG) 60 50 7 6 _ - 14 13

* Coal Is transported to preparation plants in lion Gai and Cua Ong Areas.Source: MOE Data supplied Lo UNDP/World Bank Mission. Table 21.

0'

0.etO

VIET NAN COAL PREPARATION PLANTS'Nme of Loti FeedMM 'Cape- Proces Equipment 1990 Clean Coal product 000 ton Rnes rOpoe-ng - Rem-ksDesign Acual :ity qpe cost :;10880- in % Lump inter. Fine Lump.% ne % Fi;e % TotIl ro % Fe

CuaOngNo.l CuaOng Port 2400 1150 48. Hand SOx6mrnm None 161 19 - -e 69 81 859 78 9-It 4.09 DepWecaton1.62At.686 24 Spout None 84 18 - 373 82 457 78. 9-11 - (maybe frNorii a.2PCusOngNo2 CuaOng Por 2700 1950 72 Jig HU.6yclone None 19 13. - - 1342 87 1357 79 -11 - -:..... ~~~~~~~~p

134 8. 1.5 . 7. . . ...1..1..676 25 tOOxl6mm lSrxlmm None 218 62 - - 200 48 418 62 6-8 -HonGal HonGal 1500 760 51 Hand 60xl6mm None 13 1. - - 771 98 784 103 9-11 0.44 StocklpilingIs naddit-674 45 Spout None 7 1.2 - - 532 99 539 80 9-11 - -onal cosot US 0.44tVangDanh VangDanh 600 491 82 H.M.Sath None None 56 14 - - 347 80 403 82 9-11 - -276 46 +15nm None 33 13 - - 213 87 246 89 9-11 - -Total 7200 4351 60- None 425 12 - - 3158 88 3583 82 - - -

2212 31- None 342 21 - - 1318 79 1660 75 -

Screening Facilities

CuaOngNo.3 CuaOng 1000 170 17 Hand (No.2plant) None 0 - - - 104 100 104 61 9-11 - -- 62 6 t50mm 15-25mm None - 39 100 39 63 9-11 - -Mao Klte Uong el 450 569 126 Hand None None 6 1.3 - - 460 99 460 82. 9-11 - -- 463 103 +25mm None 2 0.6 - - 344 99 346 75 -11 - -l(hanh Hos 200 94 47 Hand None None 0 - - - 85 99 88 91 9-11- 113 56 +25mm None 0 - - - 102 99 103 91 9-11Screening nearCuaOng - 2003 - Hand Tono.2 None 30 1.7 - - 1733 98 1763 88 9-11 Shops - 2303 - +35Or or eale None 24 1.44 - - 1687 99 1711 74 9-11 or* - - - 50mm None ------ - - 0-8

Source: MOE Data provided to UNOPIWowId Bank Miselem Table 28.

... . . . .~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~QC

* X ¢~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

VIET NAM: SUMMARY OF COAL MINE PERFORMANCE 1990

SURFACE MINES UNDERGROUND MINES QUALITYCOMPANY Location Mine Capacity Producion Stuip Ratio Capaclty Product Volatile Ash CaiorlflcDesign Actual cost Design Actual -ion cost Mater Value; (000 t) (000 t) (US SlA) Design Actual ('003t) ('000) (US Sit) (in 4) fin %) oncalcg)

Uong pi West Vang anh - - - - - 497 245 16.24 3-8 10-26 000-7500Mao Kh. - - - - - 495 347 9.16 3-6 10-32 000-7000Dong Vang 500 100 13.96 - - - - - 5 <20 . 48000YenTu S00 - 10.00 - - - - - - 13-23 8000Hon Gal Centre Ha lam - - - - - 480 125 14.65. 3-8 15-17 500-7500Tan Lap - - - - 200 204 10.45 7 12 7500Nui Beo 300 0 10.00 - - - - - 2-10 <20 0004000Ha Tu 800 606 11.92 6.70 4.90 - 104 12.50 1-14 4 )-8 0008000Nn Ha Tu - - - - - 160 104 14.64 -Can Pha Eat Deo Nad 675 357 13.60 5.60 4.80 - - - 7 14 8000Coc8au 980 1056 7.15 5.00 2.20 - - - 6 11 8400Cao 8n l500 305 19.01 7.30 5.00 - - -Iou Chin 1000 100 estdl3.00 5.50 - - - - 4-14 3-36 0008000Khe Tam 250 20 estdl3.00 0.70 - - - - - - -Thng NhatM - - - 363 90 17.12 - - -KheCham - - - - - 350 112 16.30 7-11 7-24 000 oMongoDuon - - - - - 210 130 16.61 2-20 17-21 700-8100Coal Company IllNa Duong - Lang Son(L.Flane) 250 101 18.60 5.50 6.00 - - - 4b 37 4000NuiHng - Bee ThaAnthracite) 4P5 140 3.74 4.70 2.20 - - - 2 18 000-6500Khanh Hoi - Ba Thal(S.Arftracite) 220 103 6.84 6.00 - - - - 9 i6Non Son - (S.nthraclto) 90 43 9.60 5.90 - _ _ _ 7 24-ifeBo - Vlet Thal(Coling) 19 13 29.10 - - 19 13 29.10 23 13 900LangCam - SacThalCokIng) 98 - 30.00 - - - - 24 16 7500

CAPACITY ANC PRODUCTiON OF CLEAN COAL

ProducSion Capacity Avere cosCodj Capcity 'AW ol moman Coal Uiflsed Prod. Max.cape.(0o0 tyr) (00 tyv) (000tUyr) In% Us StA US $lt

Anthraclte(inQuangNlnh) 9260 4878 381S 41.20 11.82 13.23Coking co 117 14 13 11.10 29.10 29.85Co III non-coking 1025 431 387 37.80 9.10 8 55Totals/Aver""e, 10402 5323 4218 40.50 11.63 12.96

Source: MOE Data provided to the UNDPIWord Bank Mission. Tables 21-27. tNote: Pr3duction and Costs are based on clean coal. OD0O

00

- 83- Annex 3.3

Page 1 of 3

COAL PORTS

Cua Ong Port

1. At the congested Cua Ong port there are three docks, six ship loadingunits, three wash plants and five rail wagon dumping points with a maze of tracksbetween stockpiles, refuse lagoons, etc. The depth of water in the turningcircle is between 5.49 and 10.97 m. The minimum depth of the main channel is4.88 m over a length of 30 km along a channel which requires seven headingchanges. The largest ship which can be completely loaded is reported to be10,000 DWT, but reports speak of 17,000 t being loaded into a 30,000 DWT ship.There is rock at many points in this channel. Estimates to dredge and blast fora 50,000 DWT vessel range from US$50 to US$100 million. However, reports of theMinistry of Energy suggest a cost of only US$1.3 million being required for thepreparation of the channel for 30,000 DWT ships. Keeping the channel open isalso likely to be costly. The port in said to operate on a 24 hour basis 7days/week, whereas coastal shipping currently only operates during daylighthours. Employment at the port is reported to be 3800 persons.

2. Two alternatives to improve Cua Ong have been examined by theMinistry. Both include upgrading of the shipping berths, either for larger shipsor for barges. The first is to deepen the channel to accommodate 30,000 DWTships at a total cost of about US$6 million. The second is to build a transferpoint at Con Ong (L'Abaille Island) for barges to transfer their cargo into50,000 DWT ships (or larger).

Ron Gai Port

3. The Hon Gai port is nestled between the town and a rocky headland.It comprises two docks 80 m long, one equipped for loading bargec by twoconveyors, the feed to which is throttled by a slow tub dumping system resultingin an estimated annual movement of only 300,000 t. The second dock is equippedwith two 65-year old jib cranes which lift the 5 t boxes off the wagon and dropthe coal into the ship's hold from some 25 m. A slow marshalling system with thewagons reduces the loading rate to an estimated 1000 t/day, or about 200,000t/year. T1.9 two docks are in the process of being connected using local labour.The depth of water adjacent to the dock is sufficient to load 5,000 DWT ships.However, a little further out, it is reported that a 30,000 t ship can be turnedand loaded; adjacent is a large area with 18 m of water. The channel to deepwater at Henrietta Channel is 20 km long and involves only two direction changeswhich can be navigated at high water by a 30,000 DWT ship. Ministry plans aredirected towards reinforcing the dock and installing 45 t dolphins 12 m out sothat 12,500 DWT ships can be loaded.

- 84- Annex 3.3Page 2 of 3

Dien Cona Port

4. The port of Dien Cong is at the end of the meter gauge rail line fromVang Danh and other developments in the vicinity. Mao Rhe mine to the west, alsooperated by the Uong Bi company, is served by standard gauge rail. A transferarrangement of three chain conveyors operates in the town of Uong Si to move coalfrom one system to the other. The port is on the Bachdang River where the waterdepth varies from 0.7 to 4.3 m depending on the time of year and tide. Anupgrading is currently in progress to load 500 t barges by conveyor. At presentnone of this coal is exported. When the port upgrading is completed, 500 tbarges will be able to supply coal for topping up of 30,000 DWT ships in theoffshore transhipment, provided the quality of the coals are compatible. Asseaborne coal sales increase and the offshore transfer facility is built, 500 tbarges could deliver coal from Dien Cong to the now facility as fast as marketsrequire. At present coal movement to the domestic market is only about 250,000t/year. Also, some higher volatile coal from Hon Gai enters the port forshipment to the Pha Lai power station to improve combustion. An alternative nowdock at Port Courbet, the inlet opposite Hon Gai has been examined as analternative to upgrading Dien Cong. The site appears reasonable for medium iaiedbarges; the narrow gauge railway from Uong Bi is approximately 30 km in length.

VlIET NO - STATUS AND CAPACITY OF MOAL PORTS AND UHVES

Item Raa of Port Hain Tedhnical Characteristics CapacityNo. (_1O tpy) RemarksctuatShip and/or Barge Handling Equipment and Length and Elevation DesignCapacity Capacity Structure (a)

Surfce/Bott .

Uong el CataCOMDien Cong Port Barge, 100-200t Scraper-conveyor 200 tph L2 500 _ Being reconstrutedPier on reinforced 05 0.0 for 500 t barges toconcrete piles berth. Projected

capaity Is 500,

Z Ben Can Port Barge, 150-200t Conveyor 60 tph Protruding pier, 6 hOconcrete piles 80Hon Gal Coal

1 HNon Cal Port Ship 5,000-6,000t Unloading crane at pier 1 Pier 1: L=80 GravityBarge, 200-300t 50 tpb htl building block* Gantry at pier 2: 60 tph Pier 2: LC70m GravitY OD* Conveyor at pier 3: 50 tph uall, building block cnPier 3: La10E0 + 6

Concrete piles -6.5 7.0 1200

2 Coc Port Barge, 200-300t Conveyor, 100 tph Lm46m Concrete access -. 300pfer 500 V

Cma Pha CoalCogay

I Cue Ong port (main) Ship, 10,0O0t - 3 gantries: 240 tph L=300k Wharf, gravity + 5.6 2.SQO- 2 loading spirals: 530 tph wall building concrete -9.0 3,000blocks

2 Docwstic Port 23 8arge. 200-300t Conveyor 200 tph Access pier - 300

Source: POE Data provided to Uir '4rld bank Nission.

qW

w

'lw

- 86- Annex 3.4Page 1 of 2

COAL BRIQUETTE8

The Briauette Market

1. The briquette market in Viet Nam has been estimated to be about250,000 t per year, but this figure may be understated since briquette making isa cottage industry that is not adequately captured by official statistics.Anthracite briquettes are used in Viet Nam for cooking and some space heating.

2. Two types of briquette. are marketed internationally: the cylindricaltype as used in Viet Nam and S.E. Asia, and the ovoid type used mainly in Europe.In the past, Japan and Korea provided important markets for the cylindrical type,but both markets are shrinking and imports have been much reduced. The marketfor the ovoid briquette is in Europe. Briquettes are used extensively fordomestic use in Ireland, U.K., France, Belgium, Holland and Gertmany and some inItaly and Turkey. Retail prices are about US$200/t, and 1990 imports, mostlyinter-European, were 250,000 t. There is surplus production capacity in Europe(eight plants have been closed down since 1986). In summary, the market forexporting briquettes does not look prospective, except for very small quantitiesin the order of 30,000 t per year at low prices.

Manufacture of Coal Briguettes

3. Coal briquettes are made from a mixture of coal dust, clay and water.The coal dust is available as waste accompanying deliveries of lump coal or isdelivered as such. There do not appear to be any supply problems. At Ninh Binhpower station, the boiler ash has been found to have a carbon content of 70% andis sold locally by the power station, at 5000 Dong/t, for making briquettes. Inaddition, large quantities of coal dust are available at the coal washing plants.These plants use sea-water for washing and the dust is dumped at the shore.Recovery is expensive and has only been carried out on a trial basis.

4. The simplest method of briquette making relies on hand-mixing andpressing; the pats of wet mixture are often stuck on walls to dry, rather likedung cakes in the Indian sub-continent. Many disc-shape units are made on theside of the rtreet in small molds from slurry which is obtained at little or nocost. After drying in the sun, the grey mass has an ash content of 20 to 35%,and sells for about 300 dong (3 cents).

5. Hand operated presses which use a single mold are also used by familybriquette making businesses. These briquettes are cylindrical in shape andgenerally 12 cm in diameter, though a 15 cm briquette is also made. The heightof the briquettes varies from 8 cm up to 13 cm. The smallest is said to cook ameal for a family of 4-5 while the largest is sufficient for a family of 6-7.The mold in the press incorporates a series of rods which form vertical holes inthe briquettes to help ignition. These briquette. are sometimes ratherconfusingly described as the "beehive" type - apparently because bees could beimagined nesting in the holes. The price of these is about 800 dong (8 cents)per 1 kg briquette (equivalent to US$80/t retail). Small, roughly

- 87- Annx 3.4

Page 2 of 2

rectangular shaped briquettes (about 7x4 cm) are also made by machine. These arereferred to as "pillow" type briquettes because they resemble a small pillow.

6. Various plans have been announced for producing briquettes on a morecommercial scale. One calls for a 50,000 t per year plant in the south, and onefor 30,000 t in Da Nang. The Hon Gai Company aloo has plans to build abriquetting plant to produce 500,000 t per year. The estimated capital cost isabout US$10 million. A proposal from Korea costed a 100,000 t per year plant atunder US$1 million for the plant, not including electrical equipment (totalinvestment would be around US$2.0 million, or US$20 investment per annual ton).Another report mentions a European company which has proposed to build a plantto produce about 40,000 t per year of briquettes, at a capital cost of about US$4million, including site. Feed costs, operating and maintenance costs areexpected to be about US$30/t. European costs average US$65 to US$75 investmentper annual ton, considerably higher than Asian installations.

Research Programs

7. Research and development is being carried out on ways of improvingthe ignition of briquettes. Basically, this is done by adding oil-basedproducts. A number of approaches have been successfully used but addconsiderably to the cost of the briquette. An improved type using some charcoalmixed with sodium or potassium chlorate as a bottom layer for cleaner ignitionthan paper and wood, has been developed. A further type has been developed inJapan using up to 30% bio-maos in the form of straw, grass, husks, and otheragricultural residues. It costs four times more than simple briquettes, butstill may compete with the cost of alternative household fuels.

8. The Research Center for Coal Processing and Utilization in Hanoi hasdeveloped an electrically operated press for briquette manufacture. About 35 ofthese machlnes have been built and are in operation in different parts of northViet Nam. The machine has a series of molds on a circular rotating platform.It is operated on a continuous basis by two people, one filling the molds witnthe other operating the press and extracting the briquettes. It can produce about170 briquette. per hour or 1000 per 6 hour shift.

- 88 -

Annex 3.5Page 1 of 2

.. ..... ... ..... ... ... .... ... . .. ,.. .. . . .. . . . . . .. . .. .... . ... ..... .. . ... . .. .

|''~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. .. ........§' '3S ii ealm.mEi S.

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e~~~~~~~~~~~~~~~~~~~~~~~~~~ ...... .... . ..... . .... ., , . ., .... ... ... .

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6,l '~~~~~~~~~~~~~~~~~~~~~~~~~~~ .. . ...... . . .... .......... .t.. .

HJ -:1 X : :]*~~~~~~~~: X. : !~~~~~~~~

:0 :: ga§]X.;}}-!

:VIE NA OLEXPORTS

E(ports to ls 1988 1lo8s98 1989 1989 1989 1990 1090 1990:'Amount .... Q.ua'nty U nit 'pr ice oAmr..ount Quantity UnIt pric 9 Amount Quantity -Unit price:(US $'000) (In'000 t) (us v'ooo) ~(Us $0o) (1n000 I) (us $1000) (us S'000) ::ln'0004 1)(US $00

A. Northast asia ~ 12331 280 44.00 17628 425 41.40 22533 526 42.80.1. Japan 5780 ~ 88 35.40 7178 145 49.50: 12332 226. 54.50L* LmCoal

-. 24 - -. 52 -*9-Coal fine - 64 -- 93-- 20-:2. Koe(olfnes) 6450 191 33.70 8665 223 38.80 7992 268 29.803. Talwan(Lump Coal)--

133 114. Hongktong 121 1: 86.40 1785 57 31.30 76 2 33.00Lumv L.oal -- 1- Coalfines

- . 56 -- 2-

S. Southeast Asia 358 4 89.50 1349 22 61.30 1433. 25 57.30Market(Lump Coal)1. ..Tha ..l...d 258 4: 89.50 1010 17' 569.40 '84'3 i5 56.20:2.India .-- 395 67.80 192 3 64.00:3. Malaysia ---. : - 298 5: 59.604. Phllippines -. - : - .- 100 2: so.oo

CEropean Market 1104 15: 73.60; 2937: 67 43.70 6814 1 59A131. Romania (Lump Coai) 15 73.60 99 14 72.900 :2 France (Coal fine)- 1257 43 29.20 1034 35 29.50:3 United Klngdomi(Lump Coal) So68 10 64.80

4 Notherlands(Lump Coal) - - - - ~~~~~ ~~~ ~~~~~~~~~~~~~~~~~~6780 80 7220Db Cuba (Lump Coal) 122 15. 8140 1184 15 78.40 771 10 .. 77.10Total 15017 314 47.80 23097: 528 43.70' 31511 676' 46.60Lump Coal - 9 -. I -3 -oafnee 2655 413 -- 487-

-Source: MOE Data supplied to UNDPiWorld Bank Mission. Table 41.

(DCD

lo x

Vinr N.*M COAL SECR N rVESrMENr PROGRAMSCBNARIO k 20YEAR PERIOD

(U5 Dola Mas)

EARS a-InSI- _ - - 1 i5 - - . 20 C_ f t ~~~~~~~~~~~~TOTAL Qt L CfeC ToTaL O_Q LC _FC TOTA Ot w LC f C TOTA Total

Su rface t e_L_

Ovw Truc kfi S""s Ce 4 2.7 18.0 20.7 40 8.2 34.0 8 10.3 4 2 7 10.0 2 .7 4 2.? 18.0 20.7 72.4OIac .vat I0-12 40 1.8 3. 2 4 .8 1L . 112 0. 60 . .72' 40.D 40 '10 18.0 1. 100.3Notor Srader

4I.10. 01 .8 0.3 3.8"loctl?aj3IaL Spre nd Co la * S 2: :. 4.01 5 2 7 2 6 :.. S3:' 216 4313 51: 1':,MP LS 2.0 16.6 5 e.s Ls 2.0 7.0 9.0 LS 1.6 16.4 18.0 LS 1.4 12.6 14.0 59.8I'l _ 32.6 107.5 120.11 1 _ .6 75.6 05.2 - 16.4 147.7 164.1 _ 12.4 106.2 120.6 490.0tyre

aT 4 0.8 4.2 5.0 - 0.4 2.1 2.5 3 0.7 4.6 5.3 2 0.4 2 0 15.3an 2 4.01 35.:00 1. 2.0 7.5 0.5 1 3.0 11.2 14.2 I 3.0 132' 14. 56.9 2. . . . .3:02. .01 3: 21:SisI 1.0 2.0 3.0 US1. 2.0 :0 L:2 '2.0 1.0 - : 1:00200 1on _ 0.0 - 8.0 _ 8.0 - 8.0 _ .0 - 8.0 _ 8.0 - 8.0 32.0;t - 7.4 11.6 19.0 6.2 6.8 13.0 _ 6.0 10.0 16.0 _ 6.8 8. 15.4 63.4

Others 22.2 34.8 57.0 18.6 20.4 39.0 - 19.7 29.8 49.5 _ 20.2 25.9 40.1 191.6TOTAL

Undergrouond "Ines I 11.0 8.0 19.0 - - 1 110 80 9. --- 38.0TUnndtollnd Eqtirn nt 5.5 4.0 9.5 5 2.7 6.0 13.7 _ 7.7 6. 0 313 7 _ 11.0 8.0 19.0 85.9TunnslIng _qan 1 16.5 12.0 28.5 _ 7.7 6.0 13.7 _ 18.7 14.0 32.7 _ 11.0 8.0 19.0 93.9 0TwransportatronInfrastruceture

Dv-locmnt is km 4.0 .:2 5.2 10 01m 2.7 0.8 3.5 10 km 2.7 0.8 3.5 10 km 2.7 0.8 3.5 15.7LS 1. .2 2.0 0.9 0.2 1.1 0.9 0.2 1.1 0.9 0.2 1.1 5.3Miscellaneous (spar** o '. LS 7 ' .6 07 130. . . 0.61 1.0 *.O 2.1 0.9 3.0 2.1 0.0 3.0 2.1 2:1~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~01 :3 11:TOTAL 10.4 3.1 13.5 6.3 2.6 8.9 6.3 2.6 8.29 6.3 2.6 6.9 40.2Coal Preparation Plant

Repairs {2h) ~ $2.5 2.0 2.50 4.0 0.51.0 2.0 2.20 2.0 4.0 2 14.0TOTAL. 0.3 .0 5.3 .2 1.8°1.7°0.2 1.5 1.7 1.8 1. .7 1. 40.5 12.0 8.S 0 0.2 7.5 1:. 4. 77 119 5________________________ 0.8 0.5 1.0 .1 Al 1:2 0.5~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~02 2 6.Tr..ack TasotadSoge0.5 2.0 2. 0.2 1.0 1.02 0.5S 1.5 2.00 0.5 1.5 2.00 7.7Upgradation/Electriflcation) 2.21 0.i 02.7 0.5 1.0 1.5 1.0 1.0 2.0 0.8 1.2 2.0 18.2Loco.ojtimlesadNina Ctars 6.5 12.0 18.5 2.6 6.0 6.6 4.4 7.5 11.9 4.2 7.? 11.9 50.9TOTscAL *nses 1.0 5.0 6.0 0.5 2.5 3.0 0.5 2.5 3.0 0.2 1.3 1.5 13.5

TOTrL 96.2 174.4 243.6 45.3 113.1 156.4 66.0 204.0 270.0 54.3 153.7 208.0 880.0WorkshenMachinr tools

Tire Retreain

Others sad CastilWOther. Ald §v1l Woerks

TOTAL

Technical Assistance

6GRAN TOTAL

Over 20 years. L.C. U5234.B millon

TOTAL. L.U )OAdd Contingoenscy I a

A~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 2:

- 91 -

OF D ANN= Ao=CAER 4E POW- E SECOV R

ANNEX NUMBER

4.1 (a) Accoundng Methods used by Viet Nam Power Companies@) Electricity Tariffs in Viet Nam(c) Capital Depreciation Rates

4.2 Historical Regional Electricity Demand Characteristics (1981-90)

4.3 (a) Descripdon of Thermal Generating Facilities in Viet Nam(b) Thermal Generation Planning Parameters used in WASP/ENFEP Studies

4.4 (a) Description of Hydro Geneaing Resources in Viet Nam(b) Hydro Data used in ENPEP Model(c) Technical Characteristics Used for Cost Evaluation of Proposed Viet Nan Hydro

Power Projects(d) Hydropower Project Planning and Institudonal Strengthening Consultant Services -

T.rms of Reference

4.5 (a) Levelized Costs, Fuel Usage and Efficiency Characteristics of Alteative 100MW Generating Plant

4.6 Laest Cost Planning with an EHV Interconnection in Viet Nam

4.7 Summary of ENPEP Expansion Scenarios

4.8 (a) Generation Expansion for Base/High Load - Limited Gas(b) Generation Expansion for Base/High Load - High Gas

4.9 Amortized Cost and Average LRMC for Generion(a) Case 32 All Viet Nam Lower Load 2 BCM Gas in 1995 EHV 1994(b) Ca 37 All Viet Nam Higher Load EHV 1994, 2 BCM Gas after 1995

4.10 Estmate of Regional Transmission and Distrbution Investment Base Costs(a) Northern Region PCI 1992-20100) Southem Region PC2 1992-2010(b) Central Region PC3 1992-2010

4.11 (a) LRMC of Supply & Net Present Value of Losses, Case 32 : Scenario 1(b) LRMC of Supply & Net Present Value of Losses, Case 37: Scenario 2(c) Estimation of Short Term Marginal Cost of Supply

4.12 Financial Analyses for the Lasto-Cost Expansion Plan(a) Methodology(b) Cash Flow Analyses - Scenario 1(c) Cash Flow Analyses - Case with 10% interest on Long Term Forei Debt

4.13 Summary of Recommendations to be considered in Project Preparaion for Loan Funin

- 92 -

Annex 4.1 (a)Page 1 of 2

Accountin-oi Methoda Used By Viet Nam Power Companies

1. The historical financial information of the energy companies ispredominantly according to the previous USSR system of accounting. Financialamounts are mostly recorded at standard unit prices or costs, designated bygovernment, and actual revenues and costs are often hidden or badly distorted.The accounts contain much detail, but under-reporting of amounts is probablyprevalent. The value of fixed assets is determined on the basis of historicalstandard unit costs at the time of investment and occasionally revalued.During the last decade, revaluations have taken place in 1981, 1985 and 1989,after approval by government. The principle applied in revaluation is toadjust assets of foreign origin according to exchange rate changes, and assetsof domestic origin according to domestic inflation. The revaluations have notbeen sufficient to increase the value of fixed assets in the energy sector tothe value of comparable installations outside Vietnam.

2. The exchange rates used for accounting purpQses since the lastrevaluation in late 1989 (i.e. during 1990 and 1991) have been d2400/Ruble andd3900/US$. For 1992, the proposed exchange rate for both the Ruble and US$ isthe same i.e. 12000 dong, implying a one to one exchange rate between USS andRuble. The prevailing black market rate of US$ in Moscow is now close to 100Ruble per US$. Just a few years ago, as shown in Annex 1.11 the officialaccounting rate in the Soviet Union and Vietnam was US$1.4/Ruble. However, arationale for keeping the high Ruble to USS exchange rate in Vietnamaccounting might be that the previous Ruble loans have repayment clauses witha fixed high Ruble to US$ rate.

3. Depreciation rates include capital depreciation and "big repairs"depreciation. Depreciation rates used by the main coal mines, on average12.4% in 1990, reflect a reasonable capital allowance on production equipment.In the electricity sector, the rates range between 2% and 9% per year (Annex4.1(c)). However, the rates applied to the various generation plants and bydifferent companies for similar type of plants vary considerably. For thermalpower plants, the average depreciation rate applied by PC1 is three timoshigher than the rates applies by PC2, i.e. 8.3 and 2.7 percent respectively.Also for hydropower plants, PC2 applies much lower depreciation rates thanPC1. The overall depreciation rate in the power sector is only 3.4%/yr.Accordingly, the allowance for capital in the standard unit cost calculationsappears too low to account for wear and tear on capital in place and itsreturn, in order to source equity for new investments. Little or no financialinterest costs are recorded in the accounts of any of the companies.

4. The "Standard Unit Costs" (SUC) in the coal sector appear to have beenreasonable as far as depreciation rates are concerned but probably haveunderstated the other mine inputs (labor, fuel and materials, marketing), andtransportation costs from the minehead to points of sale. In the PowerSector, the SUC accounts for expenditures on fuels, materials and labor valuedat standard unit cost, plus taxes and interest, and an allowance for capitaldetermined through a depreciation rate applied to fixed assets. The SUC ofthe various power companies range from USc 0.4-0.6/kWh (i.e. less than 1 cent)in hydropower stations, UScl.5-3.0/kWh in coal fired thermal stations andaround USc4/kWh and above in diesel and fuel oil generation plants. The lowSUC of

- 93 -

Annex 4.1(a)Page 2 of 2

hydropower stations reflects its assigned low capital allowance. Inhydropower stations, depreciatLon in by far the largest cost componentnormally accounting for more than 85 percent of total cost. In thermal power,the fuel cost is the largest component of costs with some 80 percent of totalcout. Wages and salaries constltute only 2 percent on total operating costsin the powor sector of Vietnam.

5. The present transition into a more market oriented economy is reflectedin several accounting changes. The French accounting principles have beenintroduced with effect from 1 January 1990. The revised accounting systemwhich is in the process of implementation, implies fewer accounts than beforeand for example accounts for debt, equity, retained earnings, short termassets includLng foreign exchange and accounting for foreign exchangefluctuations. Hopefully the new accounting systems will overcome the problemof the past which was a lack of managerial accounting, to set prices and tomake investment decisions based on realistic economic criteria.

- 94 -

Annex 4.1(b)Page 1 of 1

ELECTRICITY TARIFFS IN yIETNAM at March 1 1992

4i/Kh ML=/K

Residentialretail (base tariff) 450 4.09bulkrural, consumer's subst 360 3.27resid, consumer's subst 400 3.64power ccepany's oust - 420 3.82

6KV & Over Under 6KV 6KV & Over Under 6KVd/RWh d/KWh USc/KWh USC/Kwh

Industrial & InstitutionalIntermediate period (base) 450 480 4.09 4.36Off-peak period 300 320 2.73 2.91Peak period 750 800 6.82 7.27

Pumping 180 190 1.64 1.73Public Lighting 400 3.64Foreigners

Residential 9.00Industrial 8.00

Notes: 1. Tfme-of-day tariff is optionalIntermediate period 4.00 hrs to 18.00 hrsOff-peak period 22.00 hrs to 4.00 hrs (for PC2 only in wet season)Peak period 18.00 hrs to 22.00 hrs

2. Max price for residential sub-customer is dS00/KWh. The cost of meters willbe borne by the power companies and the customers will rent them.

3. In dry season, in regions with shortages i.e. for PC2 and PC3, highertariffs apply for excess consuoption over . given quota per household. Thequotas (usuw lly between 30KWh and 90KWh per month) are established by PC2and PC3 regional directors with collaboration from the local Peoples#ComfIttee.

Excess above Monthly Quota Factor by which Tariffincreases

1X to 50X 150Xabove 50X to 2001 2001above 201X to 300X 250Xebove 300X 300X

4. Staff of the government, army, police and some other groups of consumersreceive subsidies that range up to d40,900 per month, according to salaryscales and expected monthly consumption. These persons in effect pay aboutd40/KUh, up to a maximum quota.

5. Assumes an excnhange rate of d11,000 to the US dollar

- 95 -

Annex 4.X(c)Page 1 of 1

CaRital DeDreciation Ratea

The capital depreciation rates applied in the electricity sector are:Depreciation rate

Hydropower (Percent p.a)

Electrical equipment and materials < 1 MW station 8-------------- 1-10 MW n 5

------------ _--------------------- > 10 MW " 3.5Headrace tunnel 2.5Dam, concrete 2Dam, rockfill 3

Thermal

Electrical equipment and materials < 10 MW 7_____________-__--"-------------- > 10 MW 5Gas turbine 8

Transmission line

High and middle voltage > 6 KV Wood col 9Metal & concrete 4Underground 6

Low voltage 8

Subsations and transformers

< 1 MVA 7> 1 MVA 4

Taxes levied on oower comoanies include.Percent

Gross revenue tax 8Fixed assets and working capital 2.4Net taxable income 30Resources (hydro)

Vietnam Regional Electricity Demand Characteristics

PCI-Northern Region PC2-Southern Region

Year Indus Agri Non Ught Total Loss Generation Year Indus Agri Non iUght Total Losseneration Exportrlal cult Ind Dornes Sales Energy Peak rial cult Ind Domes Sales Energy IF Peal; PC3Gwh Gwh Gwh Gwh Gwth bwh LF MW Gwh Gwh Gwh Gwh Gwh Gwh MW Gwh1981 788 266 190 263 1506 25% 1996 0.71 323 1981 669 32 87 371 1159 24% 1575 0.70 258 311982 891 -A 1 227 278 1596 25% 2115 0.71 341 1982 696 27 106 381 1210 26%h 1695 0.70 277 411983 944 187 218 300 1649 23% 2141 0.71 345 1983 701 27 110 394 1232 25% 1733 0.70 284 681984 1117 251 265 342 1974 23% 2553 0.71 411 1984 793 30 121 423 1367 24% 1900 0.70 311 761985 1137 238 312 454 2141 25% 2848 0.70 464 1198 842 33 121 449 1444 23% 1966 0.70 322 781986 1244 263 359 514 2380 26% 3237 0.70 528 1986 827 34 129 493 1482 23% 2026 0.69 333 811987 1344 308 370 610 2632 26% 3537 0.70 579 1987 895 42 180 540 1656 22% 2239 6.69 370 921988 1459 351 420 618 2848 26% 3872 0.70 632 1988 959 53 232 607 1851 22% 2529 0.69 419 1111969 1385 352 380 881 2997 31% 4359 0.69 721 1989 1055 69 278 869 2271 22% 3068 0.68 516 1201990 1462 483 373 857 3175 35% 4877 0.69 802 1990 1193 72 299 1016 2579 21% 3457 0.68 582 137Growth Rates Growth Rates81-90 7% 7% 8% 14% 9% 10% 81-90 7% 9% 15% 12% 9% 9% 18%

PC3entral PRegon Aggregate Regional Demand 1981-1990

Year Indus Agh Non Ught Total Loss eneration Year Indus Agr Non Ught Total Lossenerationdal cult Ind Domes Sales Energy UF Peak rial cut Ind DomesSales MW@LFGwh Gwh Gwh Gwh Gwt Gwh MW GW h GM GWUh GWh GWh GWh UF1941 60 18 18 57 153 21% 155 0.66 27 1981 1516 316 295 691 2819 24% 3726 0.70 6071982 72 19 19 58 168 22% 163 0.67 28 1982 1658 246 352 717 2973 256 3973 0.70 6471983 109 24 26 68 227 18% 194 0.68 33 1983 1754 237 354 763 3108 24% 4068 0.70 6621984 122 27 29 78 256 22% 232 0.68 39 1984 2031 308 415 843 3597 23% 4685 0.70 7611985 129 32 30 82 274 21% 249 0.68 42 1985 2108 303 464 985 3859 24% 5063 0.70 8281986 133 34 34 88 289 20% 262 0.68 44 1986 2204 331 522 1094 4151 25% 5525 0.70 9061987 145 37 34 93 309 22% 278 0.68 47 1987 2383 387 584 1243 4597 24%b 6054 0.69 9951988 160 46 36 107 349 25% 318 0.68 54 1988 2579 449 688 1332 5047 25% 6719 0.69 11051989 177 50 41 131 399 24% 365 0.67 62 1989 2617 470 699 18O 5667 27% 7792 0.69 12981990 195 54 48 173 471 14% 388 0.66 67 1990 2850 608 721 2046 6225 29%8 722 0.69 14 1 OQRGrowth Rates Growth Rates81-90 14% 13% 11% 13% 13% 11% 81-90 7.3% 7.5% 10.4% 12.8% 9.2% 9.9% 10.2o

I-as

- 97 -Annex 4.3(a)Page 1 of 3

Descriotion of Thermal Generating Facilities in Viet Nam

PCI Northern System

1. In the north the three principal coal fired steam generating stations areall within 100 km of Ha Noi. They include; Pha Lai (440 MW), Nin Binh (100 MW),and Uong Bi (95 MW). The plants are of Soviet and Chinese manufacture, locatednear anthracite mine sites, and using cooling water from adjacent tidal riversystems. All of the plants are in poor condition generally attributable to thelow quality of equipment design. The boilers typically require 10-15 daysmaintenance after every 1500 hours of operation, primarily due to fuel feed andcombustion control problems associated with the use of anthracite coal whichhas a low volatile and high ash content. The turbines in most plants areconsidered to be of better quality, but many have broken blades, crb±y dueto creep cracking of unsuitable blade materials. There are generally majorproblems with water treatment plant both for feed water and cooling systems dueto the lack of chemical treatment. If not corrected, they could result inserious long term boiler damage. The coal handling systems at most stations runat less than 60% design capacity causing bottle-necks in the productionprocess. There are also significant environmental problems owing to air andwater pollution.

2. The Pha Lai power plant is the largest and most significant thermal powerstation in the PC1 area. While it needs exte..sive refurbishment effort, thestation has a major role to play in the power supply of the northern region.However the sudden withdrawal in 1991 of the team of Soviet experts who hadbeen assisting the Vietnamese staff has exacerbated the difficulties faced bythe 2,450 station staff. There are concerns that an overall management v;ew ofthe power generation process is missing and that there is no coordinatedcontrol of the different groups. The other two thermal plants are much olderand their future less cer;ain. The Ninh Binh plant which first operated in 1974is in very poor operating condition resulting in inefficient combustion of thecoal. A report prepared for the government in June 1991 by a UNDP consultantconcludes that the plant is unsafe and should be shut down pendingimplementation of a major rehabilitation exercise, including development andimplementation of a comprehensive training program, and the completereturbishment of the plant based on a detailed technical plant survey. Althoughthe Uong Bi station has been in operation since 1974, the station is now in"reserve" status and has not operated since February 1991. Four 1963 vintage12.5 MW units are used for reactive compensation, the boilers having beendemolished. The station is reportedly available to run at 50% capacity with 12hours notice, but this must be very questionable.

PC2 Southern System

3. The two principal fuel oil fired steam generating stations in the southare Thu Duc (165 MW) and Can Tho (33 MW). The Thu Duc site is close to Ho ChiMinh and is being developed to include additional gas turbine and combinedcycle capacity in the expectation that gas will be available by 1996. The ThuDuo plant is American made, it is well run and achieves good operationalavailability despite the severe lack of spares and replacement parts. Althoughits performance has recently improved owing to assistance from Sweden, the

- 98 -

Annex 4.3(a)Page 2 of 3

measures taken were esse-tially short term and the plant will need majorinvestment in refurbishmenc to restore its full capability. Particular areas ofconcern are frequent boiler tube leaks, severely damaged turbine blades andauxiliary equipment, electrical equipment failures and feed water controlsystem mal-operation. The Can Tho site is 170 km from Ho Chi Min and canpractically only be supplied with fuel oil delivered by barge. The Can Thoplant, though small plays a critical role in the power supply to a prosperousand rapidly developing region of the Mekong Delta. It is of Japanesemanufacture but also ha. serious equipment reliability problems and suffersfrequent forced outages. Because of the weak transmission link with the Ho ChiMin system the plant is generally run at full load, thereby resulting in a veryunreliable power supply situation.

Isolated Generatina Plant

4. PCI and PC2 also operate smaller gas turbine stations in variouslocations. The sole PCI unit, located in the Thai Binh province east of Hanoiis fuelled by gas from a small local field. The plant has two gas turbines(16.5 MW rated output) but only one is available at an effective rating ofabout 12 MW. The other unit is severely damaged. These units were originallyused in the south and were transferred to this location in 1981. As no furthergas has been discovered in this area it is unlikely that these gas turbineswill be extended, but they provide a significant end ase for the local gas. PC2operates gas turbines at Thu Duc, Can Tho and Baria all of which supply the HoChi Minh system. At present there are seven machines with a total capacity of126 MW but currently the available output is limited to 26 MW. Five makers arerepresented and initial operation dates range from 1962 to 1988. Three unitswere previously located at Hai Phong and one turb.&ne was acquired secondhand.All use diesel oil. A new GEC-Alsthrom Frame 6 machine (37.5 MW) was recentlycommissioned at Thu Doc. PC2 has plans to procure three more such units,initially using diesel but later to be converted to gas; one for Thu Duc andtwo for Baria. Both pairs of sets are to be convertible to combined cycleoperation some time in the future.

5. Both PC2 and PC3 also operate a substantial number of scattered dieselplant. In the south PC2's installed diesel plant capacity is over 200 MW withonly about 70 MW available. In the central region PC3's installed capacity is160 MW with about 75 MW available. These are a variety of makes from USA, andfrom eestern and western European sources. Between 1988 and 1991, a UNDTCDconsultant provided assistance in establishing a central repair and maintenancefacility at Da Nang for the diesels. He also carried out a study of theupgrading needs of diesel plants and recommended expenditure of some USS 5millions for refurbishment and further training. It is unlikely however thatthese plants will be economic beyond 1995.

Operatino Record of Thermal Plants

6. The poor operating record of all the thermal plants, and the gas turbinesin particular, is primarily due to the absence of spare parts and outsideassistance for most units. Although the variety of machine types exacerbatesmaintenance difficulties, the main reason for the problems is poor operationand maintenance practice, often under the pressure of system demand for morepower. Several gas turbines had been kept in operation after initial faults

- 99 -

AnneX 4.3(a)Page 3 of 3

occurred until major damage was done, and there has been little recognition forthe operational guidelines given by manufacturers. There is also a fairlycarual approach taken to relocaticn of gas turbines. Although they are skidmounted and transportable, their disassembly and setup on site must beaccurate, and is a highly skilled operation. Similar Droblems apoly to otherthermal plants, and cannot be fixed without a comnrehensive trainina ProaramZor both senio -nginger and the skilled plant o2erators to prevent furtherdeterioration of plant capabilitv. There would also need to be a review of theorganizational requiremeftts to reduce the costs of operation and make the bestuse of the personnel available.

VIETNAM ENERGY SECTOR REVIEW

THERMAL GENERATION PLANNING PARAMETERS USED IN WASPIENPEP STUDIES

Fixed System ENPEPOperating Heat Rates System Parameters Operating Cost Capital Cost(Committed) ID C(apacity Min. Average Spin. Maint. Flxed Var.Plant Name CODE Min. Max. Un Stn Cap. Incr Max Fuel Resv FOR Shed. Class O&M O&M FC LC Con Total Uf Lvlsd @MW MW Its i/S callkWh Efly Type % % dlyr MW $IkW.m $/MWh $/kW $/kW yrs $USm yrs LF'9.6Ninh Binh ST NBC1 8.0 22.0 4 1973 3820 3220 25.00%o MINE b% 200h 50 25 0.40 2.60 284 57 2 $30 15 2.80Uong Bl ST UBCI 16.0 45.0 2 1977 3820 3230 25.0% MINE 5%h 20%o 50 50 0.40 2.60 111 56 2 $15 15 ?.21CanTtoGT CTGT 6.0 20.0 1 1985 5810 4395 17.9% DIES 8% 10%h 40 25 0.66 4.05 0 $0 15 12.81Pha Lai ST PLCI 38.0 110.0 4 1987 3035 2570 31.5% MINE 6% 15% 50 '00 0.35 2.60 93 23 2 $51 15 1.66Thu Duc #1t2 TDOA 20.0 66.0 2 1990 3210 2730 29.9%6FOILUGAS 6% 6% 30 50 0.58 1.80 208 50 0 $34 15 2.45Thu Duc#3 TDOB 10.0 33.0 1 1990 3210 2730 29.9%FOIUGAS 6% 6%/o 30 50 0.58 1.80 208 50 0 $9 15 2.56Can Tho ST CTO2 10.0 33.0 1 1990 3250 2785 29.4% FOIL 6% 4% 20 50 0.58 1.80 248 60 2 $10 15 6.70Thu Duc GT TDGT 10.0 45.0 1 1990 4210 3285 24.7%DIES/GAS 8% 10% 40 50 0.66 4.05 186 22 2 $9 15 2.84Baria GT BRGT 6.0 20.0 2 1990 4145 3140 25.0%DIESIGAS 8% 10% 40 25 0.66 4.05 75 25 1 $4 15 2.50Total Fixed Thermal Cap. 921.0 MW Total Rehabilitation Costs $162Variable System

Lv5sd@(Alternalives) MW MW I I/S cal/kWh Effy Type % ° d/yr MW $/kW.m $JMWh $/k S/kW yrs $USm yrs LF=0.8_____________ ----- ---- ------ -- ---- ----- ----- _ ------ ___ ---- ---- ---- ---- ------ ------ ______ ______ --- ------ _ _ _Nonh Surplus HYBI 50.0 50.0 5 1996 3910 3425 22.0% MINE 5% 10% 35 200 0.40 2.60 50 50 5 $25 5 255Baria ST BSG2 17.0 56.0 1 1995 2690 2300 35.6% GAS 6°h 6% 30 50 0.20 1.00 600 400 3 $56 25 3.51Baria C-C BCC2 20.0 100.0 2 1995 2326 1830 44.6% GAS 8%h 6% 40 100 0.30 200 480 320 2.5 $160 20 293New C-C NCC2 70.0 360.0 1 1996 2060 1750 47.5% GAS 8% 6% 35 180 OAO 1.50 408 272 3 $245 20 2.58Phu My Gas PMG2 45.0 150.0 2 1996 2370 2030 40.4% GAS 6% 6%h 30 150 0.20 1.00 600 400 3 $300 25 3.35Pha Lai B PL1B 40.0 110.0 2 1997 2750 2515 33.1% MINE 6% 8% 40 100 0.40 1.50 660 440 4 $242 25 3.69PhuMyCoal PlivC2 70.0 200.0 3 1998 2550 2320 35.8% COAL 6% 8% 40 200 0.40 1.50 750 500 4 $750 25 4.56Quang N.nh ONCI 70.0 200.0 5 1998 2550 2320 35.8% MINE 6% 8% 40 200 0.30 1.50 690 460 4.5 $1,150 25 &71Total Vadable Capacity 2736.0 MW Total Construction Costs (excluding IOC) k903Notes:I ENPEP CodeXX)OYZ where generaily, XX Station; Y Fuel; Z region: Fixed system Implies existing and commited plants In 19904 Heat rates. :uel type, and Iwelised costs shown for Fixed System units alter rehabilHation.2 Levelised costs for Ninh Binh, Uong Of based on preliminary estimates It rehabilation goes ahead as planned3 Baria C-C' reflects fina arrangement after heat-recoveryAurbo-generator equipment is Installed on 2*37 MW Gas Turbines at Barla and Thu Duc.4 Norh Surplus Is a hypothetical simulation case for Southern systern studies assuming EHV supplied from Pha iLai operation.

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Annez 4.4(a)Page 1 of 2

Descrigtion of Hydro Generating Raeources in Viet Nam

Backgrounds

1. It Viet Nam there is a total hydroelectric capacity of 1388 MW inoperation and 1492 MW under construction. In the north the major hydro powerstations include Thac Ba (108 MW) and Hoa Binh (currently 720 MW, ultimatecapacity 1920 MW by 1993). In the south the major plants in operation includeTri An (400 MW) and Da -Nhim (160 MW). In the south central region the majorplants under construction include Vinh Son (66 MW), Song Hinh (66 MW), and ThacMo (160 MW). Both Hoa Binh and Tri An were recently completed built by localforces with assistance from the Soviet Union. The Thac Ba and Da Nhim schemeare much older plants which are apparently operating without problems. There isconsiderable potential for further development of hydro resources and thegovernment is pursuing an active program to develop them. The site at Yali, forexample, is already well developed and there is a considerable investment inthe roading, and local infrastructure.

PP1 Northern System

2. The Hoa Binh hydropower station located at the Da River 70 km southwestof Ha Noi is constructed for eight units of 240 MW of which three are presentlyin operation. The remaining five sets are planned for commissioning at sixmonth intervals beginning in December 1991, and expected to be complete by June1993. Although financing for units #4,5,6 has been arranged, this is not thecase for units #7 and 8. Civil works at the site is substantially complete,although there appears to be considerable remedial work needed to rectify andprevent erosion at the base of the downstream of the dam where the spillway isdischarging. There is a threat to the dam arising from the asymmetric locationof the spillway discharge, and the vulnerable nature of the dam foundation. Theproblem has been investigated by hydraulic model testing and the designers arereported to have proposed permanent protective works, which are underdiscussion by the government. In view of the importance of this maior grojectto the northern economy. it would be advisable for the Vietnamese authoritiesto apn2oint an indegendent international oanel of exoerts to review and commenton the Drogosals for reinstatement.

PC2 Southern System

3. The Tri An hydropower station in t A, southern region, about 100 kmnortheast of Ho Chi Minh was commissioned in 1990 and is in full operation withfour units of 100 MW each. Although the quality of the workmanship is sub-standard, the station functions well and PC2 staff are considering civil worksmodifications to increase capacity by 10 %, depending on the capability of themechanical and electrical measurement equipment. The construction equipment,mainly of Russian origin, has been taken over by the Vietnamese and has beentransferred to Thac Mo site where works commenced in November 1991.

4. The three new projects under construction in 1991 include the Vinh Son,Song Hinh, and Thac Mo schemes, all of which are the southern PC3 - northernPC2 area. The Vinh Son hydropower scheme is presently un4er construction bylocal companies under the management of PC3, the Ministry of Construction andthe Ministry of Water Resources. It is scheduled for completion in 1993. Acontract with a French company has been secured for the design of the penstock

- 102 -Annex 4.4(a)Page 2 of 2

and the powerhouse plant. The civil works are well advanced, about 40% arecompleted, and &l1 preparation work and site installation works including staffhousing are finished. A transmission line of 110 kV fxom site to Quy Nhon isunder construction. The Sona Hlnh hydropower scheme is expected to start in1992 for completion in 1995. The feasibility study war completed by PIDC2, andtech-tcal design is in progress. Plant and equipment is to be supplied fromNorth Korea and civil works carried as for Vinh Son. The Thac Mo projectcommenced in 1991, and the station le planned for commissioning in 1994.However given the quantity of earthworka involved a completion date of 1996would be more realistic. Design of the civil works is in progress by PIDC2 butthere are still a number of serious technical questions to bo resolved.Construction work will be carried out as for Vinh Son and Song Hinh and plantand equipment is to be supplied from the Ukraine.

Deeign and Construction of New Plant

5. Design and construction work on the new plants is generally being handledby the Power Investigation and Design Companies (PIDCl and PIDC2). The PIDC'shave designed and supervised the construction of a nxumber of other smallprojects (eg Dray Linh 12 MNW) and undertaken the civil engineering elements ofthe medium sized Viah Son, Thac Mo and Son Hinh projects. However the design,supply and installation of headwords equipment, penstocks and power house planthas been contracted to foreign companies. Civil works are being carried by VietNam's own forces using old construction equipment salvaged from the Hoa Binhand Tri An projects. Material like cement is delivered from Hai Phong factoryin the north and transported by train to Quy Nhon from where the contractorsare shipping it by truck to site; reinforcement steel was imported from Russia.Preparation and modification of steel forms which had been taken from Hoa Binhis done in workshops in Quy Nhon as well as regular laboratory testing ofconcrete. However technical assistance in site manaaement and suvervision aswell as suDoort in suODly of scares will be desirable to increase theefficiency of construction works and to improve thelr gualitv.

HYDRO DATA USED IN ENPEP MODEL

Fixed System ENPEP Unit nst'd Annual Period Inflows/Qtr Storage Operatn apital Co0tPlant name CODE Size Cap O/L Cap LF 1st 2nd 3rd 4th % of Cost CoDs Total Life

LW MW yr GWh % GWh GWh SWh GWh GWh An. $/kw.m yrs SUSm yrs

Da Nhim DNH2 40 160 1992 1055 75t 220 218 267 350 256 24% 0.55 $0Trn An TAH2 100 400 1992 1748 50% 236 235 666 611 322 18% 0.74 S0Hoa Binh 41,2,3 HBIA 240 720 1992 3152 50% 810 765 687 890 407 13% 0.16 SnThac Ba TBHN 36 108 1992 305 32% 78 54 83 90 150 49% 0.67 $0Hoa Binh #4,5.6 HBIB 240 720 1993 3152 50% 810 765 687 890 407 13% 0.16 S0Hoe Binh 17,8 HBIC 240 400 1994 2098 50% 540 510 458 590 266 13% 0.16 S0Thac Mo TMH2 80 160 1994 650 46% 110 110 260 170 286 44% 0.55 S0Vinh Son VSH3 33 66 1995 232 40% 52 46 44 90 73 31% 0.86 5 S0Song Hinh SHH3 33 66 1996 302 52% 63 55 54 130 84 28% 0.86 S0

Total Fixed System 2880 12694 50% 2919 2758 3206 3811 2251 18% Total Rehab. Cost $0

Variable Systef LvldPlant Name MW MW yr GWh % GWh SWh GWh GWh GWh $/kW.m $/kW $/kW yrs $USm yrs Cost

----------------- ----- ---- ---- ----- ----- --- ---- ---- ---- ---- ---- ----- ------- ----- ----- ---____--------c/kWhYall & 500kV Link YL3T 175 351 1997 1750 57% 368 390 454 538 180 10% 0.37 1250 500 5 5614 40 5.28Yall 11,2 YL3A 175 350 1998 1750 57% 368 390 454 538 180 10% 0.37 782 138 5 5322 40 2.81Yali 13,4 YL3B 175 350 1999 1750 57% 368 390 454 538 180 10% 0.37 400 100 2 $175 40 1.57Ham Thuam HTH2 100 300 1999 960 37% 164 174 356 266 363 38% 0.35 1054 186 5 5372 40 5.87Ca,. Don CDH2 30 60 2000 262 50% 46 46 106 64 84 32% 0.74 1500 250 4 5105 40 6.13Plle Krong PKH3 65 130 2001 780 68% 184 184 190 222 300 38% 0.61 1164 205 4 $178 40 3.50Dami DMH2 80 160 2001 570 41% 98 104 208 160 205 36% 0.55 733 129 4 $138 40 3.77Dong Na. DNH3 84 252 2003 1164 53% 122 126 547 369 72 6% 0.44 1743 308 5 5517 40 6.69Son La #1,2 SLIA 300 600 2005 3206 61% 657 730 927 892 1080 34% 0.12 2983 850 6 $2,300 40 10.64Son La 13,4 SL1B 300 60C 2006 3206 61% 657 730 927 892 1080 34% 0.12 300 60 6 5216 40 1.02Son La 15,6 SLIC 300 600 2007 3206 61% 657 730 927 892 1080 34% 0.12 300 60 6 5216 40 1.02Son La #7,8 SLID 300 600 2008 3206 61% 657 730 927 892 1080 34% 0.12 300 60 6 5216 40 1.02Son La #9,10 SLlE 300 600 2008 3206 61% 657 730 927 892 1080 34% 0.12 300 60 6 $216 40 1.02Son La 411,12 SL1F 300 600 2008 3206 61% 657 730 927 892 1080 34% 0.12 300 60 6 S216 40 1.02

Total Variable System 5202 26472 58%5292 5794 7877 7509 7864- 30% Total (excl IDC) $5,187

Notes:

1 ENPEP code : .XXYZ. where: XX Station; Y hydro or 'Z'; Z Region or Stage.2 YL3T Includes cost of construction of the first phase EHV transmission line. Q p

YL3A gives unit cost of Yall without EHV. YL3B gives additional cost of Yali after YL3T is complete.3 Son La 11,2 includes the cost of the dam and EHV system. Subsequent costs for units 3-12 are primarily electro-mechanical plant ~'4 O/L year gives earliest date station on line taking into account present stage of project preparation

*0'

TECHNICAL CHARACTERSTICS USED FOR COST EVALUATION OF PROPOSED VIET NM HYDRO POWER PROJECT

VIETNAM H#ww oYDF PFAoECTB - NH FMATWlES - data nol avan o app&uabb) SLaUn PAW. 91

t 1 DESCRIPM Ilen "cash VIbm 80n Swa im vY Phi Ham Dami t1wg N Sa a Do ba Ma sum PO son An KM Thac MOICiang Thun w Qu) m c) t

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TECHNICAL CHARACTERSTICS USED FOR COST EVALUATION OF PIOPOSED VIET NAM HyDRO POWER PROJECT

IETNAM HMIfO 9V PRAECTs - MN FEATURES (-dafnol avaIbbb acr xpp%lsbt SU3 NM. 01

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VIETNAM HYDROPOWER PROJECTS - MAIN WORK VOLUiMES AND PRIUMINARY COST ESTIMATE IA-.-.t1

ITB DESCRIPTION Unt IH oBVInSa Si RH$nj YHa m [S ; a1 )| DomONI|DINb h | On |3 ) DNM e N SCa DnL I BD I | B n -' | 6 I am

I I~~~~l- I I o I PotB8Z I mm I CSd@,d) 1 pllZ I" ,MAIN WORK VOLUME -dafeit 0avalabe or PPiNcs)C k wnksERd NWd Rfck ExcavadonEwth ExcaOn IC$ MD 1827 4483 2045 3384 1300 2433 401 2710 477 6035 4427 3600 1300 607 370 3924 361 1310 5U

Open Rock ExcatIon 10p m 9571 260 700 1047 402 1682 204 3234 1426 22784 2006 2510 640 3090 1381 810 026 461 U4

UndrouandEwAvatloa 10'ml 1177 - 30 662 - 226 tSg 610 - 743 671 141 - 63 - 0 1480 so

EuUu and Rock RIN

Eml FMI 10 Ms 3822 2154 3800 7045 1735 4723 264 1164 3066 2570 266 689 GOo 708 160 741 123 4703 7301

Rock FUI IO0 .l 13000 25 44 4857 5081 4465 225S 9140 3656 38046 16086 6163 - 6543 1068 2037 1002 364 16

Onno_SW FBI o) Ms 4480 10 130 481 434 655 144 974 100 253 1289 300 - 341 107 70 74 156 370

Abw,Grouud 10' m' 083 68 120 239 121 6e 33 228 399 1993 1606 282 6oo 12 120 76 30 114 140 I

Undegro d 10' m' 245 - t6 282 - 72 30 100 - 232 165 62 - 22 - - 46 14 -

C4punoGroulnh IO$ m 141 - 16 209 24 102 04 122 a5 184 100 78 - 34 36 11 39 60 10

Hadwolis Pbad T 23000 3346 2518 7685 2455 15327 1338 5530 17198 23220 24930 60M 2671 3382 2051 1048 1514 C645 3760

Ehecld plat T - - - - - - - - - - - - - - - - - - -

CONSTRUCTION COSTOkeGctCodClAWoeke Mio USS 024 s0 71 273 70 151 51 270 178 1161 602 180 134 140 65 67 46 74 110

bud ctCodWndOwrtme 14o1US$ 156 13 18 68 17 38 13 68 44 290 200 45 34 37 14 17 12 19 28

Cainpenles llWS$ 117 9 13 51 13 28 10 61 33 216 160 34 26 27 10 13 9 14 21

TatuCod ClhilWod mIUSS 897 72 102 393 100 217 73 388 265 1660 1162 258 193 210 so 06 00 107 158

Hedwoks Pblit m1 USS 92 13 10 31 10 6s 7 22 60 03 100 24 10 14 10 a 0 22 IS

ERldcal P 1IoUS 202 17 24 110 48 e1 46 00 48 412 340 77 42 89 37 14 19 20 60

Tranu s Jonn 4MIDUS$ 24 132 15 1S 10

Tdl Contrucion Cost MloUS$ 1305 103 130 674 157 330 126 470 372 2169 1607 260 246 313 127 113 92 15S 233 ,

E _s nuan AdMmlgld o US$ 130 10 14 67 16 34 13 47 37 219 101 36 25 31 1S 12 9 16 23 o,

LandCnaselen M1oUSS 235 1 6 35 3 00 628 262 07 5 17 6 40 * * X0 f

CAPITAL COST MIDUs$ 1670 114 156 77 170 372 138 617 476 2936 2296 492 270 403 157 135 101 223 206 t4

UnkCcot US$n(W 870 1720 2341 1109 1433 1241 863 2053 2901 815 057 t967 2560 1100 1934 3002 1680 1924 165l

- 108 -Annez 4.4(d)Page 1 of 1

Hvdroiower Proiect Plannina nd Institutional StrenatheninaConsultants Services - Terms of Reference

Obiectives

1. The objective of the services is: (I) to complete the technical and costreview of the hydropower projects identified and studied by the responsibleVietnamese Institutions; ($i) determine and develop programs for theinvestigation and study of hydropower projects, for inclusion in the least costplanning process; (iii) provide training to the Viet Nam counterpart engineersin methods of compiling and reporting on investigation work; and (iv) identifyrequirements in equipment and training needed to strengthen the technicalcapability of the institutions responsible -for investigations, and design ofhydropower projects.

Scone of Work

2. The technical assistance program will be undertaken by a hydropowerproject planning consultant, and a hydropower project cost consultant who shallcarry out the following activities:

Plannina Consultant

(a) Complete the technical review of the hydropower project developmentsidentified by the Bank Mission, from the studies prepared by the Institute ofEnergy, the three Power Companies and the two Power Investigation Companies.

(b) Review the hydrological, geological, and topographical data base fromwhich the studies have been made.

(c) Review the present procedures and practices in identification, studiesand development of projects, and develop, record and prioritized an appropriateprogram of investigation. In the course of the review provide training tocounterpart engineers and planners engaged in the work.

(d) Identify requirements for strengthening the technical capability of theresponsible institutions

Cost Consultant

(e) Complete the review of the projects with particular attention toestimates for quantities of works, method of construction, provision for accessand its affects on rates.

(f) Investigate the basis of construction cost estimating in Viet Nam, andderive appropriate unit rates for use in cost estimation.

(g) Establish a data base with cost estimating information, train counterpartpersonnel in its use and update estimates for use in power planning.

LEVEUSED COSTS, FUEL USAGE, AND EFFICIENCY CHARACTERISTICS OF ALTERNATIVE GENERATING PLANT

Standard Pant ChaacteristIcs Fuel Oi - Steam Tui I Low SpeedDVau UnRt Va Uni Vlu Unit

Plult I 0 MW 0 LF GM FuON 24 SSW &36 $on s 67 iU89sgPedod S700 hr 3 SOd 167 cIMkl 16 en O6. VWOua 110% FORM Mki s0 dlyr U e a 2070 BWd 113 MIgtV 363 oa

WIAlyb 06% Heat Vd 1.532 MkCaM 0.14 M8TUgAl 40 MMProduct * 473 GWNi* * 1200 MWhhd Tol Hea * 1162 G6IRC.lI 107 kTOEyr 465 TJIyrInt_ 12% yeas 20 7.47 PWF ENy 36.00%

H Pat - 2457 kCaUkWh O61 BTUkWI 10271 kIc8FC a 0.07 Oalkb 0.3 UkWh 0.24 k&wh

Gas - Gastrbine Combbed Cycle team Turbin- Fu Coot a 1.21 M* 6% Tat MS 1ea PWM*FbidOUO 0.66 $iWhdih 0.71 MSv 6 PWM

Va Units Val Unit Va Units VubOM 4.05 MWH 1.2 M8b, 14 PWM$GU l.a9 *mCF a 385 chn'3 Conhhc 1100 SkW 3 Yr 12% IDC

* 41 ot al a 18.01 SWJ PlaCot - s .8 * 1.16 we0 114.0 PWMSUsa" * 6274 xCFId * &3. BtOfW - 95.0 Mm-3v Enrgy 0 - 8.43 c)kWhHatVat 0.2n MICSaAnO a 1004 UTUCF . 2906S MJ/m3Tod HNet a NO GkOaf1r a 70 IkTOEIW - 3500 TJtyr Dsel - Meim Speed Des IG asT Turb esEffy 47.0 Va Unit Va Uli Va UniNWt RAt 1611 kCad:kWh * 456 BTUkWh * 7676 IcJhWh Diou 31.6 SSWbl 4.19 SIcnb 75 dUSgalSFC I 7.16e CFikWI a 0.20 m'MkWh . 2153 IMkCa 10 CA 90.00 c16JFusl Coat * 3.e0 MW a 2g% Tat MS - 31 PWM$ Usa" 3047 IM 166 oer" m gaBS3rFind OW 0.4 SAWhath a 0.43 W a 3 PWM8 Heat Val 1.483 MkCIOBbl 0.14 MBTWga 381 WiVaublOSM 1.6 8IMWh * 0.71 MWr w 5 PWM$ Ted Hea 1027 GkCatlr 150 kTOEyr 6802 TJJ)TConouct 600 SAW 0 3 Ve 0 12% icC Efy 25.00%PlntCeo * 72 . * 1.16 IDC * 83.6 PW MS Het Rate a 3440 kCaUkWh 67 BTUkWh 14303 kJlkWhEnfrgy* 0 3.48 olkWh SFC a 0.090 gallWh 0.37 tikh 0.33 kgJkwh

Fue Cost * 35.04 MfW 84% Tat 4 MS 310 PW MSCoal - Steam Turwbine Generation Fixd OW 0.66 SkWhwo* 0.71 MW 6 PNWMS

Valu Unib V Unite Value Unts VabIOM 4.05 hIWh 1.02 MW 14 PWMSCoal 17 $orn. - 18.74 SAon * 0.64 cdb Contruct 60 $#kW 2 Yr. 12% [DC

* 300 ciMkCd * 12.92 SW Pbnt Cost - 54.8 * 1.12 IDC 60.6 PW MSUsg * 611 tonneld a 26 kbonne 74304 betr Energy@ * 11.04 clkWhHeat Vat S50 kCa a 020 STUlb - 22960 kikgTed Ha * 1627 GkCallr a 150 kTOJF * 6802 TJIr Hydro Power Station-Emy 25.00% Value Units Vaue Unis Ve UiteHet Rate a 3440 kCaIWh a 667 BTU1kWh * 14M kJIkWh Water 0 c1kWhSFC * 0.03 kg1kWh - 1.3 tbwh Ut_tm 40 Yers Fud Cost * 6.03 M * 5%8 TatMS * 42 PWMS Fuel Coat = 0.00 MW 8.24 PWF 0 PWM Fted ObM 0.4 1kWhn/th - 0.43 MW - 3 PWM$ Fa ed OaM 0.C5 SkWhnth 0.69 MWt 4.44 PWM$ XVarb ObM 2.0 $1MWh a 1.23 M T - 0 pIN M8 Vaubl O&M 0 SIWh 0.00 MWr 0.00 PWMWConstuct 166 $kW @ 4 Ytr 12% IDC ConFnct 862 SAkW 6 Yr 12% MCCPlanCoat * 14.4 .r4 ' 1.20 IDC * 18.0 PWMS PantCodt a 77.58 .8 * 1.25 DCC 07.8 PWM$Energy 0 w 2.06 chWh Energy@ . 2.62 ckWh lb

- 110 -

Annex 4.6

Least Cost Plannina With An SEV Interconnection In Viet Ham

Backa=onSd

1 The government of Vietnam is constructing a 1400 km, 500 kV transmissionline to interconnect the three power systems in the north, central and southernareas of the country. Its completion by 1994, has high priority, so that thesurplus hydro and coal fired generating capacity in the north can be utilizedto supply the south, which is suffering frequent disruptions to supplyparticularly during the dry season. The current cost estimate to complete thellne are around US$ 500 million, much of which li expected to be financedlocally. Construction work on the transmission line is under way, and the lineis expected to be in service by 1994. If this major project can be completed asplanned it wlll be an impressive undertaking; indeed by February 1993, 90% ofthe foundatlons had been completed, and contracts for some USS 300 million ofequipment supply had been signed. The following comments indicate the Bank'sobservations with regard to system planning considerations after the line L inoperation, giving recommendations to optimize the use of the investment.

2 The concept of the Extra hlgh Voltage (EHV) line is based on in-housestudy of the techno-economic considerations performed by the Institute ofEnergy ln their 1990 report'. Detailed technical studies of the performance ofthe line have also been carried out by the consultants Nippon Koie of Japan inSeptember 1992, to determine basLc design parameters for ordering equlpment.Subsequently, PPI/S8CVI (a joint venture by the consulting arms of the twopower utilities in New South Wales and Victoria, Australia) has been contractedto revlew the design studies, and to supervise the principal contract for thesupply of substations, including series and parallel reactive compensationequipment by Merlin GerLn of France. PPI/SECVI'E prelimlnary conclusion fromits own smulation studies, baaed on conservative assumptions about powersystem data, is that the llne should be able to transfer 500 MW from Hoa Binhto Phu Lam coincident with 160 MW to Da Nang provided appropriate attention ispaid to the detailed design of the system, it. controls and the method ofoperation.

3 After commiosLaning and for the rest of thli decade, this single circuitEHV line is intended to provide bulk transfer capacity from north to south.About 1998, the 700 MW Yall hydro power station when commissioned, is expectedto improve system operation. By international standards the planned line isvery long, and its transfer capability close to the practlcal limits of design.It will require substantial series (800 NVAr) and parallel (1000 MVAr)compensation equipment to ensure successful operation. During startupoperations, involvlng line charging for synchronLzatLon (while commLssioning,and each time after system wlde power failures), and durlng routine operation,the 500 kV ENV system will require skilled operators using sophisticatedcommunications and control systems. At all times the respective northern andsouthern 500 kV and 230 kV systems, will require close monltoring to maintainsafe voltage and eystem power factor limits, taking lnto account disruptionsdue to equipment failure, load shedding, and human errorl along wlth theinevitable inclemental envlronmental conditions likely to affect the line overits 1400 km route.

KWV Dpesin Coneiderations

4 The prlncipal concern to the ERV system designers relates to the prospectof system-wLde blackouts due tos (i; the (as yet unconfirmed) response of theexcLtation and control systems of the major interconnected power stations(where data was unavailable for the earlier detailed studles). The stations of

I Feasibility Study of Zstra 11gh Voltage Overhead Transmlsslon Line. Banol 1991. Report preparedby the Power D"is. mi IestiLgatLon Company No. 1 le the NinistrY of Enner.

- 111 -

Annez 4.6

particular concern Lnclude Hoah BLnh (8*240 MW), Pha Lal (4*110 MW), TSl An(4*100 MW), and Thu Duo (2*66 MW) whore unit instabliLty could result ln systemcollapse; (LL) the effect of di$connection of a large southern generatlng unit(ln particular TrL An) which could glve rlie to voltage collapse, andconsequentially system collapse, due to the lack of reactive power under highload conditionu; (iLi) the consequences of voltage rise along the line due toautomatic or manual operation of the 500 kV circult breakers dieconnectinggeneration at the receivirg end of the line; (iv) the prospect of sub-synchronous resonance of the serLes compensation scheme (affecting thetorsional stress on the Hoah Blnh turbo-generator shaft); and (v) theconsequences of switchLng surges due to sLngle phase auto-reclosing. Thesoproblems are of course well recognlzed for EHV systems but deserve greaterattention due to the unusually long length of the line. However it should alsobe recognized that each item of compensation or protective equipment sorequLred, adds a further complicatLon to the overall system design, therebylntroduclng a source of potential failure.

Medium and Lona 2erm Generation 3xoansion PlannLno Considerations

S Given the problems that could arise in system operation with the 500 kVline in service, near to medlum term planning should be focussed on Lmprovingoverall power system reliability. In particular it will be advieable to takethe following steps in each regions (i) revlew the need for strengthening theunderlying 230 kV systems, together with the asseciated sub-transmisoionsystems; (iL) review relay protectlon and control facilities and plan acomprehensive system of under-frequency load shedding facilities on all majorsubstations; (iLi) improve protectLon and control systems, to reduce the numberof forced outages; (lv) improve communications and control system to minimizethe misunderstandings by operators under adverse operation situations; (v) andundertake comprehensLve training program to enhance operator capability inemergency situations.

6 Long term planning for goneration expansion needs to take into account thetimlng, capacity and cost of upgrading the EV link sometime after 2005, whenthe first unit of the 3,600 MW Son La scheme is expected to be commissioned. Bythat time, total system generatlon capaclty would be about 6000 MW, rising toabout 10,000 MV by 2010, and a stronger tie would greatly enhance theoperational performance of the power system. For the period 2000 to 2005further increments in thermal and hydro generation would be requlred in bothnorth and south systems to match the respective growth ln each area, withtransfer both ways within the lLmits of the EHV system capacity. After 2005the length of the EHV line will be extended by 300 km, and the transfercapacity increased to 3000 MW to supply the south wlth power from planned newhydro (3600 MW) and coal fired thermal (1200 MW) in the north. Alternative waysof meeting the load transfer requirements will need to be investigated,including the use of HVDC, and/or a staged development of the 500 kV systm.

- 112-

Annex 4.7

Summarv of ENPEP Expansion Scenarios Page 1 of 5

Assumptions

1 During the course of this study, a number of scenarios were examined toidentify the least cost power generation development in Vietnam. Based ondiscussions in Hanoi in February 1993, results of four of the studies arepresented herein, indicating the most likely development options based on thecurrent situation. These describe least cost plans under low and high gasconditions, coupled with the lower and higher load demand forecasts given inAnnex 1.18.

2 The low gas situation ib based on the delivery of enough gas to runexisting plant, but insufficient to commit new thermal plant. Existing southernthermal plants, including the new GTs at Baria and Thu Duc (fitted with heatrecovery/thermal generation facilities) will use gas, oil or diesel asappropriate if gas is unavailable. The high gas situation is based on thedelivery of 2 BCM of gas to Baria and Thu Duc by 1995. In both cases newmultifuel thermal units (200 MW) or new combined cycle plants (360 MW) areconsidered to be available for selection at the PHu My site. It is assumed thatif a thermal plant is selected before 2000, it would be of the multifuel variety,to cater for the uncertainties of a regular gas supply. On the other hand if itis selected after 2000, it would be P combined cycle plant probably based on a"take or pay" contract to ensure gas supplies are efficiently used.

3 Of necessity various assumptions were made in the ENPEP model, where datais unavailable, or to simplify the analysis. The principal assumptions, asdescribed below, need to be investigated in more detail in further studies.

(i) The basic assumptions with regard to the costing, performance andefficiency of existing hydro plant data used are listed in Annexes 4.3(b) and4.4((b). Generating plant assumed to be committed includes: (i) in the north,Hoah Binh #7,8 and the rehabilitation of the 440 MW Pha Lai plant will becompleted by 1995; (ii) in the south (a) the four new 37.5 MW gas turbines at ThuDuc (2) and Baria (2), will be upgraded to combined cycle capability by 1995, and(b) Thac Mo, Vin Song, and Song Hinh will be completed during 1994-1996; (iii)the 500 kV, 500 MW capacity transmission line will be in service in 1995 (referAnnex 4.7).

(ii) Because of the costs of hydro construction used in the study are onthe low side, hydro production is expected to play a dominant role in all leastcost development scenarios (see table 1). However output from hydro plant in theENPEP model is based on average annual rainfall patterns, and therefore therespective probabilities of wet and dry year forecasts need to be established toreduce the risk of over commitment in hydro resources. New plant options in thesouth include a selection of hydro choices available (Yali, Ham Thuan,Can DonPlie Krong, Dami and Dong Nai - total 902 MW); in the north Son La (3600MW).Construction and operating details of the plants are also given in Annex 4.4.

(iii) The ENPEP model considers all generation expansion options, on thebasis of a common transmission interconnection system, the costs of which areexcluded from the comparative analysis. During ENPEP's simulation process, inallocating generation for example there is no recognition of constraints in thetransmission system, (e.g. in the 230 kV system between He Chi Min and Can Tho)and assumes the most efficient power source will be used first. To take thislimitation into account in simulating the role of the 500 kV line, it isnecessary to perform several iterations (of least cost plans), each time ensuringgeneration selection is such that the difference in surpluses in the north andsouth regions falls within the existing 500 kV transfer capacity limit. Thisconstraint is maintained until such time as the ENPEP model shows extra capacityin the north, inclusive of the incremental cost of construction or reinforcementof a new EHV line, is the least cost plan. For most scenarios under consideration

- 113 - 113 - Annex 4.7Page 2 of 5

this occurs when the first units of Son La are commissioned about 2005.

Cave Studies

4 Case 30 represents the lower load scenario where gas supplies are limited.After 1994 supply to the south, from the Hoa Binh and the (rehabilitated) Pha Laistationa in the north, will be limited by the EHV system to 500 MW. New plantoptlons in the south include a selection of hydro choices available in the south,the proposed 56 MW thermal plant at Baria, and 200 MW coal fired station(possibly at Can Tho), or 200 MW multifuel units at Phu My in the south. optionsin the north include a 220 MW extension at Pha Lai#1,2, and development of theQuang Ninh#1-8 site in 200 MW unit sizes. The principal conclusions frc theresulting least cost plan given in Annex 4.7(a) indicates: (i) rehab$litation ofthe Uong Bi or Ninh Binh plants is not necessary; (ii) coal plant expansion after2000 is very competitive with the expansion of hydro; and (iii) based on currentcosts of the new EHV line, lt appears better to build new coal fired plants inthe south, rather than expand the minemouth capacity in the north and increasethe transfer capacity o the EHV line.

5 Case 35 represents the equivalent higher load scenario where gas suppliesare limited; existing and committed thermal plant in the south can be expectedto operate as for case 30. Likewise options for new plant are the same as forcase 30, and the constraints of the committed 500 kV system will also applyuntll about 2005. In this case with reference to Annex 4.7(a), it can beconcluded that (i) with additional support from Ninh Binh and Uong Bi, the nextmajor stage of expansion should take place at Yali in 1998; (ii) the development5600 MW of coal fired capacity in the north and the south, together withexpansion of the 902 MW hydro projects in the south from 2000; (iii) the Son Laproject should be brought into service about 2007.

6 Case 32 represents the lower load scenario when up to 2 BCM of gas will beavailable by 1995, necessitating the changeover of all existing southern thermalplant to gas firing, and planning for future extensions in the south usingcombined cycle technology. In this case it can be concluded from the least costinvestment plan given in Annex 4.7(b) that (i) Yali is still the optimum choicefor the first major investment in plant; (it) it is not necessary to install thefirst major combined cycle plant until 2003; (iii) subsequent additions of coalf'red plant at Pha lai are needed in 2004 and 2006 to maintain the balance ofpower in the EHV system; (iv) after 2003 there will be a net transfer of powerfrom south to north until 2006, when the first stage of Son La comes intoservice.

7 Case 37 also represents the higher load scenario when up to 2 SCM of gaswill be available by 1995, as for case 32, necessitating early changeover ofexieting southern thermal plant to gas firing. In this situation planning forfuture extensions in the south would be based on the use of a thermal powerstation capable of multi-fuel operation if the gas production is not provenbefore 1997. Otherwise combined cycle technology would be used until gas suppliesare exhausted, after which time coal supplLes will be needed. It can be concludedas before from Annex 4.7 (b): (i) the Yali station should be advanced to 1998;(ii) expansion of 1080 MW of combined cycle capacityl would take place form 2000-2003, matched by coal fired capacity in the north; (iii) the EHV line needs tobe planned for commissioning about 2003 initially to supply the north from thesouth.

Generation Production and Fuel Usace

8 A comparative summary of the respective generation outputs under eachscenario is given in Table 1. As noted above this shows the significant part

I A mix of conventional gas/oil and combined cycle plants should beconsidered in practice to provide a margin of safety against uncertainties in thesupply of associated gas.

- 14- Annex 4.7Page 3 of 5

played by hydro in the earlier years, gradually supplemented by gas and coal. Infact annual hydra production will tend to vary between wet and dry years, andconsqently oil and gas usaqe is expected to increase. Under the high gassituation gas usage does not reach peak capacity until after 2000, although thereis considerable capacity thermal plant (and gas supplies) available to cover thedry years. The figures however represent optimum usage from a minimum costviewpoint assuming it is better to use gas elsewhere, or if necessary flare it,rather than to spill water. In reality gas supplies would probably be based ona "take or pay" contract, and accordingly show a more constant annual use. In allscenarios coal production remains under a million tonnes, i.e. within theexisting capacity of the coal mines until 2000. Under the two low gas scenarios,coal usage increases to about 6 million tons/year by 2010 in the north, with aslower buildup to between 1-4 million tons per year in the south depending ondemand. It is notable that on the basis of present costs, under case 30, it ispreferable to build more coal plants rather than advance the Son La scheme.Although the resulting data is useful to give an indication of high, and low coalusage scenarios, it demonstrates further studies need to be undertaken to examinethe sensitivity of the results to the assumption used.

- 115- Annex 4.7Table I Page 4 of 5

Summary of Energy Producton and Fuel Use(excudes diese used In solated generating unis)

Year Base Casn 30 - Low gs --- -------- CsCe 32 - High Gas Demand hydro Oil GMs Coal Coaw hydro CHI Gas Coa Coa

GWh GWh B0L 8CM Uy tUy GWh BBL CM tty Uty(000) (nth) (SUh) (000) (nth) (Sth)

1993 1065S 70% 3705 0.6 3.0 70% 3706 0.6 0.01994 11691 82% 3293 0.00 0.2 0.0 02% 3293 0.00 0.2 0.01995 12434 86% 2045 0.05 0.2 0.0 86% 2045 0.04 0.3 0.0196 13345 92% 63 0.15 0.3 0.0 92% 63 0.13 0.3 0.01997 14308 87% 49 0.31 0.4 0.0 87% 47 0.30 0.5 0.01998 15345 83% 0 0.48 0.6 0.0 83% 0 0.48 0.6 0.01999 16460 77% 361 0.59 0.9 0.0 77% 328 0.58 0.9 0.02000 17659 82% 203 0.47 0.8 0.0 82% 201 0.46 0.8 0.02001 18951 85% 95 0.42 0.7 0.0 SS% 95 0.42 0.7 0.02002 20340 80% 136 0.64 1.0 0.0 80% 134 0.59 1.1 0.02003 21836 74% 157 0.51 1.9 0.0 74% 168 1.09 0.8 0.02004 23454 69% 154 0.45 2.7 0.0 69% 161 1.21 1.4 0.02005 25242 71% 177 0.26 2.9 0.0 71% 177 1.36 1.0 0.02006 27171 69% 0 0.23 3.5 0.0 69% 2 1.43 1.4 0.02007 29245 64% 0 0.27 3.9 0.4 64% 0 1.97 1.4 0.02008 31506 60% 0 0.39 4.3 0.9 84% 0 0.79 1.0 0.02009 33949 55% 0 0.38 5.4 0.9 87% 0 0.72 0.9 0.02010 36589 S1% 0 0.40 5.9 1.5 88% 0 0.71 0.8 0.0

Total 199-1995 9043 0.05 1.0 0.0 9044 0.04 1.1 0.01996-2000 676 2.01 3.0 0.0 640 1.95 3.1 0.02001-2005 542 2.O 6.4 0.0 546 3.30 4.1 0.0200-2010 0 1.68 22.9 3.8 2 5.62 5.4 0.0

Year High Case35-LowGas-------- Case37-High Gas-----Demand hydro 011 Gas Coal Coal hydro OCl Gas Coal Coal

GWh GWh BBL SCM tUy IVY GWh BBL BCM tUy tUy(000) (nth) (8th) (000) (nth) (8th)

1993 11427 68% 3892 0.8 0.0 68% 3893 0.8 0.01994 12608 78% 3634 0.07 0.4 0.0 78% 3634 0.08 0.3 0.01995 13736 81% 2136 0.21 0.5 0.0 81% 2136 0.22 0.4 0.01996 15104 84% 143 0.41 0.6 0.0 84% 182 0.42 0.5 0.01997 16577 77% 85 0.60 1.0 0.0 77% 865 0.61 1.0 0.01998 1820 79% 0 0.S7 1.0 0.0 79% 0 0.S7 1.0 0.01999 19995 81% 385 0.55 1.0 0.0 81% 386 O.SS 0.9 0.02000 21974 74% 315 0.59 1.8 0.0 74% 311 1.09 0.8 0.02001 24168 67% 189 0.69 2.5 0.3 67% 165 1.73 0.7 0.02002 26570 61% 171 0.59 3.4 0.6 61% 169 2.35 0.6 0.02003 29234 64% 191 0.59 3.4 0.6 62% 193 2.38 1.0 0.02004 32189 58% 187 0.59 4.6 0.7 56% 195 2.68 1.9 0.02005 35S19 53% 46 0.40 S.S 1.5 56% 38 2.16 3.2 0.02006 39210 51% 45 0.40 5.6 26 67% 23 1.48 3.2 0.02007 43289 68% 15 0.33 4.6 1.1 686 18 1.70 3.2 0.02008 47843 62% 17 0.34 5.4 2.4 62% 22 2.46 3.3 0.72009 52898 68% 4 0.40 5.4 1.7 68% 0 2.00 3.2 0.92010 58509 61% 3 0.40 6.0 3.6 61% 0 2.17 4.5 1.8

Total 1993-1995 9662 0.29 1.6 0.0 9663 0.30 1.6 0.01996-2000 928 2.70 5.4 0.0 964 3.25 4.3 0.02001-2005 738 2.37 13.9 2.2 742 9.33 4.3 0.02006-2010 83 1.88 27.0 11.4 63 9.80 17.5 3.3

- 116-

Table 2 Annex 4.7Page 5 of 5

GWh GeneratedlTransfered for Case 32 Scenario 1, Lower Load Demand 2 BCM Gas

Year Lower PC1 North PC2 South PCS CentralDernand Gen In From Gen In Frorn Gen In From

GWh Reglon EHV Region EHV Region EHV

1993 1085S 6020 -32 4499 -325 340 3521994 11691 6932 -508 4183 342 577 1641995 12434 8210 -1469 3993 913 232 5531996 13345 8879 -1697 3932 1387 534 3081997 14308 9384 -1731 4391 1361 634 3681998 1534S 9888 -1732 4923 1298 534 4321999 16460 10499 -1804 5427 1302 534 5012000 17659 10274 -1004 5101 2178 2284 -11752001 18951 10010 -124 4911 2964 4034 -28462002 20340 10885 -340 5421 3100 4034 -27612003 21836 10314 935 7487 1734 4034 -26702004 23454 11468 535 7952 2028 4034 -25642005 25242 10309 2500 10905 -39 4034 -24682006 27171 11475 2197 11663 168 4034 -23662007 29245 11379 3217 13832 -950 4034 -22682008 31506 17152 -1568 10320 3709 4034 -21422009 33949 19861 -3219 10047 5231 4034 -20062010 36589 22580 -4805 9975 6666 4034 -18612011 39442 25401 -6414. 10011 e115 4034 -17052012 42547 28335 -8049 10163 9582 4034 -1540

GWh Generated/Transtered for Case 37 Scenarlo 2, Higher Load demand 2 BCM Gas

Year High PCI North PC2 South PC3 CentralDemand Gen In From Gen In From Gen In From

GWh Region EHV Region E-IV Region EHV

1993 11427 6486 -139 4609 -251 332 3901994 12608 7483 -492 4895 -66 232 5581995 13736 8586 -1053 4924 429 232 6241996 15104 9777 -1534 4798 1137 534 3971997 16577 10659 -1657 5385 1178 534 4781998 18203 10692 -857 5227 2035 2284 -11791999 19995 10570 180 5392 2646 4034 -28272000 21974 10343 1412 7597 1303 4034 -27152001 24158 10057 2802 10067 -209 4034 -25932002 26570 9958 4115 12577 -1653 4034 -24622003 29234 10730 4676 14477 -2368 4034 -23082004 32189 11689 4984 16273 -2846 4034 -21382005 35519 15676 2810 15809 -827 4034 -19832006 39210 22070 -1809 13106 3615 4034 -18062007 43289 25285 -3071 13970 4699 4034 -16282008 47843 25321 -957 18488 2361 4034 -14042009 52898 31710 -4978 17153 6139 4034 -11602010 58509 34610 -5270 19865 6164 4034 -8942011 64741 38832 -6619 21876 7220 4034 -6022012 71664 46564 -11184 21066 11467 4034 -282

AnneX 4.8 (a)Page 1 of1RECOMMENDED GENERATION EXPANSION SCENARIOS FOR BASE/HIGH LOAD. LIMITED GAS

Case 30 Scenario I Low Demand - EHV 1994. Llmed Gas Case 35 Soenaro 2 HIge Demand - BiV 1994. Limited GasYw _mid Iblu PCt Xs FM Xn _ TOW Des SW Yew .ad bee P Xs PMIN Xs h> Ti ma ONNW NW NW MW 36 vd MW Mw NW NW % IdE

CT.? nIDO^,TBOB,CrOI.TDO T X39 S06 a3 swi 18fi60 CreT.TDa^,TDO9^CToe.102,1DGT, T I303 308 303 MW102 t*1 Ho.l1 h.ThaeB; TdM.OIe@ 8l2 860 138160 t1 4% ltC 19 Hoekth.Thee 9i Tden.L%M 62 860 1M38 161 10%109 1831 Ph. Li 440 440 2131 23% 1992 1530 I'aLA,U WI.1fhthW1 WY07 6s7 2196 30%am *77 -- Oew end IIW 1268 816 8 240 2131 17% 18 678 *In ea d e 92 1338 383 6 6 4 24 298 24%19a am Ho h9n 6lb8 1968 00 M 172 73A 2851 a 109 I67N HoM Ohb#4.6 208 1015 883 172 72 20t8 42%1094 10w2 91s.c-C 2861 32% la$ 166 9CC-0 2118 38%1994 162 HohB r7.h;rTH2Mv0HV 246 1331 118e 411 808 3868 47% S20 190 18 H ukIh f s;UlM@sVlH3 2836 139 118 411 86 3728 80% 087In$ 207 687 43% 1996 204 O7 44%IM6 2078 ThuDuoC1 26e 1281 120 420 teo 378 46% 830 190 2064 ThuDuoCC-ih 2838 131t 12 420 199 3824 46% 67amu 2u 37b7 41% Im 2293 324 40%aIN 236 OongHhtb 268 1170 1386 407 68 3823 42% 7e3 MaM 22u Son9Hehh 2838 1237 13tb 40? 6 3800 41% 8s"a7 2404 3823 37% 107 2630 3690 36%I97 240$ 2468 I8 1386 323 0 3828 37% 761 197 2630 263s 1181 1366 323 0 3890 36% 82Iam 287 38 32% SW08 278 38 28%In$ 2887 2888 0Ot 1368 231 a 3s23 32% 780 Im 2786 VY 8n.2 2535 106s 1706 881 360 4260 34% 477aM 279 3s8a 27% 1990 S06 4260 28%am 2788 268 9 01305 102 0 3sa 27% 732 Ms aD V Y.834 263 X00 208S 832 360 4690 33% 1292000 209 a lcu Soft 40 3m76 20% 20O0 3383 Con Ub BueW Ike -6 4830 25%2000 209 Yl 91.2 2668 768 1S6 301 360 4113 27% 478 2000 3883 Omig Iht 2735 t06S IN0 6 20 4730 28% 3922001 a2 4113 22% 2001 8729 470 21%2aol 3227 YVi 94 2668 676 IM 848 86 4463 2% 131 201 3a720 OM*g Sa 02 Phu Mp 296 1143 218 746 400 8130 27M 3982002 364 4483 22% 2002 4113 5130 20%2002 3664 2466 866 IM 427 0 4468 223% 10 2082 4113 PbaldI.2 PhuMyCd 3186 1263 2208 32 420 688 20% 4172003 3718 4463 17% 3003 4a4 8660 1%2003 371t Phi Ll WI. aumg 1MI 27 740 aM 208 310 4773 22% 442 2003 4624 Hwn Thaus. Cer Dan.F19 Kiang 3188 1117 048 1343 86 GM0 27% 232004 s0 EHf ene 4m 16% 2004 4078 out OM0 20%2004 309 Pha L 2 mo OM 3 010 1U0 180- 310 G083 21% 7M 2004 4078 aw a %4,4 h U3 368 1377 326 1410 600 8300 273 -W32N00 4301 Th. Doc AB A cT02 mdre -243 440 11% 208 6482 n De &C002 .. -2 o687 18%2008 4301 Caw.g N 3 32e8 8 N 22362 247 0 8830 22% 717 2008 G682 on" Me PS My a7Ms am 3002 1607 80 725? 25% 362008 46W Hun Thuin Cm Don Pe Keaa 8630 20e0 6040 9f 8hebaUned 7387 18%2N00 4830 a g W 4 od 3648 1000 2402 224 300 6890 21% 776 2m4 6 Phu U7,8 Me Nd 376 127 4132 19S9 660 7917 24% -7172M00 4084 6690 16% 2007 67 797 16%207 4984 PhuMCta .2 3468 841 2602 443 400 0299 21% 398 2007 68s La 01,,4. 86 6

6668 3076 4132 1D3 18S0 9717 31% 12742008 6310 3290 16% 2808 7374 0717 24%0 6370 Fth up CoM4 33 661 302 O6 400 660 20% 28 200 7374 s6 2m 4132 IM66 0 0717 24% 11232000 6780 689 1% 2000 8151 EWIvYdgedto 30 w 9717 13 I >-2009 6780 Omg 1he 3868 OR7 3202 409 400 7000 18% 4e8 200 8161 sOn LAI 7.8.0.10 876 328 412 130 1200 10017 25% 2660 lb t2010 823 7090 12% 2010 9918 10017 17% aD >2010 62M Phup ey 6 386 682 3802 863 400 74S0 17% lOD 2010 9013 0a1u t&l86 Phu myCcS-il 69M6 3729 4782 123 80e 11717 23% 20072011 6728 7490 10% 2011 9070 11717 16%2011 6M Ong NhdS70Dngd 4038 641 384 60 482 7042 16% es 201 0070 QwngOM.I0 Son Udll.12 7366 308 862 2254 1200 12017 23% 186$ o2012 723. 7042 0% 2012 11032 12017 16% 'h 02012 723Z wgtngNkSPhvUM7.8 4288 623 4254 6ON eso OM2 16% -43 2012 110t 2 OCmg tnh#O-l3.Phu CoW2.l e166 402 6ss2 2374 12C0 14117 22% 285-

Totd 0428 4254 8u6 Av 24% ToWl -03 81o6 8082 14420 A 27%

Annex 4.8 (b)Page 1 of 1

RECOMMENDED GENERATION EXPANSION SCENARIOS FOR BASEIHIGH LOAD HIGH GAS

CaSe 32 SCenarIo I LOWe DeMand - EH 1994.2 BCM Gas 1995 Case 37 SceonadIo 2 HIghe Demand - BHV 1994,2 BCM Gas 1995yew mim 04*. PC Xs PCU3 Xe hel TOWd RNe SW %lew emom RN". P Xe PM Xe he Totlf %Ie ON

MW mw VW MW Ye dmuw MW NW MW MW Y VON

IM8 1880 C0Tf.=0ATDO6.C02,1UQ.R 30 303 303 1981 1880 Crffr,IDoATO00,Cr02.T`ST.WAS 303 30 =301932 1831 "Co e OibThoOK Tua.04 2 680 I38 1891 4% 190 lo 18O0ngaBk,The OK Ifdsi.wU1 82 66 1386 1881 13%1IM 1831 Ph& LA.Uaag Onl 488 48 2178 28% 193 1830 PhaLJW o O91Wl 488 488 2178 30%199 1772.. SMOIilMn@en 10922 1313 38 88M 244 2178 19% IM9 1878 "' StuelIn Oee 1992 1313 381 M 244 2178 23%IM9 1772 H"Deb Sn 48,8.6 2033 903 88 172 720 2868 39% 1983 187 Hah SIV 14.6.8 2033 993 88 172 720 288 42%199 I93 smie C-C 288 33% Is"4188 Rals C-C 209938%1984 193 Haush1A 0kh7. TMH2.WH3 2613 1378 1189 411 808 370 48% 08 1994 I88 HoahB 14s7.8 TUM)2V01 2513 I37 1189 411 806 3702 80% 08199 2078 3792 44% 1m962084 373 44%1996 2078 Thu Duo C-WI 2813 1288 1280 420 100 3802 48% 818 IM8 2884 This Duo C-(VI 2813 1288 1289 420 100 3802 46% 8P81998 2238 3802 41% IM0 2293 3902 40%1098236 Sang PlIn 2513 1216 1388 407 03 3868 42% 806 IM0 2293 Song Hkh 2513 1216 1388 407 88 3888 41% 80109 2404 3888 38% 1997 2830 3868 38%199 2404 2513 1120 1386 328 0 388 38% 808 199 2830 2813 1139 1388 3OM 0 3888 36% 898IM0 2587 3888 33% I9ON 2786 3888 28%199 2887 2513 1036 1386 281 0 3888 3% 808 1986 278 YeN101.2 2513 1036 1708 881 380 4218 34% 488ION 2786 388 28% 1989 3069 EMMA Rnlonnt4218 k-% I199 278 2813 903 1386 132 0 388 28% 80 198 306 YeR304 2513 ON8 28 83 330 4888 33% 1972000 298 Can Tho. Soft 410 3888 21% 2000 3383 Cm Tho. Soft .40 480 28%2000 289 YeEl 0.2 2813 8130 M"4 313 360 4186 28% 820 2900 33M tIeWG-Ol 2813 83 2388 10O3 380 488 31% -190 C2001 3227 4148 22% 2001 372 486623%2001 3227 YOM OU. 2813 721 1986 648 360 480628% 178 2801 3720 N.WC-C2 2613 721 2716 1I0 380 G22 20% -6442002 3464 4808 23% 2002 4113 622 21%2002 346 2813 801 1098 427 0 4808 23% 178 200 4113 N4sC-C9 2813 721 3078 1807 360 888 25% -7882003 3716 EHY Rebmh, eme 4808 18% 20)03 4824 8888 19%2003 8718 tewC.C 2813 478 2888 888 360 4888 24% -183 2003 4624 Ph&L&dUl HganThu.Ceeuws 2123 888 368 180 800 818 27% -123320048898 468 18% 2004 407 PIe Krong 8188 20%2004 398 Ph. LAO 1301 282 446 2368 820 110 407 20% -75 2004 497 Ph. Lid b0 04a19 1bb.2 3130 96 3508 1730 610 68M 28% -7762006 4301 Thu 04.1& CYC2 relke -24 4736 9% 2006 8482 Thu Doc 8 £Cr02*ef -24 6486 l5%203 4301 HesnThuen Own Don POe Kucng 2823 300 2982 037 880 8888 23% -63200 8482 Qien l4IhE Nows 04-04 3333 1010 4094 289 972 7427 20% -10982008 463 Mm C-C 888 17% 2006 6048 Owsi Dong NW 7427 18%209 4630 PMs Lil 1302 Dwri 273 264 3122 964 270 8866 21% -692006 604 GoM 1U.00.24 4533 2064 4094 19% 1200 S62 30% 12007 4984 888 18% 2007 887 88V723%2007 4984 t4ewC-C 273 88 3462 1123 380 8216 20% -1037 200 667 SonLa83. 6133 2486 4004 1738 800 922 28% 781208 887 8216 14% 2006 7374 922 20%2008 8370 Don" NW Son LaI.2,A 3933 1106 3734 1187 1462 78687 30% -41 2006 7374 Phu My C*1.23 5133 2306 4804 2127 600 S82 25% 179 0 2000 678 7667 24% 2000 8181 ow2717% :2009 6780 GMn La 968. 4836 1612 3734 041 MD0 828 30% 671 2098 8151 P1u My CcW4 Son La#7.8.9.10 833 3312 4804 2101 1400 11227 27% 1211 00 32010 623 8287 26% 2010 9013 ON Uprldhg to2O00MW CepedI 10227 20%2010 62 SOn La 87.8 6133 1907 3734 69 800 888 30% 1213 2010 9013 (ieng Nlnh45 Phus My &8.7.8 OM733 507 6694 2865 1200 1242 27% 88 -2811 G72 888 24% 2011 gm7 12427 20% o.2011 672 Oon La 09.10 S73 228 3734 426 600 048 29% 156 .lIl OM7 SanLafll.12 7333 8888 6804 2388 600 13027 23% 1600 m OD2012 7252. 9487 23% 2012 11032 1302 18%2012 7262. 6733 206 3734 148 048 23% 19M 2012 11032 Qiwug NInh66-1I 883 48 68864 2106 1200C 14227 22% 278

.Totd G30 670 73 077 Av 27% TOWd -33 883 680 1430 Av 27%

- 119 -

Annex 4.9(a)

AMORTISED COSTS and LONG RUN MARGINAL COST OF GENERATION PLAN:

Case: 032 All Vietnam Lower Load 2 8CM Gas in 1995 EHV 1994

Interest (Present Wo/Amortlon) 12% Actual Amortlahon TotalsFC LC FC LC Ufe Amort FC LC

GENERATION PROJECTS MW UkW McW US mS m$ Yrs Factor mS mS1 CommItted Projects: 1626 250 250 1992 381.5 381.6 30 0.124 758 710

2PLC1 Pha Lai ST 440 93 23 1994 41.0 10.0 15 0.146 84 19UBC1 Uong BI ST 45 111 56 1994 5.0 2.5 15 0.146 10 5TDOA Thu Duc h&2 132 208 60 1994 27.5 6.6 15 0.146 56 13TDOB Thu Duc #3 33 208 50 1994 6.9 1.7 15 0.146 14 3CTO2 Can Tho ST 33 248 60 1994 &2 2.0 15 0.146 17 4TDGT Thu DucGT 90 188 22 1994 167 2o 15 0.146 *34 4BRGT BariaGT 20 75 25 1994 1.5 0.5 15 0.146 3 1

3 BCC2 Baria C-C 100 480 320 1905 48.0 32.0 25 0.127 80 49BCC2 Thu Duc C-C 100 480 320 1996 48.0 32.0 25 0.127 73 45YL3T Yali #1.2 350 782 138 2000 273.7 48.3 40 0.121 365 64YL3B Yall 03,4 350 782 138 2001 273.7 48.3 40 0.121 332 59NCC2 New C-C 360 408 272 2000 146.9 97.9 25 0.127 150 100PLIB PhaLaiB 110 660 440 2004 72.6 48.4 25 0.127 65 43NCC2 New C-C 360 408 272 2005 146.9 97.9 25 0.127 242 43HTH2 Ham Thuam 300 1054 186 2005 316.2 55.8 40 0.121 230 41CDH2 Can Don 60 1500 250 2005 90.0 15.0 40 0.121 66 11PKH3 PileKrong 130 1164 206 2005 151.3 26.7 40 0.121 110 19DMH2 Dami 160 733 129 2006 117.3 20.6 40 0.121 85 15PL1B Pha Lai B 110 660 440 2006 72.6 48.4 25 0.127 46 31NCC2 New C-C 360 408 272 2007 146.9 97.9 25 0.127 75 50DNH3 Dong Nal 252 1743 308 2008 439.2 77.6 40 0.121 160 28SLIA Son La #1,2 600 2983 850 2008 1789.8 510.0 40 0.121 651 186SLIB Son La#3,4 600 300 60 2008 180.0 36.0 40 0.121 66 13SLiC Son La #5,6 600 300 60 2009 180.0 36.0 40 0.121 44 9SLID Son La #7,8 600 300 60 2010 180.0 38.0 40 0.121 22 4

4 Tot New/Rehabitation Ge 7821 5161 1772 388 1568Base 1992

S Total O&M + Fuel per ENPEP study 1548 Present Value 72Less Energy not Suppiled 13 1991 to 1

6 Operations & Maintenance 1535 2000 2010 70 -1.5

7 PW Increase In Operating Cosos -47 143 70.3 -1.58 PW Generation plus Incrementai operating costs 596 1537 3838 1568

9 PV Increase in GWh 18590 50521

10 LRMC (Capital+ Operations).Generation Costs c/ckWh 3.20 3.0411 SRMC (Average Operatlons) Generation Costs c/kWh -0.25 0.28

Note: Committnd Projects Include: Hoa Binh#4-8,Thac Mo, Vin Song, Song HinUpgrade uf Baria and Thu Duc GTs with heat recoverytturbogeneratorequipment included In Baria, Thu Duc C-C costs

- 120 -

Annex 4.9(b)AMORTISED COSTS and LONG RUN MARGINAL COST OF GENERATION PLAN:

Case: 037 AUl Vietnam Higher Load, EHV 1994, 2BCM Gas aftr 1995

Interest_(PrstWorth/Amortisatlon) 12% Acta Amou_ato ToaFC LC FC LC Ufe Amort FC LC

GENERATION PROJECTS MW #/kW $lkW iUmSm$ mS Yrs Factor ni n41 CommItted Projects, 1526 250 250 1992 381.5 381.5 30 0.124 758 7102 Rehabilitatlon of Thu Duc, Baria.Can Tho 1994 38.7 85 15 0.146 80 16

3 PLC1 Pha Lai ST 440 93 23 1994 41.0 10.0 15 0.146 84 19UBCI Uong i1 ST 45 111 56 1994 .0 2.5 15 0.146 10 5BCC2 Baria C-C 100 480 320 1995 4a0 32.0 25 0.127 80 49BCC2 Thu Duc C-C 100 480 320 199 48.0 32.0 25 0.127 73 45Y1.3T Yail #1,2 350 782 138 1998 273.7 48.3 40 0.121 432 76YL3B Yall #3,4 350 782 138 1999 273.7 483 40 0.121 398 70NCC2 New C-C 360 408 272 2000 148.9 97.9 25 0.127 206 137NCC2 New C-C 360 408 272 2001 146.9 97.9 25 0.127 187 125NCC2 New C-C 360 408 272 2002 146.9 97.9 25 0.127 169 112HTH2 Ham Thuam 300 1054 186 2003 316.2 55.8 40 0.121 307 54C1DH2 Can Don 60 1500 250 2003 90.0 15.0 40 0.121 87 15PKH3 PileKrong 130 1164 205 2003 151.3 26.7 40 0.121 87 15PLIB Pha Lai B 110 660 440 2003 72.6 484 25 0.127 92 15QNC1 Quang Ninh 400 690 460 2004 276.0 184.0 30 0.124 240 160PLIB Pha Lai B 110 660 440 2004 72.6 484 30 0124 63 42ONCI Quang Nlnh 200 690 460 2005 138.0 920 25 0.127 90 16NCC2 New C-C 360 408 272 2005 148.9 97.9 25 0.127 90 16DMH2 Daml 160 733 129 2005 117.3 20.6 40 0.121 85 15DNH3 Dong Nal 252 1743 308 2005 439.2 77.6 30 0.124 87 15SLIA Son La #1,2 600 2983 850 2006 179.8 510.0 40 0.121 1086 309SLIB Son La #3,4 600 300 60 2006 180.0 36.0 40 0.121 109 22SLIC Son La #5,6 600 300 60 2007 180.0 360 40 0.121 131 26PMC2 Phu My Coal 600 750 500 2008 450.0 300.0 30 0.124 67 13SLID Son La #7,8 600 300 60 2009 180.0 36.0 40 0.121 44 9SLIE Son La #9.10 600 300 60 2009 180.0 36.0 40 0.121 44 9PMC2 Phu My Coal 200 750 500 2009 150.0 100.0 25 0.127 46 9ONCI Quang Nlnh 400 690 460 2010 276.0 184.0 40 0.121 22 4PMC2 Phu My Coal 800 750 500 2010 600.0 400.0 40 0.121 22 4

4 Total Generation Costs 11073 7356.1 3161. 5275 2134se 1992

5 Total O&M * Fuel per ENPEP study 2827 Present Value e1Less Energy not Supplied 24 1991 to 3

6 Operations & Maintenance 2803 2000 2010 78 -2.9

7 PW Increase In Operating Costs 5 390 77.6 -2.98 PW Generation plus incremental operating costs 708 2190 5275 2134

9 PV Increase In GWh 27055 80272

10 LRMC (Capital+ Operations) Generation Costs c/kWh 2.62 2.7311 SRMC (Average Operations) Generation Costs c/kWh 0.02 0.49

Note: Committed projects Incluse:Hoh Binh#4-8,Thac Mo.Song HinhUpgrade of Barla and TihuDuc Gts with heat recovery/Aurbo generatorequipment Included In Barla, Thu Duc C-C costs

- 121- Annex 4.10(a)

BSrAW= OF REGIONAL TRANDON AND DIL1RUHRtMON DGrVM NrT BASS COSMSNORTHI RION (PC) - 1992010 - SCMA11O I LOAD PORBCASr

A-NORTHERN REGION 2304V TRANSMISSON SYSTA S-NORTHERN REGION ttOkV T1W ANSMISI8ON SYSTEM$O0 Coot US$000 3000) cog US$000

Qty Unit C a- * Cty Unit FC LC44ax

14+ ANOI-HAIPHONG AREA 230kV TRANSMISSON: 1-STAGE 1 (1Ut2-I16:2SOkVdoubI.oocUlnekm ' 140 180 21420 3730 I OkVJInwa,oa ' 25 100 1876 625280kV sIngle ot1nes.kbn * 200 110 18700 3300 W10kV aStau nbysy 67 200 12060 134093OkVSubsationbays * 34 300 9180 1020 tt01HTrandrmms.1M1VA *826 16 11694 132223=IlOkVTrmnht..MVA * 1625 '10 1425 1i6 Medlumvot 68. bays 221 20 2652 1768110kV'Substationbay * 44 200 7920 U80 C i wowks 0.02 0.02 671 671Cil wouks * 0.02 0.02 1640 148 Bub Total: 29152 5726

Sub Total: 7344 122842-STAGE 2 (1907-2001):

2-NORTHERN PROVINCES 230kVTHANSUI8I5ON: IlOkVJlonesoom 1000 100 75000 25000230kV doublo cc0Unnern 240 110 36720 6480 110kV Substaionbays 98 200 17640 1960230kV "le ctLline.km 61S 110 481S3 84117 0 WkVTransformers.MVA 970 18 13968 1652230kV Substaton bays 19 300 6130 S70 Medium volL SIS, bays 247 20 2964 1976231IltOkVTfansd.. VA 1125 10 10125 1125 Wi works 0.02 0.02 2001 2801110kVSubstatonbays 31 200 8S8 620 Sub Total: 112373 33289CMI works 0.02 0.02 2460 2460

Sub Total: 108163 19762 3-STAGE 3(2002-2000):1 OkVJlna.oo,tkm 1120 100 84000 28000

3-NORTHERN CENTRAL PROVINCES 230kV TRANSISSION: 110kVSuabtaontbay 133 200 23940 266023OkVdoubleoctlin",km 48 1S0 7344 1206 llOkVTranstormed mVA 1390 16 20016 2224230kV n.bt. oainneArnkm 320 110 2920 20 Medium volt. S1. b%ys 364 20 4338 2912230kV Subtation bays 8 300 2180 240 CIv wwks 0.02 0.02 3362 33622311OkVTransn..MVA 378 10 3371 375 SubTotal: 1356S8 3915811OkVSubstationbays 12 200 2160 240Cvii works 0.02 0.02 1048 1048 4-STAGE4(2007-2011):

Sub Total: 46007 879 1 lOkVIines. ocotm 2250 100 168750 66250110V Substation bays 202 200 38380 4040

TOTAL 227688 40488 1IOkVTtaussrlrnenLMVA 1990 10 28686 3164MediumvoL WS. bays 620 20 6240 4160CPi works 0.02 0.02 8153 6153

Sub TOa: 246169 73787

TOTAL 823370 151960C-NORTHERN REGION Dl8TFdlBUTION SYSTEM

U000/ cost U011O00 0O00 Cost USSOO0ty Unit FC LCU x oty Unit PC LCsax

1-STAGE 1 (19962001): 3-TAGE 3 (2002-2006):MV. OIltnmlnllns,km 0600 12 3600 3600 MV. OnHimainina.n 900 12 1620 9180MVtesoflnt * 180 9 240 1380 UVt,kottrnm 270 9 360 2070MV line swtches @n3km 100 3 60 2SW MVUnewltoe3 150 3 70 380OlsL Transforners.MVA t1000 18 GM000 9000 OsLTransorma.MVA 1700 1s 16300 18300LV.aw.ge rsOlV2AVNtdr d 8000 2 i000 8000 LV.sw.esge@I2IkVARdr. 13600 2 13800 13600LV. lineakm 2800 8 11200 11200 LV. _n.ekm 3700 8 14800 14800Domnestn corILconnIrts.000 '142 48 3410 3406 Oomstio conso.nnsto.000 186 48 44e0 4466Indust oon .oonnscts.000 0.5 20 5 5 Indust.ow onLonnects.000 1.1 20 11 11Equipment and cii works 0.028 0.05 1800 3600 Equiges nd MI Wor 0.025 0.05 2800 S500

Sub Total: 330 40441 Sub Total: 53021 65309

2-STAGE 2(1997-2001): 4-STAGE 4 (2007-2011):MV. O/H main ibeSctn 6o0 12 1030 6120 MV. O/H waini nekn 1300 12 2340 13260MVte'tls,Ia 1S0 9 240 1380 MVtseolb,fkm 390 9 S30 2980MV Ilii tw lcwheskm 100 3 60 2d0 MV Onm wlthlie3km 210 3 90 640OliLTransiomnerV.MVA 1200 18 10800 10800 DstLTrantrimeMVA 2400 1id 21600 21600LV.sw.ge 120kVAIldt. 96o 2 9600 oe6o LV`.sw.g* @128kVA/dr. 19200 2 19200 19200LV.Ifnese.n 3000 8 12C00 12000 LV. Unnkm 4700 8 18800 18800Oemestic oonsonneu000 149 48 3580 3572 OrBmet Oas.onnects.000 233 48 8590 8894IndusLteson. coinscts,000 0.7 20 7 7 indut OWns. cOnnsots.000 1.7 20 17 17Equipments and cil works 0.028 0.05 _OO 4100 Equipments and ei works 0.025 0.06 3S00 7800

Sub Total: 71967 894I1Sub Total: 3937 473

TOTAL 201650 243070

TOTAL NORTHERN REGION (PC1): 982669 438515

- 122 -Annex 4.W)

ESID1ATh OP REGIONAL TRANSaION AND DISmUnION WNESNr BASE COSISOUTIMRN REGION (PC2) - 1992-2010- SCENARIO 1 LWAD PORECASr

A-OUTHERN REGION 23WkVTRAN8MISSON SYSTDJ B-SOUTHERN REGION 110k TRANSMISSION SY8rEM$001 Cod USSOO so Co USSOO

Cty Unit PC LC.tax' Oty Unit FC LCutax

1-HOCHIMINH CITY 230kV LOOP: 1-STAGE 1(1 92-1:230kV double cot.lnes.kn * 63 130 93 1701 110kVlines.ctkinm 31 100 2325 776230kV single ootin.skm * 40 100 3400 G00 110kVSubsAtonbays 78 200 14040 160230kV Subaton bays * 30 300 8100 900 IIOkVT,ansfotmo,.MVA 060 10 13964 1680230S11OkVTranetormersMVA * 1503 10 14067 1683 Mediumvalt SS. bays 113 20 1356 004110kV&Subsaonbays * 37 200 6660 740 Civilworks 0.02 0.02 729 729CivU waft * 0.02 0.02 947 947 Sub Total: 32404 5518

Sub Total: 42813 64512-STAGE2 (1997-2001):

2-NORTHERN MEKONG DELTA 230kV TRANSMISION: 110kV lines, otm 184 100 13800 480023OkVdoubleect.Inss,km 124 180 18072 3348 ll0kVSubstaonbays 73 200 13140 1480230kV single otlineo.km 0 100 0 0 11OkVTransdormurs.sVA 870 16 12628 139223OkV Subtatlon bays 15 300 4050 450 Medium volt S1S. bye 171 20 2052 13682301110kVTOrandormstr.MVA 600 10 4800 Soo Cil works 0.02 0.02 1007 1007110kVSubsaonbayo 17 200 306o 340 Sub Total: 42827 9827Clvil worka 0.02 0.02 704 704

Sub Total: 31286 5342 3-STAGE 3(2002-2008):lOkVilnes.ookm 1148 100 88876 28625

3-SOUTHERN MEKONG DELTA 23OkVTRANSMISSION: 110kVSubtatUonbays 123 200 22140 2480230kV double ctLlinee,km 60 130 0180 1620 110kVTrandfarms,MVA 1270 16 18288 203223OkV single cUlnes,km 200 100 17000 3000 Medium volL SIS, bays 256 20 3060 2040230kV Substadon bays 16 300 4050 450 Cvil works 0.02 0.02 3290 3290230/ll0kVTranstormers,VA 00 10 5400 600 Sub Total: 132653 33447110kVSubstaonbays 19 200 3420 380Cvil works 0.02 0.02 902 902 4-STAGE4(2007-2011):

SubTotal: 39952 8952 11OkVIinr,soctl.m 2400 100 186760 62250I10kVSubstatonbays 205 200 3600 4100

4-SOUTHERN HIGHLAND 23OkVTRANSMISSION: 11OkVTranstormersMVA 1980 16 28812 310B230kV double oct.ilnekm 7 1t0 1071 160 Medium volt S/S. bays 400 20 4900 3200230kV single ollines.km 120 100 10200 1600 Cvi works 0.02 0.02 6894 6584230kV Subttion bays 18 300 4050 480 Sub Total: 2838 793122OI lokVTranslormeresVA 625 10 5826 625110kV Substdon bays 18 200 3240 360 TOTAL 471140 133104CMI works 0.02 0.02 852 682

Sub Total: 24738 3976

TOTAL: 138789 22721

C-SOUTHERN REGION 018TRIBUTION SYSTEMSOOI Cost USS00 S000 Cost USIOCO

Oty Unit PC LC4x- (My Uni FC L.tax

1-STAGE 1 (19962001): 3-STAGE 3 (2002-2008):M.V. OIH min llneos,km * 400 12 720 4080 M.V. O/H mn llneo.km 800 12 1440 816oM.V. teolffh.km *120 9 10 920 M.V. tewtea.km 240 9 320 1640M.V. lino wltch" Q3km * 70 2 20 120 M.V. ineswinltcoe 03km 130 2 40 220Dist. Trandlonners.MVA * 700 18 6300 6300 ist. Transformere.MVA 1800 18 13500 13500LV.sw.goare0 i125WVAfdr. * 560o 2 66o 5800 LV.sw.gea6 0 12$kVA/fdr. 12000 2 12000 12000LV. Ilinesekm * 3400 8 1380 25840 LV. Ilnes.km 4400 8 1760 33440Domesti 1on.oonnoto.000 * 169 48 4060 4082 Domestic oone.eon_.000 221 48 5300 60IndusL con. connect.000 * 0.4 20 0 8 IndusL cons. connctc.000 1.1 20 10 12Equlpments and cli wok * 0.025 0.05 16o0 3300 Equipments and eil works 0.028 0.08 2700 5400

Sub Total: 37070 70880Sub Total: 10820 50220

4-STAGE 4 (2007-2011):2-STAGE2(107-2001): M.V.OIH mainilnes.km 1300 12 2340 12320M.V. O/i maln ln6e,krn 600 12 1060 8120 M.V. tesolh,km 390 9 530 290OM.V. tloftfkm 18O 9 240 1380 M.V. line swihes 03lon 210 2 so 380M.V. line witches 03krm 100 2 30 170 Olrt Tranafom.css.MVA 2400 18 21600 21600Oist. Tranaronmers.MVA 1000 18 9000 9000 LV.aw.geasr 0 12$kVA/fdr. 19200 2 19200 19200LV.w.geara0 l25kVAfdr. 6O000 2 8O00- 8000 LV. lilnos,km 650 8 2200 41800LV. lines.km 3500 8 1400 26600 Domesti conQ.eConneCtLooo 275 48 66o 6600Oomestic on.0.onnsct4.000 176 48 4220 4228 Indut ons. connetet.000 1.7 20 20 14Indust cons connOeeOOC 0.7 20 10 4 EquipmentS and clmi watsk 0.025 0.05 4000 7000Equipment and eivi works 0.025 0.05 2000 4000 Sub Total: 66U80 113714

Sub Total: 259b0 5W02 TOTAL 139420 303316

TOTAL SOUTHERN REGION (PC2): 749348 459141

- 123 - An 4.10(c)

EfMATE OF REGIONAL TRANSMISSION AND DISIRIBUTION INVESI? BASE COrnCENTRAL REGION (PO)- 1992-2010 - SCNARIO I LOAD PORECASr

A-CENTRAL REGION 230kV TRANSMISSION SYSTEMSOOt Cost USSOO $S000t Cost USS000

qty Unit FC LC+tax * Cty Unit FC LC.tax1-CENTRAL-8OUTH 230kV INTERCONNECTION: 2-CENTRAL-NORTH 230kV INTERCONNECTION:230kV double cct.llnssAm * o0 80 0 0 230kV double cotlines.km 0 180 0 0230kV single cLlInesAkm * 390 110 38465 6435 230kV single catlines,km 460 110 42075 7425230kV Substaton bays 4- 300 1080 120 230kV Substaton bays 300 1620 180230/110kVTransformers,MVA *128 10 1134 126 230/tt0kVTransformers,MVA 376 10 3375 37510kVSubstadonbays 3 200 640 60 II0kVSubstationbays I1 200 1880 220Civilwofks * 0.02 0.02 919 919 lvilworks 0.02 0.02 1145 1145

Sub Total: 40138 7660 Sub Total: 50195 9345

TOTAL 90333 17005B-CENTRAL REGION 110kV TRANSMISSION SYSTEM1-STAGE 1 (1992-1906): 3-STAGE 3 (2002-2006):110kV lines, cctkm *50 70 2825 875 11OkV lines, cctkm 80 70 4200 1400ll0kVSubstationbays 9 120 972 108 IIOkVSubstaaonbays 17 200 3060 3401lOkVTransfonners,MVA * 70 12 756 84 1I0kVTransformers,MVA 140 12 1612 168Medlumvolt.S/S.bays * 16 15 144 98 Mediumvolt.S/S.bays 32 15 288 192Cil works 0.02 0.02 113 113 Civil works 0.02 0.02 223 223

Sub Total: 4810 1276 Sub Total: 9283 2323

2-STAGE 2 (1997-2001): 4-STAGE 4 (2007-2011):11OkVlines.cetkm 60 70 2825 875 11OkV lines, cctkm 80 70 4200 140011OkV Substation bays 21 200 3780 420 11OkV Substation bays 25 200 4600 500110kV Transfonners.MVA 185 12 1998 222 110kV Transformers,MVA 220 12 2378 284Medium volt. StS. bays 45 15 405 270 Medium volt. S/S. bays 48 15 432 288Civil works 0.02 0.02 212 212 Cvil works 0.02 0.02 279 279

Sub Total: 9020 199 Sub Total: 11787 2731

TOTAL: 34700 8329C-CENTRAL REGION DISTRIBUTION SYSTEM

$000 Cost US$0OO $000/ Coat USsoooOty Unit FC LCe4ax- *ty Unit FC LC.tax

1-STAGE 1 (190-2001): 3-STAGE 3 (2002-2006):M.V. O/H main lines.km * 120 12 220 1220 M.V. O/H maln lines,km 120 12 220 1220M.V. teolhf,km * 20 9 30 150 M.V. teeoffs,km 20 9 30 150M.V. line switches @3km * 10 2 0 20 M.V. llne switches O3krn 10 2 0 20Dlst Transfonners.MVA * 80 1 720 720 Dist. Transformere.MVA 170 18 1530 1530L.V.sw.gears @ 76kVAPAr. 1070 1.5 800 805 LV.sw.gears@ 76WVA/fdr. 2270 1.6 1700 1705L.V. lilnes.km * 90 7 210 3920 LV. lines.km 750 7 250 4990Domestio cons.connects,000 *39 38 700 704 Domestc cons.connecte,000 60 38 900 eooIndusL.aons. connect,000 * 0.04 15 0 0.6 Indust cone. onneote,000 0.07 16 1 0.06Equipmentse and civil works * 0.02 0.05 300 600 Equipments and clvil works 0.02 0.05 400 800

Sub Total: 2980 8039.0 Sub Total: 5041 11315.2-STAGE 2 (197-2001): 4-STAGE 4(2007-2011):M.V. O/H main llnes.km 120 12 220 1220 M.V. O/H main llnes.km 240 12 430 2450M.V. teeoffs.km 20 9 30 160 M.V. teeoffs.km 60 9 70 380M.V. line switches @3km 10 2 0 20 M.V. lns switches @3km 30 2 10 50Dlst. Transformers.MVA 140 18 1260 1260 DIst. Transformers,MVA 260 18 2340 2340LV.sw.gears@ 76kVAfdr. 1870 1.5 1400 1405 LV.sw.gears @ 76kVAJfdr. 3470 1.5 2600 2605LV. llnes,km 600 7 210 3990 LV. llnes.cn 950 7 330 8320Domestc cons.connects,000 40 36 720 720 DomestI cons.connects,000 83 36 1130 1138IndusL cons. connects.000 0.05 15 0 0.75 Indust. cons.c cinnects.000 0.1 15 1 0.5Equipments and civil works 0.02 0.05 300 800 Equipments and civil works 0.02 0.05 6oo 1100

Sub Total: 4140 9365.7 SubTotal: 7511 16383.

TOTAL: 19672 45104

TOTAL CENTRAL REGION (PC3): 144706 70437.

Annex 4.11(a)Page 1 of 2

VIETNAM ENERGY SECTOR REVIEW

Long Run Marginal Cost of Supply and and Net Present Value of LossesCase 32: Scenario 1 Lower Demand EHV 1994, 2BCM Gas 1995

Cost of Supply at Busba Actual NPV Cost In US$ m to 2000 Actual NPV Cost In USS m to 2010Cost Amort Sum AMO Sum Cost Amort Sum MO Sun1 Generation 1035 642 642 596 596 6426 1394 1394 1537 15372 EHV 500 244 886 244 839 1500 506 19D0 506 20433 230 kV Substatlons 214 33 919 33 872 721 126 2026 126 21694 110 kV Substatlons 369 31 950 31 903 1700 177 2203 177 23465 MVSytaem 229 32 93 32 936 633 111 2314 t11 24586 LVSystem 229 32 1015 32 968 633 11 2426 111 2569Total 2577 1015 968 11614 2426 2569

NP of margnal GWh Geneatd 18590 50521NPV of marginal MW Installed 1540 2516

A)locatlonlunk LRMC to 2000 LRMC to 20107 Present Loss Sitalon Loss Sale 0De ry Cons Ene Capial Lo Enerw Capital Lossestobus at bus daWh VW MS clkWh V1kW MSGeneration 1% 1.00 320 417 6 3.04 554 6TransmIssion (EHV/220 kV) 6% 20% 0.93 0.14 5.05 619 56 4.62 812 51Sutransmlsslon (110 kV) 5% 10% 0.74 0.07 5.61 690 52 5.40 994 50Medium VoItage(3(1516 kIV) 8b% 15% 0.59 0.11 6.67 817 99 &51 1294 97Low Voltage (23af400V) 10% 55% 0.38 0.39 &85 1084 165 8.77 1882 163Total 30% 100% 0.70 Avg 7.44 378 7.26 367

Allocation/unit LRMC to 2000 LRMC to 20108 Future LossSuation Loss sale Deilery Cons Energy CapItal Los Energy CaplW LOWesto bus chkWh S/kW MS cdkWh S1kW MSGeneration 1% 1.00 3.20 417 6 3.04 554 6Transmlson (EHV/220 kV) 5% 20% 0.94 0.16 4.99 612 46 4.57 803 42Sutransmlsslon (110 kV) 2% 10% 0.76 0.08 5.34 657 20 5.15 958 19 t>Medium Voltage(30W1516 kV) 4% 15% 0.63 0.12 5.96 763 44 5.83 1178 43 OQLow Vltage(230/400V) 6% 559% 0.45 0.45 7.14 911 80 7.09 1558 7918% 100% 0.82 Avg 6.35 196 6.20 190

0.

h-V

Anm4.1t(aPage 2 o12

Vietnam Energy Sector Review - Power Stor Investment RequirementsPower sector Investnent to Meet Lower bad - Case 32 EHV 194 2 BCM ga 1995

1992-1995 1996-2000 2001-2005 2008W-20O Total USSm ToaFC LC FC LC FC LC FC LC FC LC USrn

Generation Plan 191 85 631 128 2899 924 1273 295 4994 1432 6426

EHyStagel 1994 250 250 0 0 250 250 S00HV StW U 2005 100 100 400 400 500 500 1000

PCI T&D 102 63 251 118 388 167 497 234 1238 582 1820

PC2TSD 114 85 113 96 287 170 452 264 965 616 1581

PC3T&D 37 20 27 17 98 34 29 26 190 97 287

Total 694 503 1021 359 3772 1396 2651 1218 8137 3476 11614

AccumulatedTotal 1197 2577 7744 11614

Notes1 Excludes Investments In committed hydro projects at Vin Son. Thac Mo, Hoa Binh, Song Hin which are IncludedIncluded In the L-RMC base costs to cover expansion plans In 1992.

2 First Stage EHV 500 MW capacity In 1994, uprated to 1000 MW capacity In Stage II, with subsequent expansion,to 3000 MW capacity covered In the Son La proect

3 Distribution Costs as fol-ows

PC1 220kV 16 1 56 10 145 28 88 16 305 55 360110kV 37 8 143 45 172 52 313 99 665 204 868Dist MV+ LV 50 54 52 64 71 87 96 119 268 323 591

PC2 220kV 46 11 24 4 69 12 42 7 182 34 216110kV 41 7 54 13 168 52 335 106 598 178 777 DistMV+ LV 26 67 35 79 49 106 75 151 185 403 589

PC3 220kV 27 8 10 2 80 16 4 0 120 26 145 4 110kV 6 2 11 3 12 3 15 4 44 1 55 °Dist MV+ LV 4 11 6 12 7 15 10 22 28 60 88

* b .~~~

Anns 4.11(b)Page 1 of 2

VIETNAM ENERGY SECTOR REViEW

Long Run Marginal Cost of Supply and and Net Present Vaue of LossesCase 37: Scenailo 2: Higher Load Demand, EHV 1994, 2 BCM Gas 1995

Cost of Supply at Busbar- Actual NPV Cost In US$ m to 2000 Actual NPV Cost In US$ m to 2110Cost Amnon Sum MUO Sum Cost Amort Sum AMO Sunm1 Generation 2480 717 717 722 722 11156 1821 1821 2211 22112 EHV 700 423 1140 423 1144 1600 859 2680 859 30703 230kVSubstations 214 33 1173 33 1178 721 126 2806 126 31964 110 kV Substations 604 50 1223 50 1228 2990 291 3097 291 34875 MV System 295 37 1260 37 1264 954 142 3239 142 36296 LV System 295 37 1296 37 1301 954 142 3382 142 3772Total 4587 1296 1301 18375 3382 3772

NPV of marginal GWh Generated 27055 80272NPV of marginal MW Instalied 1880 3464

Ailocation/unit LRMC to 2000 LRMC to 20107 Presnt LOssSituation Loss Sale Dliver Cons Energy Capital os Enew Capia Losseto bus at bus dckWh VW MU chWh VW MSGeneration 1% 1.00 2.67 382 7 .75 526 7TransmLssion (EHV/220 kV) 6% 20% 0.93 0.14 4.68 652 76 4.26 832 69 ONSutransmission(110kV) 5% 10% 0.74 0.07 5.25 720 71 5.06 937 68Medium Voltage (30115/6kV) 8% 15% 0.59 0.11 6.19 948 134 6.05 1207 131Low Volage(2301400V) 10% 55% 0.38 0.39 &15 1114 220 o08 1627 219Total 30% 100% 0.70 Avg 6.87 509 6.71 495

Allocation/unit LRMC to 2000 LRMC to 20108 Future Loss Situation Loss sale Delvey Cors Energy Captal Losses Ery Captal Lossesto bus chWh $lkW MS c/kWh &kW M$Generation 14% 1.00 2.67 382 7 2.75 526 7Transmission (EHV/220 kV) 5% 20% 0.94 0.16 4.63 645 63 4.24 823 57Sutransmission (110 kV) 2% 10% 0.76 0.OB 5.00 686 27 4.83 693 26Medium Voltage (30/1516 kV) 4% 15% 0.63 0.12 5.53 771 60 5.41 1082 59Low Voltage (23W400V) 6% 55% 0.45 0.45 6.56 917 107 6.53 1317 106

18% 100% 0.82 Avg 5.86 263 5.73 255 , >CD fi

00

0.

Annex 4.1l1b)Page 2 of 2

Vietam Energy Sector Review - Power Sector Investrent Requ entsPower Sector investnent to Meet Higher Load - Case 37 EHV 1998 2 BCMIyr Gas

USS Millon

1992-1995 1996-2000 2001-2005 2006-2010 Total US$mn TotalFC LC FC LC FC LC FC LC FC LC USSm

Generation Plan 396 122 1443 520 3348 1171 2679 1478 7866 3291 111S6

EHVStagei 1994 250 250 100 100 350 350 700EHV Stage I 1998 200 200 250 250 450 450 900

PCI T&D 145 83 332 162 537 249 815 397 1829 891 2720

PC2T&D 114 85 200 149 433 258 816 458 1563 951 2514

PC3T&D 55 28 33 22 114 45 48 40 250 135 385 1

Total 959 568 2107 953 4632 1923 4609 2623 12307 608 18375

Accumulated Total 1527 4587 11143 18375

Notes.1 Excludes Investments In committed hydro projects at Vin Son. Thac Mo, Hoa Blnh. Song Hin which are IncludedIn the LRMC base costs to cover expansion plans In 1992

2 First Stage EHV 500 MW capacity commited, uprated for Yafl 1998, reinforced to 1500 MW capacity In Stage U,with subsequent expansion to 3000 MW capaciy covered under the Son La project

3 DIrlbution Costs As follow

PC1 220kV 16 1 56 10 145 26 88 16 305 55 360110kV 69 17 206 64 287 87 568 179 1130 347 1477DbstMV LV 60 65 70 88 106 134 159 202 394 489 883

PC2 220kV 46 11 24 4 69 12 42 7 182 34 216110kV 41 7 119 32 281 85 634 199 1075 324 1400 4 DistMV+LV 26 67 56 113 82 160 140 252 306 592 898

PC 220kV 27 8 10 2 80 16 4 0 120 26 145 9110kV 21 7 15 4 23 7 28 7 88 25 113DIM MV LV 7 14 8 16 11 23 17 32 42 85 127

- 128 -

Annex 4.11 (c)Page 1 of 2

astimation of short-TerM Marginal RleotriaitZ supply Costa

1. An estimation at market prices has been attempted primarily by adjustingthe plant value of power stations. Instead of depreciation, capital allowancehas boen accounted for through application of the average incremental cost(AIC) principle where total annual costs are discounted and divLded bydiscounted production. A real financial rate of return (RFIRR) of 7 percentp.a. has been applied.

2. In the real cost of electricity estimates below, nower generated iscalculated as plant rating times a load factor in two alternatlves: the presentload factors and a 75 percent load factor assumed as full capacity utilizatLon.Revaluation of fixed assets have been introduced as plant value ln 1991-priessmultiplled by a factor of 3e85 which is equal to the average adjustment offixed assets proposed by PC2 for 1992. The revaluation primarily reflectsalignment to the depreciation of the dong from 3900 dong/US$ and 2400dong/Ruble used in the 1991 plant values to the present level of around 13000dong/US$. However, adjusting the plant value according to deprecLation of thedong during 1990 and 1991 introduces a real price increase in plant value asthe general price level in Vietnam increased by some 150 percent during thepast two years according to the retail price index.

3. Applying the AIC combined with plant revaluation as described, introducesa real price increase in the real cost estimates of electricity. Popsibleexpenditures on modernization nroarams have not yet been introduced in thecalculations (except in Pha Lai) . Onerating expenditures are accounted as aspecific cost in dong/ kWh times power generated based on 1990 data. Thespecific fuel costs and other operating expenditures (wagos, materials,management, marketing etc.) have been kept at the 1990 level. Thus possiblereal price increases in fuels (notably coal2) and wages have not yet beenintroduced in the analyses. An exchanSe rate of 13 000 dong/US$ has beenapplied to convert calculated electricity costs in dong/kWh to USc/kWh.Assumed economic lifetime of installed power infrastructure is 20 years.

4. Following above conslderations, the short term marginal cost ofelectricity supply in the present Vietnamese system is probably in the order of500 dong/kWh (4 USc/kWh) on average3. For comparison, the average tariffproposed by PC2 for 1992 is 626 dong/kWh. The calculated average incrementalreal cost of electricity supply for the major power stations of Vietnam arelisted below together with the standard unit cost applied in 1990 and 1991.

2 Ref. forecast opportunity value prices of Vietnam energyproducts.

3 At 12 % RFIRR, the average real cost of electricity is 613dong/kWh at prqsent capacity utilization. At 12% RFIRR,revaluation factor of 6 to account for addltional modernLzationinvestments plus tentative adjustment of existing plant toopportunity cost and capacity load factor 75 ', averageincremental cost of electricity supplies are calculated at 471dong/kWh.

- 129 -

Annex 4.11 (c)Page 2 of 2

Average Zncremental Real Cost of Electricity Supply

Power station Standard Unit cost Average Incremental Costdong/kWh dong/kWh (USc/kWh)

-1990 1991 4 3Alt. I j Alt. II

PCI: Pha Lai 73 155142 (1.1) 100

Uong bi 159 397 277 (2.1) 145

Ninh binh 127 312 188 (1.4) 139

foa Binh 28 28 242 (1.9! 189

Thac ba 26 42 86 (0.7) 56

PC2: Thuc duc 183 361 380 (2.9) 280

Cau Tho 206 376 468 (3.6) 404

Da Nimh 19 23 258 (2.0) 190

Tri An 18 30 480 (3.7) 310

PC3: Total 382 2104 (16) 465

Vietnam 136 J 444 (3-4) 239

4 Alt. I; present-load factors and Alt. II; load factor 75% ofcapacity.

5 176 (1.4) when a USD 35 million modernization program is addedto the plant value-91

- 130 -

Annex 4.12 (a)Page 1 of 4

Financial Analyses for the Least-cost ExDanfion olan

Mothodolocry

Introduction

Investments to implement the least coat expansion plan of the energysector is expected to require primarily commercial finance for the petroleum andcoal sector programmes, while development of the electricity sector will needfinancial contribution from the government and international lending agenciesoffering soft finance. This report deals primarily with financing of theelectricity sector expansion. Sourcing of finance for the co,' sector developmentis commented in brief.

Electricity sector

Cash Flow Model and Assumptions

A cash-flow analysis has been developed projecting revenues andexpenditures, fixed assets, liabilities, source and application of funds 1992-2000 in fixed USD-92 for PC1, PC2/PC3 combined and the electricity sector ofVietnam in total.

The cash-flow analysis is based on profit and loss accounts and endyear balance sheets 1990 of PC1, PC2 and PC3 in dong converted to USD at 5000dong/USD except for fixed assets at 3900 dong/USD.

Scenario 1 load forecasts of the electricity demand have been used.

Electricity tariffs have been stepped up from the present level to8 USc/kWh in southern and central Vietnam (PC2/PC3) and 6 USc/kWh in northernVietnam by 1995. Accordingly, the weighted average tariff for Vietnam 1995-2000is 7 USc/kWh, i.e. the long run marginal cost in the least cost expansion planof the Vietnamese electricity system. The difference in tariff of the northernand the southern electricity supplies reflects that the two regions are notinterconnected during the planning period (according to the least cost expansionplan). In the North, excess generating capacity will prevail and in the south adeficit in electricity is likely to remain up to year 2000. The higher thanaverage tariff in the south will strengthens the financial position of PC2/PC3and reduces the supply shortage by the marginaldemand which can not afford the higher tariff. In the north, lower tariffs willstimulate demand of unused available capacity.

Fuel prices have been increased (in real terms) as assumed in thebase case load forecasts. Fuel volumes are as in the base case forecast of heavyfuel oil, diesel, natural gas and coal.

Depreciation rate is assumed to be 2.8 percent, i.e. the average forthe electricity sector according to historic data.

- 131 -

Annex 4.12 (a)Page 2 of 4

Taxes are calculated at 12 percent of groso revenues. (The rate issomewhat higher than the actual tax on gross revenue to account for other taxeson natural resources, fixed assets and profit not explicitly calculated in themodel.)

Investments are according to the recommended least cost expansionprogramme estimated at 2.9 billion USD-92, 1992-2000 of which 2.227 bill;;on USD-92 are new investments and 0.763 billion USD-92 are already committedi vestments. Investments have been specified in a domestic and a foreign currencycomponent.

sourcing of finance

The opening balance of utilities is assumed to be financed partly bydebt to government and partly by government equity. The equity rate applied is50%. A dividend holiday is granted till 1997, whereafter dividend is calculatedat a percent p.a of equity.

Borrowing requirements are residually determined as the differencebetween investments and net internal generation of funds (internal generationless debt servicing). Borrowing is split in a domestic and a foreign componentto match investments in foreign and domestic currency. The domestic component isexpected to be short & long-term debt while the foreign borrowing is expected tobe predominantly long-term. Interests are included at 5% p.a., 10 % p.a. and 12% p.a. for long term foreign debt, short & long term domestic debt and debt togovernment respectively. Implicitly, the foreign sources of finance is expectedto be soft finance. Short r long-term domestic finance is expected to becommercial. The interest on government debt has been determined bearing in minda reasonable return to society on fixed assets in place and social factors (i.a.income distribution and purchasing power of consumers).

Results

The financial position of PC2/PC3 is specifically strained during1992-94 before the new hydropower plants Thac Mo, Vinh Son and Songh Hinh arecommissioned (1994) and the fuel switch from heavy fuel oil to less expensivenatural gas takes place i.e. rehabilitLion of gas turbines at Can Tho, Thu Docand Baria, recommissioning of steam turbines Thu Doc and commissioning of new 100MW combined cycle capacity at Earia, 1995.

In the north, PCl has to finance the remaining irlestments tocomplete the Hoa Dinh (units # 4, 5 and 6 by 1993 and units # 7 and 8 by 1994).However, from 1994 to 2000 only moderate investments have been assumed and theoverall financial viability of PC1 is much more robust than for PC2/PC3 eventhough the tariff escalation and level is assumed higher in the southern than inthe northern system. The financial viability of PCl is much dependent on thefinancing of Hoa Binh.

To compensate lack of internal cash generated in the southern andcentral systems even further, only a 6% dividend is levied on PC2/PC3, while PCI

- 132 -

Annac 4.12 (a)Page 3 of 4

has to comply with the 12% assumed to yield an acceptable return on governmentequity.

Under the assumptions chosen, the average return on operating plantis calculated at 7 % p.a, for the electricity eactor combined - 6.3% p.a. forPC2/PC3 and 7.8% p.a. for PC1.. The difference between northern andsouthern/central Vietnam results from higher operating costs in the South(notably for fuels) and higher valuation of asset in the south than in thenorth 1 .

Borrowing requirements to finance the least cost expansion programmeare 2.1 billion USD-92 of which 1.3 billion USD-92 in foreign exchange. PC2/PC3will have to take up some 0.8 billion USD-92 of foreign loans or 65% of the totalestimated foreign borrowing of the electricity sector to finance the least costexpansion plan during the 1990's.

The self-financing ratio for the electricity sector combined incalculated at 30% p.a. on average for 1992-2000. The financial strength of thenorthern system is reflected in an estimated self-financing ratio of 33%, whilein the south the self-financing ratio is lower at around 28 %.

The tentative financial forecast of the electricity utilities inVietnam indicate:

Fixed assets in place needs to be revalued to establish a crediblelevel and relative distribution between north and south/central Vietnam

PC2/PC3 should be granted a longer dividend holiday, lower dividendand/or a higher government equity. Simultaneously, a faster etep-up of thetariff - preferably to the same level (8 USc/kWh) should be introduced.PC1 could be charged additional resource rent on the hydropower potentialto counterbalance the financial los to government from more lenientfinancial terms to PC2/PC3 during the 1990's.

coal sector

In the coal sector, investments of sOme USD 70 million to increasethe export capacity are assumed to take place only if an export potential of 2million tonnes per year by 2000 is likely. In case, the additional 1.5 milliontonnes compared to the present exports of coal is expected to be sold at some USD50 per tonne or approximately 35-40 USD per tonne above the actual productioncost. Additional coal export revenue would then be in the order of USD 50million per year yielding a pay-back period of a couple of years for thelnvestments.

Even though the fixed assets of Hoa Binh at the beginning of 1992have been adjusted to include estimated investments of 700 millionUSD in 1991 in addition to the 460 million USD included in the yearend balance of PC1, 1990.

- 133 -

Annex4.12 (a)Page 4 of 4

If the export market materialises, commercial finance for therequired expansion of the export capacity should be easily obtainable.

Sceu4o -I13 - Annex 4.12 (b)

_____________ Page 1 of 6

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Raw vast t90t ±i un un Jim Im ur ur u an

Phamn eamm ind. rw4alo or,n 310 3713 3S0 4itt 45 SX0 S g57 sm 5am GMa-nss atmjmaed cswemwm 63 16d 3 614 * 4 Go au6 966 1150 323 1507

OoetSnta 2919 3516 366 37 40 "a 446 9 45t 749 A9ga St62Wetk en pogfmTotalhadassm 29t1 3516 3tt 3967 4X07 4459 44 56 6749 4969 5142CwTaelaum 0 0 0 0 0 0 0 0 a 0 aC"h AM balkConuaemesv s nSmwa

Towj na 2918 3516 3666 390? 4107 4402 44a 4a66 4749 '9S9 '512

Eaa 4" Lc a-M_Ownfun" lte 1366 fix 973 65 W 942 913 9g3 m6 966_qu4y 140 1403 1493 1493 140 1403 149 1493 1493 *49 1493AemuwAd saopnn *16 -42 VI7 .440 .542 *64 -64 496 .593 .5W .646

LoNg t5nCd0 ism 1o= 2016 2Z3 252S 2565 2566 2690 2639 2969 3:14Govmne ISCO tSQ0 iSC0 ism9 ism0 iSC0 :SC9 ism9 ISMo isco *5scAxed cmaI kind (RaluslicAS 0FC- 0 325 51S 70 I02 loss 1l06 11*0 323 148t9 *6t4

ShW a WVg Wm deW (Oome 0 32S S13 73: 91 9t1 93lt 9tt 1072 *103to ulay am labe 2S916 MG 3Xw 3997 4307 4692 44S 4566 4749 4W6 5:62

Tabe 3: Fund saw _ew

F;lwv_w ir 190:L in im l urn in ur 97 la r

IAterna 9gee0u 67 75 IIt 234 3:9 46 531 SS2 6l0 6SS 725Neluticweie eltmg t .ts .27 9 113 20 345 386 39 47? 42 541Oowmmon 8~~~~~3 193 ice :21 :36 140 148 11) Is 173 :66

Owrow.ngrenuetnwa 0 6t0 379 496 417 as 32 140 17 212 tSSLonletmhFu mle,) 0 325 19 277 299 40 22 i02 133 Is 125S&LtmlmOoma. I erlenaU 325 1 216 164 26 l0 47 l 46 32

Pad n quy (ndua) 2) 47? 25 0 0 0 0 0 4 0 0 0

rT mnf ava, bl a 7CO 497 7? 75S "5 5s2 701 711 BS7 622

Ale4ion of fundsln_"num' 0 701 266 462 44 2SS 233 2S3 323 3 39

Fmnounvia,0 380 l31 253 246 144 tSS 172 24: 294 2t2Onoatc1oaa 0 350 12 t99 t9S 91 76 el 62 99 105

O d_ano, 0 0 27 277 311 316 30 449 40 *74 46"Rwma-.W-lw mb-te 0 0 0 a 0 0 0 0 0Poo aSenwSU t8mLlu mjoo_e 0 0 0 a 13 0 a 0 0tmrso 0 0 23?7 27 311 316 317 469 460 474 46

Teash. 0 7 697 729 7 do? S 750 ": No 70 7 167 6URSaNl Ianigo raw .3.19% .111% 1% sas6 Sao% 31.2% 460% 5466% 72.%Cumlate awlmmabg 9o .3,9% *245% -137% 1S.% 141% 1649% 21.0% 212% 664%RAeum on ewan OA gmW c 0e2% 6% 477% 7.6% .6% 6.7% 94S 917% t0.4%Avewa atXum43 0 6 g FUN 19111,,100 Ot,14, 9

1)TolM Uffn.1aaaem ea deW mVe ab e~6msma ln nwei - eornof n a ainia & iweamun 1 :9.2m 2)3w 11110A WO gad 3g0 ,eeIini

or4 m(F e_nxm t29 Ftg 192SCYI fto u 332%S&Ltw (Oaffwcu10 z, Oa,wllX@f#|y I= S Oeeomw_eS s 2 5 4ssTOW 2W.1280

SoaDo I - 135 -

Ta9.4: binweeMsm D mc Annex 4.12 (b)_w _ J £9949 44M 9 . itPage 2 of 6

a 2 22 19 0 0 0 0 0T hwrrmi emm a 2 24 22 6o U 24 0 0 6I4Vdrapfe4s 350 127 1 127 0 14 61 I" 191 177rzw.SiNs O a 0 O 0 2 7 17 23 28T0 0 s o 0 eo ao eo ao so 80 4

TOWa 0 350 131 263 248 44 *55 172 241 294 232

Rehat o 0 5 5 00 0 0rhedDa s ao I Ic Id 30 28 21 0 2 I?

7draODlqe 350 127 *27 127I 2 2 11 i5 23 14EHV4m a 0 0 0 2 2 7 17 23 20Tao 0 0 5o so 57 4 42 50 50 49Tore 0 350 129 199 196 91 78 1 3 U9 106

Trl1!Viamon 0 0 2 27 24 0 0 0 0 0 0Thurialplah 0 0 3 41 3S 9S 37 4S 0 3 22I4dy*arqefa 0 79 254 2#4 2X' 2 Is 72 15 214 191E14V4iaW 0 0 0 0 0 2 4 14 34 46 52rao 0 0 0 150 130 137 128 122 130 130 133

Trt 0 79 26 452 4"4 235 233 253 328 33 3

'amGovemnwme mapAy shate 60.0%Average dNIdw 1997.20XO 86%m Amage ilwml t4tO, 1gl er mdeb d 0v. 5 0eril 00 0 .DAvrage rew e lmeW ten' de. Fore9 i 5.0% 0 aAesige ntrneteat. ha & gteem de. Oanst _20 lao LAvoage ta rag. elatl $aWe onl* I2O% o.Eaaone Iao. elenil two (Iu9.n 0.0% 0 a.OaM escalatin 1m 5M0% OL&Average deovaatin rneu asB% o

Plats in eeAv,n wlue 1 990. dang mii 9675780 * TU6 nPtam ne seco valu 1990. USO raSon 2455 33 * 500 for TA netn_reichA. aft. lied amSS aWd dortAon tW0 396 dagUS0xcange rae. revee and o ee 1990 50 dsngJSO

PlOat an s t() * Plisene I(t1).) * P_akn (11 balW Oh m * DadO (1) * Boroweg (t) * Odb lemm (Reteaved o enp It) * Retated eareg (WtI) * Not visn (t)

PlaInar m ndude oAer ataow lrstanatr , as d dWtonwSnesAv @e rae eao brue to nOorao oh"w laxs (on resou. om> e)Averag sienet raue macte lern 1992 @nwd

MO 1 Electricity Sector, Vietnam

'' -

OM -

0

4100

.1,I I

(992 1993 J24 1995 1996 11197 1991 1999 260t

_ Inveatman ._ latrua u of Ilas (AM)

- 136 - Annex 4.12 (b)Scenado. Page 3 of 6

tei 1: lnein4Ii W4 (1Om1 USO 166f32~mjic ioft an am m am m am l am 1tnom 87 0 101 23 32 37 43 "I 47 10 54enogyeal(W 30 322 mm 42 6 A25 4"a 074 5# 11u 6 S 7052Averagetwilf(USO11WIhl as 2.7 50 80 7r0 80 0.0 t0 t0 to0 tEalvaP t23 129 310 35? 37n 348 358 43 477 514 5Fu.* 36 *0 04 1 tCO 53 52 76 72 23 ?INatunl ga 0 0 0 24 21 34 41 48 48Fuel oil 2 75 67 2 4 9 * * 5O ss1 32 3 34 27 27 3J 2 2 IsCoal shuooe

Coalw.rit ff.aoul 0 0 a 0 0 0 a 0 0O&Moo l I- t1 16 Is is iS I? i0 R1 22 29O 0eoalmo 58 5a do 65 70 75 79 04 90 96 100interad andddivd0 0 118 12 153 II7 *eo 227 297 249 2ar"ea 10 IZ 29 26 36 48 49 58 67 2 a 1N etvim" . *23 .129 .121 .74 2 50 Is 2 * 37Table 2: Balanc eht

Fiwyo ].i22 W1 m am 1 J am 2am am m im mm

Plamin.w arr id. rnvajualn 2100 21C0 2182 2372 2528 2714 2874 3049 324 3580 35754aas aomciamd 4edPkutu se lIE 176 241 311 30 4S5 5 40 as1 736 64Oeratig plat 2042 1o0 2012 2150 2231 2232 243 25 264 2142 3031

rotal ixan 2042 1084 2012 2130 2Z9 3 23 2428 215 286 264* X31Cotal 11s moCiavaiiasasts a 0 0 0 0 a 0 0 0 aCA"h aVd baPkCoara mws rserb

Talal aslal 2042 lo 2014 2130 239 233 24C 251i0 265 25142 321acunt ar4 Lwlitmown tids, on 035 on5 610 616 6n7 _ 71 Su 713E41.14V I02Z to2s. 1004 1004 104. 1284 10024 12 1004 1001s 1olRetained arnunp 23 46 .106 4319 *.32 .36 *231N .33S .1127 .290Lon9gtrrn dei 1050 1050 1129 1292 1361 1402 146 1ow l1at It70 12sewnmuti 0o50 1050 1050logo 1050 low 1050 low 10w lO 1050 1050Axed owI fund (Raflt_bon 0

F:'n 0 0 79 212 314 351 373 dO4 72s 8laShaom AWVgtemdoel(O Onw. 0 0 71 1e kmS 29 20 231 35 33 435

Total equay and tbdue 204 19S5 2012 2131 2r90 233 2410 2500 2645 2543 3031Tol 3: Fmd flow _

F'mcw vowam im am am am am am a m afcalve offud

Internal genarmo 21 25 40 S2 US 259 26 2 3 1 323 40Ne rms, lOm. Ott *26 .3* .11 17 7n 14 2- 233 an 254 296Oeoroon 5se Sl e0 65 70 75 73 04 lo 9S t0?gotowungreqwuwnwnls 0 0 II7 230 'iO t 2 31 13 143 102 1 8Lrwg twinmIFOein onr 0 0 79 133 1*2 35 2t 76 II 5 t58 122S&Llrmtwn (O wowharmt 0 73 1l0 S1 24 10 31 3 37 asPad In ri 3 esduw 21 .21 .25 0 0 0 0 0 0 0 0 0rawflaundsavadb 0 0 20Q 321 531 321 319 42 472 548 5an

lnvesIr m 0 0 ee 1" I70 t14 180 17S 235 2f 2aFe currency 0 0 44 10 0 12 IrD 110 123 It9 20 Zsowoinaaoaarrai 0 0 44 81 70 64 60 so 47 6a 5?OWbtNM es4 0 0 11$ 136 IS3 Is? IS0 W 207 246 2anR*Mmnm. WV tlwm 1 0 tote

ReOWprwn S&L 4mmf mwodaonbsIntuRm U a 0 118 135 153 is? 1N 2V 237 249 218tal apl4n 0 0 20 221 321 5Zt 3t1 42 472 54n 5JSel fiiancing rabe1 ) .38.0% 4.2% .120% 51.6% Sl1 S 314% 4*6% 512.7% 736%Cumilaieurself4baring riaIO 350% .316% .217% .14% 10.3% 142% 166% 2&1% 360%Aejunonoperamlgobtll,OerlW 45% af% 1S% 79S 9 7% 14% !O% 6.9% 07%Average tow ran q O Pwt 1902100 62%

I ) Total etlerliel a Olit bZ5d 8U4 aid meow iii 3011310 ~al as peroeiilagsd _9V405 eMitil me uoi _ 10283500. 9UWban Q 21 mY*' lo i p4 I 9_mweto tela MD itUS0r1992 IMmau l190222 U 1025 M %Igm

Li term (tFor 04113101 84 S&L term. (Owiea 0ui131071me ai" Wrawd 1W

- 137 - Annex 4.12 (b)Page 4 of 6

o a 02 24 4 66 so 24 0

NHdmpsqede 2a 42 42 1 61 " 191 177EIIVJirw s * 9 12 23

TAO 26 34 24 24 24 24 24 2

Toed 0 0 46 l1 IOD IW 110 124 19 230 28

o 0 0 0Thw" owft ~ ~ ~~~~~I 16 16 30 2U 21 0 0

HM _Orqe 42 42 42a 2 2 1 1 I 23 14.QW4V4dew 2 I A 9 12 23TrO 24 2: 19 I5 23 24 20

rcuei 0 0 o o 61 79 St !0 50 47 St 57

'lhabgieMm 0 0 0 0 0 0 0 a 0 0Th _smuiles, 0 0 3 41 24 96 67 4A a 0 0

dapreem 0 0 64 6 6 2 16 72 159 214 191rW4k* 0 0 0 0 0 2 a 7 17 2a 4arAO 0 a o 4 so9 as la SI 59 5s so

rTw 0 0 o 8 166 170 166 10 175 234 250 224

An ffeuet i%Avweagdisdus 1997.2000 A.%ge.Av_g 9~ Mets. Vn9 twn ddbl. Owarml 10.0% 1p&A _ssmg [toMte, Is lon ddM, F8p. 50% P .AMsse W -mM. u A Wn ddWl. O0MW 12M0% 06

Awve tax tam. seeowy *4m ol 120%10.Esa~n lenm deolay we (199wm0= Q0% 06O6U maimn., teat 5Q0.% 0-Aveag d am sets 2Me 0 5

Ptvo a*9m Ova , 90.dvgn 725700 *T TOPlint Sme va 1990. USO aIgn 1S61 * 2S0 lor TAO I 2100Eche sie. haed as_e &W dh on 1UG NW00 dOA%mExbinge rme. nveva mid oxpen 1990 55W 00 l

Pmi isin s ( * Plant u e t 1 R ( * l' 4 e hOseil * ow bO.1). o am w.oew ammso(0 Resad sewns M * Re ed _r mp () * Nl OomM

Pln a seAm _,duds Doww NMi. ltranwasuua wd ds*Oel hueAwne tax rue caihee d to _umsmsz W (ae Oesouie. poi 6$Awge ro_et e ad ftom IMo dS

4~~uth and Cantral aitnam (PC2&PG

200

0

.10 992 1993 94_ 1995t 199i 1997 9916 9t99 200

_IIIVmaUIIU , _t _me gem di ofAms(e

Scsaado I 138 - Annex 4.12 (b)Page 5 of 6

Te"e 1: Inm Of t Ii US0 1502)

InM 90 92 ItI 190 ?17 279 302 32 352 389 612E,gy "we (owi 3tn5 3tt 3S 39ti 43 4t St 56 73 tSJi63 6O0A.4age Wha (U81Wh) to 2a7 3t1 50 5.5 60 60 6.50 a0 tl0 dO

ignorms"Um 70 6e 213 243 269 27B 28t 35J 367 378 391;wze 22 20 t5 9 6 4 a 9 ItI isNajural gm I I 1 0 0 0 0 0 0Fuel adl 0 0 0 0 0 0 0 00mM a 0 0 0 0 0 0 0 0COW acoed 0 0 0 0 0 0 0 0 0C.w m. nwem 14 7 3 4 a 9 8 tI IS

CO&M c 2... 11 IS tS Is Ia 7 19 21 22 23Oeoesaaon 25 4 49 51 0 65 67 es 72 75 77Inemtwnd dmadw8ds 0 0 tt9 140 ISO -13 tS7 221 224 225 22Taxes II I 1 24 26 36 36 39 42 46 49

Not .vtow 21 6 .9 4 33 2 is *32 .14 3 20

Tabte 2: BAner t1h

FMLm 10 ifl1v 1992 1S1 !^ ur !irn 11 ]21

Patn mswdx Vlaktea I 90J ttSQ t72 2040 23as 2376 2469 2527 2S15 2712 26144ess aasmnutlt ddepsmsbo 25 so ti? 174 227 302 370 A3M St 5ats 61

OoWauengttanl 875 153M 1656 Is"6 2066 2073 2079 208 2106 2125 215t

Woek en otmegsTota fixed Um 675 1531 1U65 low 2065 203 207 21311 20 2126 215'

Cuntm aso" 0 0 0 0 0 0 0 0 0 0 0Cash nd bankCoaume so a ertsn adbeInvetorm

Total assl 675 1531 1654 1866 206E 2073 2079 206 210W 2126 2151

E Z id LIdiWtibOwn funds A2 431 3 265 256 25? 2n 243 m 232 252awly 4a5 40 AM6 40 4 406 406 4 44 40 405Roedminmgs 21 27 n72 .116 .148 .16 .310 *161 .176 .173 *IS

La"letedel 650 5 687 1031 1152 t165 1166 1a9O 1206 1219 1201C*ver iknit 450 *50 650 4tO 450 650 450 450 650 450 450F"d ex"l fun (AevakUia0 ) 0Fortn 0 325 437 5Bl 712 715 715 740 758 7NO 771

vSIwl&"aigennd(mw 0 325 *35 5t7 650 65t 6GM 655 6a7 675 673

ToeaJeawqy aMidt3 675 1531 t654 law6 2068 2073 2079 2065 2106 2126 2151

Taft 3: Fadsow uo

FJA tiXO19 tiSt t99 2 t99 19it5 t 9 in Q Z 1

lntlmalgwwabm AS s0 so 18 1B9 228 243 25W 21 303 32No ereiwbgfowtev 21 6 20 Os 128 ISO 175 190 21 223 246

ODMOSn 23 6 49 51 6O 65 67 Go 72 75 77

OSWrognng r _rnts o 0 650 m 256 234 4 0 40 31 20 5L.OntorgmnFooCn ameW 0 325 112 " 131 0 o 24 Is II 2S&L lwm 1O0nw mmeYl 325 tO 10 2 103 2 0 IS t2 a 2

Pado n swu (rMAIM a-45 0 0 0 0 0 0 0 0 0 0

Totl Ifunds avadabb 0 700 291 400 A3 2X0 243 299 312 322 2

nff4estovnttt 0 7O 172 266 265 71 73 73 eS 97 103forogn wronN ay It 350 67 151 I4 A4 65 de 63 51 56Oonust.aa,ruwt 0 350 es5 it? I17 27 26 31 36 42 69

O.btswveo 0 0 119 140 I9 135 170 m2 224 22 22SR-W. g tmt t hRymwn S&L tmrn bantsoeni 0 13 a 0 0 0lmolrs 0 0 119 W40 tIs 159 S7? 21 226 225 t

ToW al ket_n 0 700 291 403 423 230 245 219 312 322 329Sad fwanosg (mo 1)1 .373% 90% 2z6% 496% 511% 210% 42.6% 67.4% 7.S%Cumwiusl w4baSgrSi@o .373% i42% 19% 11.0% 196% 21.0% 24.1% 2t.2% 311%tRgiwnan66nnng0OAKPWVW 1.2% 5.1% 61% 77% &4% 9.1% 9.9% MM7% 11.4%Avg etenem on _9um 19oh2m 20Q 7.r%

i) Tow wan atowm tt d*W tsA mid in wwkn paJ as egi i atwage mdu we-slwnw 199406t9 2)Mes tViNsOW tt g iT

Taja boote l' iS ei92seem 2010.05 MU Inasll 1 1!S992-202 i l S amwiaLan tenmn IPan n aw5 446 Fctg Fcuncy 6 s f tmt 367%S&Llennm (Oam ltuaun ; Oan osles wialy2 Oemaey 2LtOttt ai 12a

- 139 - Annex 4.12 (b)*66331101 Page 6 of 6

ThS4 .:Uffu _i. 10

~~ '~~~ ±m im ~~~~~~i lman LMm

IBIU_tn 4 2 22 t9 0 0 0 0 0 0Ihonr,w owft 0 ~~0 00 a 0 a 0 0 5

NydtBptqeda ISO as as as 0 0 0 0 a 0aHV4it 0 0 a a a0 I * v 12 3B4Vai O 0 4 44 44 44 44 tTao 0 0 4' 4

TOW 0 350 t7 11 148 4 S 4A S3 SS 54

R0 0 5 S 0 0 a 0 0 arnwrnW aMm 0 ~ ~~~~ a a 0 a 0 0 0 3 I I

NYd"o q 350 85 as 85 0 0 0 0 0 0E4V4ift - 0 0 0 0 0 1 4 9 12 3T&O 0 0 27 27 27 27 27 27 27 29

Tosl 0 350 65 117 It? 7 28 31 36 *2 40

TOW_ tAlan 0 0 2 27 24 0 0 0 0 0 0

Th viuiOlft= 0 0 0 a 0 0 0 0 a 3 22yd wop eda a 7o r 170 170 170 0 0 0 0 0 0

EIN-o 0 0 0 a 0 0 2 7 17 23 aT&O 0 0 0 71 7t 71 71 71 71 71 75

Tola- 0 700 172 266 265 71 73 70 a e ? 103

GO.am wUiy shlwo * 5$0.%Averag.*4w.d 1997.2000 15.0% pa.Avwap want rtue, bng lnti dtbt. ormmnt t10.0% p.Avqnase n w rate. kiw% twntt de. Foneqn 50% p.-MAneage ttanw t rtme. In a WIg ei w. omtst 1Z0%O.aAv tax ruate. aena sake niy 1.0% p.4Escalat len. dty lam1 1996.200) 00% p.&O&SN eacuun tano, 50.0% p.-Anae daonaalo n quo 26% p a.

PRAtM mI aen vn 1gO. dot, tWlnen 2318729 * 7O nelAnkPInt at snre valuo 1990. USO mian o .250 lor rto nouonn 000g -atg e too. fixed aeas &tM olten 1goo 3900 dontUSOEm Ment.. ve tad V mpanwue 1900 S00 dtVUSO

Pit s ams t (I . Plnmt s n }( * R.evaJtttni (In * tvesn tM (Oe w) * Oel it-I) SnW a"g (I) Oa Dow rqnpsytn (I)R a g A Raed emngp (t.i) R Net e tni ntit (t)

Pianso t mnn ad ne PAtagrot. traxnam OMd delnjfl taeAverag tax rate caead to me ran na lexas (oln msowgo, peat NAverag nttea atoles aled htn W IM Ot,a

3EIectricity Sector, North Vietnam (PC1)

250

2100

0

.50

.100 1tA 992 1993 i7 (995 1996 1997 1995 19W9 2000

- (ninznen ... ta t _ajo d Ouc (ne)

C4'. 60%ewM.U0it 4WmloU9Ide - 140 - Amex 4.12 (c")Page I of 6

Tab's 6: Ini m It 46 5 t910t

iakeGWh) 677 681 2962 S 4 s 3 652 7me 767 66 9gm 976Av.'I9etaa¶66(U8h'l}Vli22671 750 7921 "a9 9314 10102 60942 t16 1262 13913Avw"g twtt(USVWWh) is 27 40 iS 62 70 70 70 70 70 70

Expotddufl"6 t92 200 553 648 710 701 72 m 7 $71 9on66 92 65 6C 60* 5s o tlS 65 0 9s 67

NWaiuIa 98* 1 1 1 24 21 34 46 4A 40Puel ad o2 i6 67 2 * 9 5 a 50.a.' 32 3S 34 3 7 33 2 a7 t1Coil siU6pOdCoW nai mouth 14 7 3 . 6 9 1 11 66

O&l. out 29 25 23 92 33 32 3 4 37 46 44 46C w oiJ83- t52 too 626 134 640 148 653 162 673 186lntmrt and dswdalds 0 0 20 325 318 39 45 41 43a 43 47TAAVS 2a 22 35 52 84 75 eS 92 600 609 667

Not inconi .616 .257 .2S3 .674 49 .21 .*9 14 2 74

Taws 2: Baatom Itui

F"Scal you m im i m li ±m i

Platiin simice.nd. revalaftn 3000 3700 39tl A4I4 4355 50 u23 5756 S1 6s 2 69h*fmaaoaamAgd 4 a lan 53 69* 293 4t4 5 61 Ws 9on 6110 323 1507

Owamg ant 2910 3561 340 3997 430? 42 44 45M 4740 Ago 568

Work In Por 9mTotal fixed u"es 2916 3566 3S 39 43 4453 "so4 46 474 9 s4*5 658a

CJa.IilAssets 0 0 0 0 0 0 0 0 00 aCa, and bailkC4~ &Ms mtoablCfvoonaww-a uo~w

Total astts 2916 3S66 36ee 399 4307 442 4A69 456 470 4* 51C2

Own tunis6 1416 636 1109 a9 79 67s 653 634 6AS 67 7?2Eowly 1433 640 4 48e 6*5s 140 1464 6408 6458 6cs I4aRelad "nop *ta6 42 * 513 .611 n735 *756 774 79 730 r659

Longtosrmdt 65C0 6s2 203 2335 266 26 27 243 2994 3162 3213G t ism5tO ISM i5sm Ism0 Ism5 6600 I5sm 600 Is5m i500 ism5Fixed oWdl hfd lRelabitiof) 0; o;qn 0 325 5JO 63 615 11923 1292 1343 144 I6d2 1713

Slhn&1tamdedtOmua 0 32 52r 76 910 6036 6073 t6 1144 6661 e 217

Total oauty Sd kabdl, 2916 3566 3665 3m97 4307 "12 4489 4568 4749 4901 5658

Tabl 3: Pwida fow t

r4gai v3 ml 3m m 3m 3m lif mm i

Intemst9 tatg 7 75 I66 234 338 466 53t 552 610 635 726No itot mm wuat .*6 .3 9 663 204 34 3165 390 4*7 do8 54Osa in 92 102 6 312 134 140 146 653 162 173 164

SoBromi" 0 6u 406 543 48 I" 607 I6 68 1696 t 40Long tam(Fe-i" uc c a 30 1 205 386 270 a 70 so I6 146 6IIS&ALtemm (on_mbiwcuwetic 325 206 230 214 s6 37 36 34 42 2a

Paid i eaucy(rdua) 2 47 .25 0 0 4 0 0 4 0 0 0

rotal funds avadblae 0 758 525 m am 6 636 670 756 016 t65

ll¶v"tnul 0 70 20 do 44 235 238 253 32 29 396Poeqen uiwe 0 350 t36 a5 248 644 55 672 24a 29 4Oornieltoata"y 0 m0 629 t9o t9o 91 78 66 ea 99 ;05

Dobw snviUl 0 0 26 325 37n 39 405 416 43 4*53 467Ro,wnt. l t la If MR"" 0 0 0 a 0 0 0 0 a

Aeoayi,qet8&t.tarnibans.dwnmga ~ ~ ~~0 0 0 a 0 0 0 0 0Iffiell 0 a 284 325 37S 39 40 All 431 S 467

roW oWitatim a 7o 52s m m on n 6am m a4 6Sdat finan two 447% .276% .62.6% 2V.5% 379% 4n6% 53.2% 66.0% 77.7%C9ewm eae4swnwvgsUao .447% .361% *26L.% .642% *8% 16% 607% 70% .7%Rafumnon qcpP.r d w Yewy 02% 2.6% 47% 7.6% 16% 6% 9.4% 9.7% 604%AnaM9? Mum on 692.900 10%

t) TOUta i nmMbwg a dar m 6 t au _ in hn M Domq t autq! w_ tu p .mart~911R06 Mu '61996 btP tg91

AT-p otelban openst p9|12 ISIU gtnt 2OQ iU90-19StLot5 IM FW n ft" M310 Od o_w wic 21I" Oe_s 2 0%SC tm Doomawon"mIL

TOWa

(na) -~ JO flIU -3UU r 031U -

OOD2 6661 3661 S61 9661 C661 pot C661 t661

00?-

0

00?

MU. /, 10108 P153 M

(MO 3130mife,. uc) Wmu ~ownJwa.3 @pSRI 31 W OWaW031UMOWIJ PUW ImmaumiM gl1dI aucd b9AWO Ws II l3d

(il sums. ON l- Ia) &Aam* pan" * U) dam,. en wU) W.Avw idS' 310C) fau t9(-I) MOO U ) MO0

U) all o *ust" U-O-S-AI Wj -- -0 I W31d

OSfIuop oesC 061UOEap 9U3 U! 9043 e&m13

3-u %z olm uoUow03idip d*Ay.- 0 %0'06 UDOI 1330 p"4WC%SZ ~ ~ (=got Ip I-^ VXIuan*3- e0 100 Z96611 P 4apm. 31 UU313.38 %o8' 410 ~3s Amummq. m etwiy~-a- %OZ, *Q1W315100 ULM513 65311 WIl m I mm"k 6Oba0y.3 e%0Ol U&30! vim IWO -gm.3 "we" *BOad y3d %0,01 WIAO 39WS g 3 aa ia.381W 0 W-aS661 P-P51PU9MAV

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- 146 -

Annex 4.13Page 1 of 2

Summary of Detailed RecommendationsTo Be Considered in Project Preparation for Loan ARPlications

(i) Rehabilitation of Thermal Plant

(a) Upgrade Pha Lai power station equipment especially in the areas ofboilers, combustion equipment, controls, chemical treatment and spares. Adetailed work plan is required based on an in-depth study of plantcondition, including non-destructive testing, etc. Likewise the trainingof senior engineers and skilled workers is an urgent priority to becarried out with an examination of staffing structure and managementprocedures.

(b) Examine the future role of Ninh Binh and Uong Bi power stations, with aview to using them for reactive compensation only, requiring limitedrefurbishment effort. If full refurbishment (costing ap to USS 30 millioneach plant) is contemplated a detailed plant condition study would berequired.

(c) At Thu Duc power station, a major plant refurbishment effort is needed toprepare for a long operating future. This must be preceded by a detailedplar. status examination and accompanied by a comprehensive stafftraining and development program. Provision should be made for theongoing need for imported spare parts and staff cevelopment. For Can Tho(Tra Noc) power station a detailed study of plant condition is also thefirst step to modernizing the unit.

(d) Gas turbine and diesel power station repair and re,instatement should becarried out based on the recent UNDTCD survey. Gas turbines in particularneed investment in intensive training of operators and maintenance staffand a regular supply of imported spares. An elite highly trainedmaintenance squad should be established, led by outside experts, toservice the needs of all gas turbines in Vietnam. Update the 1988 UNDTCDsurvey of diesel conditions in PC2 and PC3 and upgrade the units capableof contributing to future power needs.

(ii) Investigation of New Thermal Plant

(a) Appoint experienced and supportive outside advisers to assist theMinistry of Energy and the power companies in formulating specific plansfor future power station development. Utility twinning arrangements forthis topic and other modernization activities should be examined.

(b) In PC1, feasibility and outline design studies for a possible two unitextension of Pha Lai should be started in 1992, to allow for possible1997 commissioning. Power plant feasibility and mine development studiesshould also begin to examine the optional commissioning of the proposedQuang Ninh Power Station. To allow proper consideration of possible powerexport to China, tne real costs of mine and power station development andoperation and maintenance charges need to be calculated.

(c) In PC2, there is a need for outside assistance in preparing acomprehensive development plan, based on its own needs, to focus onpriority projects for international funding. Economic and technicalstudies of off-shore gas development should be performed to firm uptiming of its arrival on-shore. Connection of the proposed gas pipelineto Thu Duc power station is recommended. For security reasons the mainnew thermal plant for PC2 should be conventional thermal plant with dual-fuel (gas and oil) capability. The Ptu My 2 site looks best for thisdevelopment and detailed studies and review of site investigations shouldbe made immediately with a view to international funding and initialoperation in 1996.

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Annex 4.13Page 2 of 2

(iii) Hvdro Development

(a) Immediate assistance with the project management of the ongoing hydropower schemes at Thac Mo, Vin Song and Song Hin is required to helpidentify the resource requirements to build these projects in thestipulated time. An international panel of experts should also berecruited to review the remedial proposals for the Hoa Binh Project toensure the safety and integrity of the dam.

(b) More work needs to be done to refine the data base for the future hydrodevelopment projects to improve the basis of the estimates and establisha priority for development. In particular it will be necessary toidentify the environmentally sensitive factors to be taken into accountin planning and determine means of mitigation. Terms of reference forconsultants to assist in the program are given in Annex 13.

(c) Preparations should be made to take the Yali scheme to the detaileddesign phase by recruiting qualified international consultants. It shouldbe their aim to have full designs and cost estimates available forconsideration by funding agencies in 1994.

(iv) EHV. Transmission and Distribution Development

(a) It is necessary to perform a review of the technical aspects of the EHVline to determine the best approach for such a development. Specificallya desk study needs to be performed to examine both HVAC and HVDCalternatives with particular attention givDn to capacity upgrading, theneed for intermediate takeoff points, and the reliability and stabilityconsiderations.

(b) A comprehensive master plan for transmission and distribution needs to beundertaken without delay to provide the basis for standardization ofequipment design, to establish plans for implementation making most useof existing facilities and to establish future planning policies withregard to rural electrification. There should be also strategy for thedevelopment of system control and communications facilities taking intoaccount the possible reorganization in the sector.

(c) Substantial rehabilitation work can proceed (without waiting for a masterplan) design to reduce bottlenecks in the transmission system, tointroduce metering facilities both to domestic consumers and system wide,to reduce losses by upgrading Low Voltage networks and consumer supplies.

- 148 -

Annex 5

LIST OF ANN1S3S

CRAPTER 5 - RURAL AND WOUtSHOLD ENsUY SECTORS

ANMEX NO

5.1 Population dietribution and Density

5.2 Household Energy Surveys

5.3 Energy Efficiencies

5.4 Renewable Energy programsS.S Forestry Sector Energy initiatives

5.6 Prices of Appliances and other goods5.7 Recommendations for the Rural and Household Energy Sector

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Annex 5.1Page I of 1

POPULA!X0N DISTRIBUWXOK AND DUISITY

In the following table the descriptive nomenclature and statistical data aretaken from the "Economy and Finance of Viet Nam 1986-90" published by the VietNam General Statistical Office.

Region Population Area Pop. densitythousands sq km peru/sq km

North mountains 10,362 98,094 106and midlandsRed River Delta 13,923 17,321 804Central coast 8,843 51,228 173(north)Central coast 6,846 45,123 152(south)Central highlands 2,597 55,569 47South 8,020 23,474 342(north east)Mekong Delta 14,598 39,554 369

Total 66,233 330,363 200

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Annex 5.2Page 1 of 1

HOUSEHOLD ENERGY SURVEYS

A number of household energy surveys have been carried out in Hanoi and somenorthern areas.

The following is a summary of the mission information on the surveys which havebeen carried out:

1985: Survey of cooking fuels consumed by 200 families in the suburbs and ruralareas of Hanoi province. No results available.

1986s Survey of 30 rural households in Hanoi Province.

1987-90: Surveys of rural energy consumption, "at provincial level" in Han AmNinh and Vinh Phu.

1987: "Report on Daily Life Fuel at National level" (in Vietnamese).

1988-89: Survey of urban cooking energy consumption and forecasts of futureconsumption in inner areas of Hanoi City. The available extractsprovide figures for the average total useful energy consumption perhead per day. These were 550-650 kcal/head in the urban areas and650-700 kcal/head in the surrounding suburbs and rural areas.

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Annex 5.3Page 1 of 1

ENERGY EFFICIENCIES

A variety of energy efficiencies have been derived by the Institute of Energy andused for various calculations. In some cases there are considerable variationsbetween the figures used in different documents. The range found by the missionis given below.

Appliance Efficiency

Iron trivet 8-174Rice husk stove 12Charcoal stove 25Coal briquette stove 20-35Lump coal stove 20-22Kerosene stove 43-45Electric hot plate 57.5-70%Electric kettle 88Electric rice cooker 60

The upper end of this range appears high in comparison with values

obtained for open fires elsewhere. It has been noted, however, that theash from rice straw tends to form a wall around the fire, thus insulatingit from heat loss and protecting it from draughts. The retained heat inthe ash bed is often used for slow cooking and keeping food warm.

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Annex 5.4Page 1 of 3

RENEWABLE ENERY PROGRAMS

1. Renewable energy research is the responsibility of the Ministry ofHigher Education in cooperation with other organizations, including the Instituteof Energy, the Energy Center in Ho Chi. Minh City, Hanoi Polytechnic and Can ThoUniversity. The Research Center for Thermal Equipment and Renewable Energy(RECTERE) in Ho Chi Minh City Polytechnic produces and markets a range of wind-chargers and pumping windmills with outputs in the range 50-300 Watts. Otherthan this, there seems to be little significant or useful research being carriedout on renewable energy applications at present. A 2 year UNDP program(DP/VIE/87/023) for the support of renewable energy research has been proposedbut has not yet been approved.

Improved Cooking Stove Proorams

2. The Stoves Division of the Institute of Energy has been engaged ina program of development and dissemination of improved cooking stoves since 1985.The Division has a staff of 8 persons and a total budget of 2 million dong permonth. Three basic stove models- wood, coal and in-situ clay/cement - have beendeveloped but dissemination is still at an early stage. Judging by experienceelsewhere, there are likely to be considerable problems in the dissemination ofthe wood stoves, especially in the rural areas.

3. Laboratory tests show that the coal stove has an energy efficiencyof 30% compared with 25% for that marketed by the Research Center for CoalProcessing and Utilization. This is because the Energy Institute stove has athicker wall which reduces heat losses and increases the temperature in the fire,thus improving combustion. It also has a longer life. Provided its performancein practice is satisfactory, this stove would appear to have a reasonableprospect of becoming popular if an effective dissemination program can bedeveloped. About 200 of these stoves have been made and distributed asdemonstration models in the Red River Delta and the north of the country. It isalso intended that a stove press will be installed in Thauh That district, about100 km to the south west of Hanoi, in early 1992. The press costs about 1million dong and can produce about 50 stoves per day. The intention is that theDistrict Authority will make and sell the stoves at a price of 5000 dong each.

4. The third type of stove is built in situ from clay and cement and isdesigned for burning rice straw. It has three pot holes and a chimney and areported energy efficiency of 25%. A program for the dissemination of thesestoves began in 1991 and envisages the installation of 50 demonstration stovesin the village of Huong Nquai in Thach That Districtl about 20 stoves have

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Annex 5.4Page 2 of 3

so far been installed. Training workshops are also being held for stovebuilders. The aim is to install the stove in all the houses in the village andthen to wilen the program to the other villages in the district. Experienceelsewhere suggests, however, that this type of elaborate stove is likely to makelittle headway in competition with the cheap, versatile and familiar trivet.Although users may welcome it at first, it tends to fall into disrepair and israrely rebuilt when it reaches the end of its working life.

5. Other stove programs are reported to be under way in the Departmentof Architecture at Hanoi University and the Forestry Research Institute. It isalso reported that an improved coal stove has been successfully disseminated inBac Thai with up to 10,000 being made commercially by local artisans.

Micro-Hvdro in Bac Thai Province

6. In early 1990, the Hydraulic Bureau of Bac Thai Province, which liesjust north of Hanoi approached CIDSE, the international NGO consortium based inBrussels,!/ for assistance with a program of 80 small hydro and 250 micro-hydroinstallations.

7. A pre-feasibility study of the Bac Thai proposal was carried out bytwo consultants from Irntermediate Technology Consultants during late 1990.The study remains confidential but it ie known suggestions were made for therevision of the proposal, selection and survey of sites for a number of pilotprojects, and certain other institutional arrangements. As of this writing, therevised proposal had not yet beer submitted to the Hydraulic Bureau.

Other Proarams

3. At the Institute of Enerav in Hanoi, there are a number of disusedsolar collectors and driers on the roof. There is also a small sail windmillwhich pumps water to supply the WC. There is no monitoring equipment. Somelaboratory flask experiments in bioga. production are being carried out. At theEnerav Center in Ho Chi Minh city, there is an indoor display of severalwindmills but no active research appears to be under way.

Work in Viet Nam, Cambodia and Laos is handled in CIDSE#s Dubtln offiee in conJunction with the IrishNGO Trocaire t16, Booterstown Avenue, DubLin, Ireland; telephon 353 1 2885 385). In Vietnam, contactcan be made with the offico of CIOSE in Hanoi [76, Hang Trong Street, Hanoi; telephone 42 54 971).

I Intermediate Technology Consultants, Nyson House, Railway Terrace, Rugby CV21 3HT, UK; telephone 44 788560631.

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Annex 5.4Page 3 of 3

9. At Can Tho University, a number of concrete biogas digesters havebeen built, some of which are producing gas. The prefabricated concretecomponents for a number of other digesters have, however, badly deteriorated withsevere apalling and cracking indicating their unsuitability for practical use.The prospects for widespread dissemination of any of the models appeared to beextremely poor. The most promising was a 30 cubic meter digester using wastefrom a group of pig-pens; such digesters, if they prove technically reliable andeconomically justifiable, could be relevant in large pig-farms. Solar researchat this center has been suspended.

10. In total, it is reported that about 2000 domestic biogas units havebeen installed. Of these, 700 were in Ho Chi Minh City where few, if any, arein now use; the low level of pig-keeping among urban families and hence the lackof feedstock was a major reason for the failure of this initiative. No detailedinformation on the remaining installations was available, but the impression wasthat they had largely fallen into disuse.

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Annex 5.5Page 1 of 3

FORESTRY SECTOR ENERGY INITIATIVES

1. The Ministry of Forestry (HOF) has overall responsibility for forestpolicy, planning and research. It has direct responsibility for 1.7 millionhectares of forest land. -The remaining 12.3 million hectares of forest are underthe provincial forest services. The final implementing agencies are the forestenterprises of which there 360 in the country; of these 60 come directly underthe MOF and the remainder under the provincial services.

2. Deforestation is taking place rapidly in Viat Nam for a variety ofreasons. Agricultural expansion is the primary cause in many areas; additionallosses are caused by commercial logging and cutting for timber, poles andfuelwood. It is reported that there are now nearly 8 million hectares of barrenland.

3. A government proclamation in 1982 allowed the transfer of certainbarren lands to village or commune cooperatives for forestry purposes and almost2 million hectares of such transfers are reported to have taken place. A varietyof programs to distribute seedlings and encourage tree growing have been carriedout but few data appear to be available on the results. There have also beennumerous programs to replant mangrove areas in the south and other barren lands.Survival rates are good in Ho Chi Minh province but are reported to have beengenerally poor elsewhere. Some programs in the south have run into problemsbecause of antagonisms between forestry officers and local people. Deliberateburning of plantations by local people is said to be a significant problem insome areas.

4. The World Food Programme (WFP) has carried out a number of largeprojects. A 4-year project (No 2780) which began in 1986 had a target of 70,000hectares of plantation in three provinces in central Viet Nam. Prior to this,about 70,000 hectares were planted under other (WFP) programs in the south. Afurther 5-year project, with a budget of $20 million in food aid, was scheduledfor the period 1989-93. A UNDP-funded program (VIE/86/227) for fuelwoodafforestation in different ecological zones is at present under way. Its mainobjectives include the establishment of 1650 hectares of demonstration fuelwoodplantations on denuded and degraded lands in 12 different areas in fourprovinces; collection of information necessary for planning large-scale fuelwoodplantations, including data on fuelwood supply and demand; introduction ofimproved woodstovest creation of an extension unit within the Forestry ResearchInstitute; and training in nursery techniques.

156 -

Annex 5.5Page 2 of 3

Biomass Fuel Su2 _lv and Demand Analyges

5. A comprehensive Forestry Sector Review (VIE/88/037) is presentlybeing carried out by UNDP/FAO. This project commissioned studies of biomassenergy supply and consumption of which the draft reports were produced in 1991.

6. The consumption study entitled "Consumption of Biomass Fuels" waocarried out by Auke Koopmans, a consultant to FAO. This study relied heavilyupon a 1987 report in Vietnamese "Report on Daily Fuel Life at National Level"which was made available to the consultant. The consultant notes that it was theonly household fuel consumption available. Other surveys have, however, beencarried out (see Annex 5.2).

7. The 1987 report indicates that the average fuel use was 2.5 kg ofwood-equivalent per day in mountainous areas; in the deltas and coastal plain.it was 1.5 kg of wood-equivalent; and in the cities it was 1.35 kg. In addition,an estimated 4.4 million tonnes of wood-equivalent were used for pigfeed.Allowing for population growth and adjusting these figures in the light of otherdata, the calculated breakdown of domestic energy for 1989 was as given below:

Wood 20.98 (50.3%) million tons of wood-equivalentCharcoal 0.11 (0.3%)Residues 17.78 (42.6%)Electricity 0.74 (1.8%)Kerosene 1.24 (3.0%)Coal 0.82 (2.0%)

8. The supply study entitled "Fuelwood and Energy Sectoral Review:Fuelwood supply analysis" was carried out by K.M. Gray, a consultant to FAO.This study was designed to complement the consumption analysis and was carriedout concurrently. The consultant notes, however, that though the overallquantities of energy consumed are the same in both reports, different definitionsof residues have been used.

9. This study notes that deforestation is taking place at a rapid ratein Viet Nam, principally as a result of shifting cultivation but also because offuelwood consumption. It calculates that a sustainable yield of 12.7 milliontons of wood per year can be obtained from natural forests, existing plantationsand scattered trees. It assumes that the use of residues for fuel isunacceptable on environmental grounds and must be replaced by fuelwood. Thisresults in a calculated fuelwood "deficit" of 20.2 million tons per year in 1989rising to 26.7 million tons by 1998.

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Annex 5.5Page 3 of 3

10. The report recommends a program of tree planting "on a massive scale"to deal with this deficit, estimating that this would cost about $3 billion overa five-year period. It recognizes that this is unlikely on practical grounds,but suggests a compromise program, still involving major tree planting but alsofocusing upon improved cooking stoves and promotion of substitutes fuels such aselectricity and kerosen,- "possibly encouraging kerosene use through market pricesubsidy as an interim measure." The study also points out that growing trees forfuel cannot be justified economically because of the low fuelwood price, whichis likely to persist as long as there are low cost or free natural forestresources available and suggests that markets -for higher value wood products willhave to be found in order to provide the necessary cross-subsidy for the woodfuelproduction.

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Annex 5.6Page 1 of 1

PRICES OF APPLIANCES AND OTHER GOODS

Some typical prices of energy appliances and other domestic goods in Hanoi inNovember 1991 are given below.

Kerosene wick stove 20,000 - 22,000 DongKerosene pressure stove 45,000 Dong

Single ring electric cooker 35,000 DongDouble ring electric cooker 50,000 - 60,000 Dong

Trivet 2,000 Dong

Domestic fan 140,000 Dong

B&W television 1,140,000 DongColor television (small) 3,350,000 DongColor television (large) 5,890,000 Dong

Bicycle 350,000 Dona

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Annex 5.7Page 1 of 2

Recommendations For the Rural and Household Energy Sector

The actions and studies recommended for the rural and householdenergy sector are as follows:

(a) assemble and review the available survey data on household energyconsumption in urban and rural areas. Identify information gaps whichneed to be filled. Design and execute appropriate surveys in priorityareas;

(b) provide training to local staff on energy survey techniques and dataanalysis. This is highly important as present survey and analysistechniques are cumbersome and in some cases counter-productivel;

(c) carry out a study of domestic electricity consumption patterns andthe likely impacts of tariff increases on family incomes as well as theeconomic, social and environmental implications of possible switching toother fuels such as coal or kerosene;

(d) study the potential for energy ;nterventions, such as increased coalavailability and improved cooking stoves, in the energy-scarce areas ofthe Red River delta'

(e) review the major ongoing and proposed activities in renewable energyto determine priorities for R & D and immediate-term applications, and toidentify specific areas where external assistanf:e is beat focussed;

(f) review forestry sector activities, especially those being carriedout under the present UNDP/FAO programme, with a view to identifyingpotential areas for support or joint actions with energy activities;

(g) carry out a more detailed study of the possible medium and long-termeffects on soil fertility and structure of the high rate of removal ofcrop residues for use as fuel in the Red River Delta;

(h) obtain more definitive data on the sustainability of woodfuelssupply to HCMC in the originating provinces, including the structure ofwoodfuel trading between provinces, in order to obtain indications of theneed for preventive and/or remedial actions;

(i) examine in more detail the destruction of mangrove forests and dryland in the South to ascertain the extent to which this is an energy issueand whether there are any available energy initiatives to ameliorate the

The practice of including animal and human muscle power in energysurveys is one example. Roducing energy demands to end-use quantities, basedupon highly debatable assumptions about conversion efficiencies, is another.

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Annez 5.7Page 2 of 2

situation;

(j) obtain technical assistance to draft a comprehenmiva national ruralelectrification plan, includlng assistance on fozmulating the appropriatelegiulative and regulatory framework for maximLzing local communityparticipation.

- 161 -

LIST OF AN=8

C3APTBR 6 - VIROCNIENSiRL ISUES

AIMu NO

6.1 Coal Mining disturbed Area and Production6.2 Incremental Environmental supply coat. from Coal Mining6.3 Ineremental Environmental Costs of Hydroelectric Plants6.4 Incremental Environmental costs of Thermal Plants6.5 Mangrove Management

- 162 -

Annex 6.1Page 1 of 1

COAL MINING DISTURBED AREA a,ND PRODUCTION

Mine Disturbed Area 3 Year AverageProduction Production

(ha) ('000 T) (T/yr/ha)

Hon Gal Coal CompanyNuibeoc 1 105Hatu8/ 615 1 741 944

Cam Pha Coal CompanyDeonaia/ 335 1 440 1 433Coc6a/ 305 3 387 3 702Cao Sons/ 405 1 124 925Khe Chami/ 39 210 1 795Khe Tama; 40 33 (2 yr) 415

Coal ComDanv No. IIINui Hong 50 331 2 207Khanh Hoa 61 254.8 1 416Na Duong 115 375.8 1 090Nong Son"/ 25 71 947

TOTAL 2 095 1 505

a/ Existing mine on which it is not necessary to pay compensation.

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Annex 6.2Page 1 of 1

INCREMEnTAL ENVIRONMENTAL SUPPLY COSTS FRON COAL MINING

At various real diccount rates, based on an average productivecapacity of about 1500 t/yr per disturbed ha in Viet Nam (see page 1), thefollowing costs are estimated (US$/t, 1992 prices)s

---- REAL DISCOUNT RATE----5% 10% 15%

Existing Mines:a/Compensation 0.50 0.50 0.50

New Mines:Compensation 0.50 0.50 0.50Reclamation 0.36 0.42 0.50TOTAL 0.86 0.92 1.00

Compensation payments would only be paid on new mines and on Nui Hong,Khanh Hoa, and Na Duong mine. These three mines represented 13% of 1990production.

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Annex 6.3Page 1 of 2

INCRUIENTAL ENVZRONIENTAL COSTS OF HTDROULUCTRXC PLAITS

Investment scenariost

CORE :core plan to comply with anticipated regulationENCORE senhanced plan with additional mitigative actions

Plant Capacity -- CORE and ENCORE--E-----ENCORE------Resettle- Compenma- Invest- Recurrent

ment tion Mont(mW) (S m) (S m/yr) VS m) (S m/yr)

* Da Nhim 160 0.00 0.00 7.00 0.70* Tri An 400 0.00 0.00 55.53 5.55/* Hoa Binh 1 920 0.00 0.00 71.64 5.970/* Thac Ba 108 0.00 0.00 0.00 0.00* Thac No 150 9.00 5.15 28.60 2.20* Song Hinh 66 0.45 1.88 10.04 0.77

* Yali 700 2.18 3.23 82.01 7.46Ham Thuan 300 0.00 1.72 16.64 1.28Can Don 60 0.00 0.10 37.84 3.44Pli. Krong 150 0.00 3.23 41.91 3.22Da M1 160 0.00 0.18 14.96 1.36Dong Nal 8 252 5.00 0.25 99.52 9.05Son Lab/ 3 600 56.20 25.40 301.82 25 .15c/

TOTALS 72.84 41.13 767.50 66.15c

Vinh Son 66 - no estimates available -

NOTE t all costs expressed in 1992 US$.a Incremental to other upstream management investments (Dong Nai 8 for Tri

An; Son La for Hoa Binh).bI High water level - 265 mC/ Excluding China. Costs in China are estimated to be an additional US$247

million in investmer.t expenditures and US$20.6 million/year in recurrentexpanditures.

* Included in the Base case Investment plan for 1992-2000.

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Anesx 6. 3Page 2 of 2

sON La HuTomwLcRIC PRo1 TC - ERIO AND LOW RE336O R OPTIONS

Low High

Reservoir FWL (meters) 215 265Catchment Area (km2) 45 730 45 730Son La StatLon Capacity (.3) 2 400 3 600Area Flooded (ha) 27 500 50 800Cultivated Area Flooded (ha) 7 979 10 199Populatlon ln Flooded Area 90 100 112 400

OE Scenario fminimum ulani:Resettlement Costs (USS million) 45.05 56.20CompenuatLon Costs (USS milLion/year) 13.75 25.40

- capital Cost (UsS/kW) 18.77 15.61- Recurrent Cost 5USS/yr/kW) 5.73 7.06

NCSO Snar Unhaned rennW l21Resettlement Costs (USS milion) 45.05 56.20Compansation Costs (US$ mllion/year) 13.75 25.40Watershed gmt-. Investment (US$ million)' 301.82 301.82Watershed Ngmt. Recurrent (USS milLon/yr)W 25.1S 25.15

- Capital Cost (US$/kW)4/ 12S.76 99.45- Recurrent Cost (US$/yr/kw)' 16.21 14.04

aI Excluding ChLna. Costs ln China are estimated to b}i an additional US$247

million in investment expenditures and US$20.6 million/year in recurrentexpenditures.

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Annex 6.4Page 1 of 1

INCRENMETAL ENVIRONMENTAL COSTS OF THERNAL PLANTS

Investment scenarios:

CORE : core plan to comply with anticipated regulationENCORE : enhanced responsive planENCORE*: Sensitivity case allowing for strategic use of high sulphur

fuel.

Existing Plants

Capacity CORE ENCORE ENCORE*Notes(MW) ($/kW) ($/kW) ($/kW)

* Ninh Binh 100 90 170 170 (P/PW/PW)* Uong Bi 104 90 170 170 (P/PW/PW)* CanThoGT 20 0 0 0P 440 20 90 100 100 (P/PW/PW)P Thu Doc 1/2/3 165 0 s5 175 ( /N/NS)QCanTho ST 33 0 0 0• Thu DocGT 45 0 0 0* Ba Ria GT 40 0 0a

Sub-Total Investment (US$ million) 20.16 86.93 107.56

New PlantsCapacity CORE ENCORE ENCORE*Notes

(MW) ($/kW) ($/kW) ($/kW)

• Ba Ria ST 56 0 0 0* Ba Ria C-C 100 0 0 0• NewC CC 360 0 0 0* Phu My Gas 300 0 25 25 ( ININ)Phu My Coal 600 120 185 230(PW/PWN/PWNS)Pha Lai B 220 120 185 185(PW/PWN/PWN)Quanh Ninh 1 000 120 185 185(PW/PWN/PWN)

Sub-Total Investment (US$ million) 218.40 344.20 371.20

TOTAL INVESTMENT (US$ millC2*6T.56 431.13 478.76

Notes indicate the type of equipment being installedPt Particulate emission controls.We Water treatment and/or recycling.Ka kNOx emission controls.st Sulphur emission controls.

* Included in the Bas case Investment plan for 1992-2000.

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Annez 6.5Page 1 of 1

1. As an adjunct to the work conducted relating to the environmentalaspects of energy supply, a brief review was also undertaken of how recentregulatory changes might have an effect on the potential use of mangroves as asource of biomass energy potential. Mangroves are currently being harvested forcharcoal, and some have suggested that the only effective means of stopping thisis by banning charcoal harvesting. These suggestions were based largely onobservations of mangrove degradation which occurred prior to changes in forestryregulations and other economic factors. The most effective means of controllingmangrove degradation in the future must also take into account that: (i) recentchanges in the forestry regulations assigns property rights to mangroves to localusers; (ii) domestic trade liberalization provides added incentives toaquaculture; and (iii) external trade liberalization provides added incentivesto export mangrove as pulpwood.

2. Under the Act of Forestry Protection and Development (enacted by theNational Assembly on August 18, 1991), individuals, cooperatives, or statecompanies have been allocated specific property rights to mangrove areas. Theone restriction is that clear-cutting is not allowed. Selective cutting isallowed, exports of wood are permitted, and all foreign exchange earned may bekept by the owner, including foreign exchange earned from shrimp exports. Themost favorable economics for any of the mangrove management options involve somecombination of sustainable wood production and aquaculture. Shrimp breedingreadily yields returns in excess of 2,000 kg/ha/yr which, at currentinternational shrimp prices of US$6/kg, provides a potential annual income ofabout US$12,000/ha. The system is biologically sustainable, however, only if atleast 80% of the mangrove system remains intact, hence most management systemselsewhere in Southeast Asia have only kept 15% to 20% of the mangrove in shrimpculture. Under such a model, annual returns to one hectare are about US$2,400for the shrimp and about US$125 for sustainable chipwood production (assumingchipwood prices of approximately US$40/i3 and an annual increment of about 4m3/yr). Clearcutting the stand would yield a one-time benefit of about US$3,200(US$40/m3 * 80m3) for chipwood production, and less than US$1200 for charcoalproduction (current mangrove wood prices for charcoal are less than US$10/i3).There is hence a strong economic incentive to maintain the sustainable income ofabout US$2500/yr. This suggests that there are strong economic pressures in thedeveloping market economy to maintain some level of sustainable production fromthe mangroves. At current prices, there is an incentive to export chipwoodrather than produce charcoal for domestic use. Depending on how charcoal pricesand chipwood prices move, much of the mangrove harvest may never find its wayinto charcoal markets.

3. These factors suggest that effective charcoal supply from mangrovesmay indeed decline, but not necessarily through imposing bans. A more immediateand effective management priority should be to support the land tenure reformswhich are occurring under the Act.

- 168 -

LIS'r OF ANNEXES

CHIAPIER 7 - INSTITUTIONAL AND FINANCIAL DEVELOPMENT

ANNEX NO.

7.1 Regulation of the Energy Sector7.2 Terms of Reference - Review and Modernization of the Financial

Management Information System, Energy Companies, Viet Nam

- 169 -Annex 7.1Page 1 of 2

Reculation of th Eneroy Sector

1. Most advanced industrial countries have found it necessary to put inplace a regulatory structure to oversee the activities of major utilities,such as telecommunications and electric power. The argument for regulation isbased on the assumption that utilities are uniquely placed to extractexcessive rent from their clients because typically they are naturalmonopolies and can anticipate little if any threat to their revenues from theactivities of alternative suppliers. Very often , the presence of a shortageof supply of electricity or telephone lines, means that profits can remainhealthy in the face of inadequate investment, insufficient service and poormanagement performance. Many utilities are also in declining industries andcan readily force out competitors.

2. Systems of regulition range from consensual systems designed to give thegovernment, through the regulator, a place in the decision making bodies ofthe industry, through to prescriptive methods of regulation where formulas areused to fix tariffs, or where specialist regulators have the power to demandlarge amounts of information on the activities of the businesses, to rule onthe proposed tariff increases. In the event that the utility is dissatisfiedwith the decision, it is usually possible to appeal against the regulator'sdecision and this can result in courts reexamining the issues and changing thedecision of the regulator. The United States system is the most legalisticand the Japanese system is the most consensual.

3. While there is widespread acceptance of the need for a system ofregulation, there is frequently widespread dissatisfaction with the results ofregulation. Many industries in the United States saw their regulatory systemdismantled in the early 1980s and while subsequently the forms of service onoffer were very different, most consumers benefitted from lower pricesfollowing increased competition. Even in the industries regarded as naturalmonopolies, it has frequently proved possible to narrow the field of monopolyand regulate that, leaving most of the remainder open for entry by alternativesuppliers. New Zealand is currently moving towards an electricity system thathas been consciously constructed to minimize the scope of natural monopoliesand reduce the need for outside regulation.

4. In a post socialist society, such as Vietnam the dangers in thelegalistic approach, are many and there are advantages in minimizing the scopefor regulation. Vietnam has no established judicial system of the sort thatthe United States model relies upon and the concepts of law, objectiveevaluation, judicial independence, impartiality and officials independent ofpolitical authorities, are all concepts of recent origin. A system thatrelies on these even to a limited extent, creates an invitation to return toforms of prescriptive planning that have just been abandoned. Any officialperson or body will immediately be understood to be a governmentrepresentative and will be treated accordingly. Managers will quickly allowthe regulators to make all the difficult decisions and the benefits of greaterautonomy, implicit in the market reform process, will be soon lost.

5. This may be contrasted with a system built upon the assumption that allthe parties involved will seek out rents for themselves. Such a system willtry and create incentives for responsible behavior. As all players will beexpected to seek rents from local monopolies and temporary advantages, thereis a probability that rules requiring publication of costs, tariffs andvolumes, backed up by the power of an official body to conduct investigationsand intervene, with price controls, on an ad hoc basis, will be more effective

- 170 -Annex 7.1Page 2 of 2

in restraining rent seeking behavior within acceptable and constructiveboundaries.

6. The creation of a system of utility regulation will need to give carefulattention to the task of forming a structure of institutions in the electricpower sector to maximize the scope for competitive supplies of goods andservices, and minimize the need for regulatory bodies. And the regulatorysystem should include requirements for the publication of commercialinformation, interdependent investigation of complaints and the threat ofprice control.

7. One of the first decisions that needs to be made is on the nature of thestructure of the relationships between the government, the regulatory body,the power utilities, and the final consumers. The need is to find aninstitutional structure that utilizes existing strengths of the deliberativeor co-operative traditions of the society but which at the same timerecognizes the weakness of the judicial process and places greater reliance onmore impersonal market forces. The experience with ministerial regulatoryboards has not been particularly successful because inevitably the processbecomes bureaucratic and the final decisions highly politicized. On the otherhand there is little experience with the more judicial type of regulatoryboards in the developing countries where few countries have either thetraditions or the resources to effectively manage sach a process. The verysize and dominance of the large monopolies discourages the development ofinstitutions that would be independent and would rely more on market signalsand consumer response.

8. Thus the regulatory body would need to be a political body with broaderrepresentation of interested parties such as the small and large consumers,the financial community, environmental interests, the press, etc besides theproducers. The process should be designed to be open so that difficult andcontentious issues can receive an open airing- where users as well asproducers have a voice. But the effectiveness of this process will depend onthe information that is provided. Thus an effective secretariat is a necessitywhich will have and provide the necessary information and analysis to theboard. This informed, open decision making process is a necessary but notsufficient condition for an effective regulatory framework. There must also bea means of enforcement, of compelling a compromise on the contradictorypressures on the board. This is best achieved by the use of competitive forcesin the industry i.e the regulatory system needs to ensure that anyone willingto enter any aspect of the regulated business at his own risk and with his ownresources would be able to do so without being hindered by the existingdominant institutions. It will be essential for the government to establish acredible arm's length relationship with dominant supplier. It is true thatwith its superior access to information, substantial resources and experience,the dominant utilities will be in a strong position, but by widening the baseof the participation in the deliberative process, by ensuring that the processis open, accountability clear and adequate information available, thestructure can ensure a level playing field. It should also be clear that whilepolicy and regulation are closely related, it is the role of the government toformulate policy and provide the framework within which the regulars can work,and for the regulatory boards to implement the regulatory policies establishedby legislation.

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Annex 7.2Page 1 of 4

TOrms of Reference

Review and ModernIzation of the

Financial Manaaement Infozmtion Sytem. Enercy Comoanies. Vet NaM

HacksdaM1

The transition to a more market oriented economy is rapidly changingthe financial environment of the energy companies in Viet Nam.

The French accounting principles have been introduced with effectfrom 1 January 1990, but are not yet fully implemented. Mechanisms offinance are changing. In the future, sourcing of finance will have to bethrough equity and borrowing in foreign and domestic currencies. Furtherrevaluation of assets and changes to tariffs, depreciation regulationsetc. must be expected.

As the previous state companies are made independent with privateand/or public limited ownership, the energy companies have to becomefinancially accountable. New laws and regulations (licenses) have to befollowed. Presentation of company accounts and investment prospects willhave to be internationally credible in order to secure finance foroperation and investment.

The changes in the financial environment of energy companies in VietNam call for a review and modernization of accounting practices in orderto meet the new challenges emerging.

Oblective

The objective is to seek consultancy services to review and modernizethe financial management information system of energy companies in orderto provide more timely and effective financial reporting and analysesrequired by the companies as financially independent entities.

Scope of Work

The consultant shall review and design modernization of the FinancialManagement Information System (FMIS of energy companies to:

- provide the managers of energy companies with up to datefinancial and other information of key relevance in planning,controlling and reporting of the activities for which they areaccountable.

- provide information which would satisfy statutory, corporate andlicensing requirements.

- facilitate financial sensitivity analyses.

- 172 -Annex 7.2Page 2 of 4

The FMIS shall be integrated with the existing financial systems anddatabases.

Furthermore, the FMIS shall be an on-line computerized systemproviding real-time control of actual and budgeted revenues andexpenditures, cash flow, and balance sheet for each level of management.Also manual routines for data collection and data entry have to bedesigned and put in operation.

Standard cost and variance reporting including financial performanceindicators (return on equity, debt servicing ratio, self financing ratio,debt/equity ratio, accounts receivable, fixed assets/debt, workingcapital/short term debt etc.) shall be incorporated.

The accounting system and classification must _e flexible enough tocater for financial reporting of separate core business units (companydivisions and subsidiaries) and enable

The accounting system and classification must be flexible enotugh tocater for financial reporting of separate core business units (companydivisions and subsidiaries) and enable horizontal and vertical expansionand contraction to cater for planning and consolidation of corporateaccounts.

The sensitivity analysis shall be designed to forecast the effect ofcorrective measures and changes in key financial parameters includingalternative tariff policies, revaluation of fixed assets, foreign exchangerate fluctuations, debt rescheduling or changes to debt servicing. Thesensitivity analysis shall furthermore include an option to calculate theeconomic and financial viability of investment projects.

All the major energy companies shall be included in the scheme (i.a.PC1, PC2, PC3, Petrovietnam, Petrolimex, Campha, Hongai, Uong bi and Coalcompany #3).

Wo2rk Plan

The consultancy services required would be rendered in two phases:

1. Review and planning phase to deter-ine the system requirementsincluding software/hardware, revised system of accounts and animplementation plan.

2. Implementation and conversion to the new system includingassistance in the installation and training in the use of thesystem.

Phase I would include the following:

- Establish the financial information requirements of management.

- Clarify accounting regulations, standards and chart of accountsas determined by the Ministry of FLnance.

- 173 -Annex 7.2Page 3 of 4

- Assess to which extent the existing systems are meeting theaccounting regulations as well as current and future needs forfinancial information.

- Assess the existing computerized systems and facilities thatneed to be modified to ensure timely (real time or within nextmonth) financial reports.

I - specify the conceptual design of the new Financial ManagementInformation System.

) - Specification of phase 2 activities including budget.

Organization

The consultant will be contracted by the World Bank.

In phase 1, the consultant will meet with relevant governmentinstitutions and the management of the energy companies.

The consultant shall work closely with the financial manager andsenior accountants of the companies to develop formats and report contentsfor statutory, corporate and licensing requirements. The energy companieswill nominate personnel to work as counterparts to the consultant.

A steering committee of the project should be considered withrepresentatives from the Ministry of Energy, the Ministry of Oil, theMinistry of Finance, the Institute of Energy and the energy companies.

Phase 1 is expected to last approximately half a year and ro require15 person-months of work.

The consultant shall prepare a work plan for execution of the studyincluding organization and personnel schedules.

The personnel schedule should upecify the estimated timing of theassignment and duration in personnel hours of each profession to be usedby home office and in the field work. Curriculum Vita of each personproposed for the study as well as relevant experience, capacity andexpected work load of the consultant in the study period should beincluded in the proposal.

Re).ortilnq

The consultant will present a draft final report to the World Bankafter six months of work.

- 174 -Annex 7.2Page 4 of 4

Budcoet

Phase 1 of the project is tentatively cost estimated as US$450,000 asfollows:

Person-monthsUS

Consultancy feesProject Manager/Energy Economist 3Financial Analyst 6Computer System Design Spec$-list 6

Total 15 250,000Travel 50,000Per diem 75,000Report printing. copying PTT 25,000Contingencies 50.000

450,000