The Vietnamese Politburo has upheld a recent award of a $125 million power plant contract to a consortium of companies led by the Japanese company Sumitomo in spite of claimed irregularities. However it has assigned government agencies to investigate the alleged irregularities in the bidding process, Dow Jones reports. The government also intends to review the current bidding regulations and will introduce new legislation to cover tenders.

The contract relates to the construction of a Pha Lai 2, a coal-fired power plant, which was awarded on 17 March to a consortium of Sumitomo, Stone and Webster, Mitsui Babcock and Hyundai. After the award there were reports about irregularities in the bidding process and of pressure from foreign diplomats.

The allegations were never clearly expressed. However then have frequently been complaints about the way deals appear to have been struck in Vietnam. The Asian Develop-ment Bank has been working with the Ministry of Planning to bring procedures in line with international practice.

Vietnam is currently experiencing blackouts as a result of a drought which is affecting the generating capacity of the country’s hydro-electric stations. Hydro plant accounts for 63 per cent of the national generating capacity. However the government is determined to keep its main power station, Hoa Binh, operating.

The hydropower station has a critical water level of 80m. The water level is barely above this. Officials have previously maintained that the plant must be shut down if the level falls below 75m. New coal-fired capacity will help reduce dependence on hydro.