Termination of Land Lease Contract for Billion-Dollar Project
According to the Construction Newspaper, on October 7th, Mr. Nguyen Van Hoa, Vice Chairman of Can Tho City People’s Committee, signed a decision to establish a Task Force for the termination of the land lease contract for the Song Hau 2 Thermal Power Plant project.
Previously, in July 2024, the Ministry of Industry and Trade issued a notice to Song Hau 2 Power Company Limited regarding the termination of the BOT contract for the Song Hau 2 Thermal Power Plant project.
The BOT contract was signed on December 29, 2020, between the Ministry of Industry and Trade and Toyo Ink Group Berhad, a member of Toyo Ventures Holdings Berhad from Malaysia (the investor), and Song Hau 2 Power Company Limited (the project enterprise).
Song Hau 2 Power Company Limited is a 100% subsidiary of Toyo Ink Group Berhad.
Regarding this project, Mr. Tuan Haji Ir. Yusoff Bin Daud, Chairman of Toyo Ventures Holdings Berhad, stated that the company had endeavored to arrange funding for the project and received credit support from EXIM-Bank Malaysia.
“We are making every effort to ensure the success of the Song Hau 2 Thermal Power Plant project. This is a historic project for our group. Toyo Ventures Holdings Berhad has also received support from the China Energy Investment Group,” Mr. Tuan Haji Ir. Yusoff Bin Daud shared in the annual report published in January 2024.
Challenges at the Song Hau 2 Thermal Power Plant Project
The Song Hau 2 Thermal Power Plant project was expected to significantly boost the power supply for the Mekong Delta region. However, due to years of delays, the termination of the land lease contract and the settlement of financial obligations will help the locality free up resources and prevent land resource wastage.
Song Hau 1 Thermal Power Plant.
The Song Hau 1 project, with an area of 126 hectares and an investment of over VND 45 trillion, was completed and began commercial operation in July 2022.
The Song Hau 2 project, with an area of over 117 hectares and a total registered capital of more than VND 74 trillion (equivalent to USD 3.2 billion), is invested by Toyo Ink Group and implemented under the BOT model.
According to the initial plan, Unit 1 of the project was expected to commence commercial operation in Q2/2021, with the entire plant operational by Q2/2022. However, as of late 2025, the project has not completed land compensation, resettlement support, or secured funding for implementation.
According to a report by the Can Tho Export Processing and Industrial Zones Management Board, on December 31, 2020, the People’s Committee of Hau Giang Province (now the Department of Agriculture and Environment of Can Tho City) authorized the Department of Natural Resources and Environment to sign the land lease contract with Song Hau 2 Power Company Limited.
As per the agreement, the investor was to receive land in two phases, with complete handover of the site by June 2022. However, after nearly four years, the project has yet to commence due to land clearance and financial hurdles.
The Song Hau 2 project affects 689 households, with a total compensation and resettlement budget of approximately VND 887 billion. To date, 600 households have handed over their land, accounting for about 92% of the area, while 89 households remain, corresponding to over 9 hectares.
According to the Can Tho Export Processing and Industrial Zones Management Board, the investor has transferred nearly VND 560 billion to the former Hau Giang Province, including VND 216 billion for advance payment for the resettlement area and VND 343 billion for compensation. The shortfall has disrupted payments to affected households.
The Management Board of the former Hau Giang Industrial Zones has advanced an additional VND 337 billion for continued payments, but over VND 23 billion remains unfunded. Despite completing the resettlement area and allocating plots, the project cannot proceed due to incomplete land clearance.
Local leaders stated that terminating the land lease contract is essential to reclaim the land and attract new investors with the financial and technical capabilities to effectively utilize the Song Hau Power Center infrastructure.
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