HANOI – Vietnam‘s National Assembly voted on Tuesday to abandon plans to build two multi-billion-dollar nuclear power plants with Russia and Japan, after officials cited lower demand forecasts, rising costs and safety concerns.

The vote to scrap the country’s first atomic energy project deals a blow to the global nuclear business and to Japan’s drive to begin exporting reactors after the Fukushima disaster left its nuclear industry in a deep freeze.

The Vietnamese government said in a statement that the decision, made in a closed session of parliament after discussion of a government proposal, was taken for economic reasons and not because of any technological considerations.

Russia’s Rosatom and a consortium of Japanese firms led by private utility Japan Atomic Power were due to build the plants.

Members of the media, wearing protective suits and masks, receive briefing from Tokyo Electric Power Co. (TEPCO) employees (in blue) at TEPCO’s tsunami-crippled Fukushima Daiichi nuclear power plant. (Photo: Reuters/ File Photo)

The estimated investment needed for the projects had doubled since 2009 to nearly 400 trillion dong ($A24 billion), state media Tien Phong quoted Le Hong Tinh, vice chairman of the National Assembly’s science, technology and environment commission, as saying earlier this month.

The Vietnamese government is fiscally strapped as public debt lingers near the permitted limit, curbing its ability to maintain Vietnam as one of Asia’s fastest-growing economies through spending.

Growth in power demand in Vietnam is also forecast to slacken.

When the government approved plans for the two plants in 2009, growth in Vietnam‘s annual power demand was projected at 17-20 percent.

Duong Quang Thanh, chairman of state utility Vietnam Electricity group, was quoted by state-run Voice of Vietnam radio recently as saying that annual growth between 2016 and 2020 was now forecast at 11 percent, and 7-8 percent through 2030.

Vietnam‘s decision to scrap the project is a further setback for the nuclear industry as countries from Germany to Indonesia have decided to either pull out of nuclear energy or cancel development plans in the wake of the Fukushima nuclear disaster in Japan in 2011, the world’s worst since Chernobyl in 1986.

– Reuters