I received the private message below on 17 July 2023. It came as a great shock to me. 

Dear Gotyou,

I work in a foreign owned 1200MW coal fired power plant company in Vietnam and I support your honest effort in revealing truth. I wish to bring your attention to your most recent writeup on the cash flow projection of Jaks Resources Bhd. Your projection assumed uniform revenue from the power plant. This assumption is invalid as the IRR would have exceeded the maximum of 12% allowed by the Vietnam government (Circular No.:56/2014/TT-BCT dated December 19, 2014).

The snapshot below is a table of capacity charges of a 1200MW coal power plant under a Vietnam BOT contract for 25 years concession period. The capacity charge rates in the table are not uniform but reducing over the years. This is contrary to the general belief that Vietnam power plants under special concession like Jaks Hai Duong power plant will provide constant revenue stream for 25 years. I attached a few snapshots to assist you in your computation of revenue. Please do not publish the snapshots as these are confidential information. TQ

XXXXX

I searched for the circular (https://thuvienphapluat.vn/van-ban/Thuong-mai/Circular-No-56-2014-TT-BCT-method-of-determination-of-electricity-generation-costs-272089.aspx?v=d) and found "The internal rate of return (IRR) does not exceed 12%".

I am NOT ABLE to check the authenticity of the tables and formula provided to me as the information is confidential.

I performed a calculation check assuming 25 years of uniform capacity charge rate using the first year's rate from the table and the computed IRR was 16.34% !

The IRR computed base on the various charge rates provided by the table was 11.37% which is below the threshold set by the Vietnam government.

I can't provide detail information on the charge rates. All I can reveal is that the capacity charge rate gradually reduced by half mid way through the concession period and further reduced to one third towards the end of the concession.

Although there is NO ASSURANCE that the capacity charge rates for JHDP follow the same pattern as the rate table provided to me, I hereby declare that my previous article (below link) may be inaccurate as the assumption of uniform stream of revenue from JHDP is likely invalid. If so, the revenue from JHDP will decline gradually over the concession period. 

As the decline in capacity charge over the concession period is quite substantial, so is the reduction in revenue of JHDP.

I apologize for my mistake and I wish to thank the message provider for this very important information. I wish more kind people can share more confidential information with me. Sharing is caring. I promise not to disclose anything without your consent.    

​https://klse.i3investor.com/web/blog/detail/gotyou/2023-07-13-story-h-245713930-WHAT_YOU_DON_T_KNOW_ABOUT_JAKS_RESOURCES

It is your responsibility to perform independent verification on the information provided herewith.

Thank you for your attention.

Gotyou

This article is purely for educational purposes. This is not a buy or sell recommendation ! You should consult your dealers or remisiers before making any decision.

​

​

​

​