Skepticism and criticism have built up soon after a Vietnamese company unveiled a US$1.1-billion plan to capitalize on the Red River, by developing a crammed network of six new power plants and seven ports along the waterway artery of the northern region.
The ambitious plan proposed by a unit of real estate conglomerate ThaiGroup, which also involves dredging half of the 556-kilometer river to ease movement, has been submitted to the government.
So far the Ministry of Planning and Investment has backed the plan, but many government agencies are concerned about its environmental impacts and feasibility, local media reported.
The project aims to transform the river, which runs from Lao Cai Province down to Nam Dinh Province, into a complete transport system. What is controversial is the proposed network of ports and hydropower plants.
The company plans to build six hydropower plants in the upper reaches of the river, between Phu Tho and Lao Cai Province, with a combined capacity 228 megawatts.
Seven ports will be also built in Hanoi, Lao Cai, Phu Tho and Yen Bai.
According to the plan, 70 percent of the projected cost will be covered by loans, and construction will be started this year and finished in 2021, if the company acquires the approval.
The Ministry of Finance questioned the developer's financial capacity, saying with its registered capital of VND1.2 trillion, it will not be able to fund 30 percent of the project by itself.
Headquartered in Hanoi, ThaiGroup recently made local headlines after striking a $165-million deal with Park Hyatt to develop a hotel in Hanoi. Its subsidiary Xuan Thien, which will handle the development, is best known for hydropower and cement projects in Africa.
The Ministry of Natural Resources and Environment said Xuan Thien needs to submit a detailed report on environmental impact assessment in details and how it is going to prevent or reduce possible impacts.
Several critics have too voiced their concerns about the project's negative effects on the ecosystem and livelihoods. Xuan Thien reportedly claimed it will have "almost no impact" on the Red River and only directly affect around 600 people in Lao Cai and Yen Bai.
Nguyen Canh Dinh, former senior official managing water and public water works in Vietnam, told Tuoi Tre newspaper that while the project's benefits are unclear, it will "surely" affect the Red River and its ecosystem.
He urged the government and the investor to take cautions with the project, especially its environmental impacts.
The Vietnamese government is looking to reduce the country's dependence on hydropower, following claims of mismanagement at many local plants and their environmental damages.
Since 2012, hundreds of existing and planned hydropower plants, mostly of medium and small size, have been reviewed. The government scrapped nearly 420 proposed plants at the end of 2013.
The total generation capacity of the country is expected to reach 42,300 MW this year. Hydropower plants account for 30 percent, according to media reports.
Speaking at the government's press conference that same day, Nguyen Xuan Tu, a senior official with the Ministry of Planning and Investment, confirmed that the project will have "certain effects" on the environment.
However, he said, the investor will have to conduct further studies on the project, if receiving the government's approval.
Only after relevant ministries review and approve detailed reports on its feasibility and impacts, the investor can launch its construction work, according to Tu.
"We support initiatives, but it does not mean any proposal will be approved. Every investment project has to be scrutinized in accordance with the law," he said.