Garbage crisis looms over Vietnam's Da Lat as financially exhausted waste plant threatens shutdown

Green Energy Environment Co., Ltd., the plant's investor, said Friday that it had submitted a document to the Lam Dong Department of Agriculture and Environment seeking permission to suspend operations of the plant, located in Xuan Truong Ward, from 12:00 am on October 1.

The company said its finances had been depleted, leaving it without sufficient resources to keep the facility running.

The plant has received an advance payment equivalent to VND300,000 (US$11.40) per metric ton of waste since April 2024, including value-added tax, leaving it with VND277,700 ($10.60) per metric ton after tax, according to the company.

The rate is only enough to cover basic expenses such as fuel, food and workers' wages, while machinery maintenance, internal road repairs and employee benefits have largely been put on hold.

Most of the plant's workers are ethnic minority people, and any delay in wage payments due to late disbursements by the wards could trigger collective resignations, leaving the plant short of stable manpower, the company said.

The company said it has also faced mounting pressure from old debts and enforcement proceedings.

Before April 2024, when the waste treatment rate was VND461,000 ($17.50) per metric ton, the company was able to maintain operations and repay more than VND37 billion (US$1.40 million) owed to the Lam Dong Investment and Development Fund and over VND14.5 billion ($548,000) in civil judgment enforcement payments.

However, after the rate was reduced to VND277,700 per metric ton, the company said it could no longer repay its debts, while interest continued to accrue on outstanding loans.

The Lam Dong Investment and Development Fund and other creditors have asked authorities to seize and dispose of the company's assets to recover debts, according to the company.

The company acknowledged that continuing operations under the current conditions could push it toward bankruptcy, as its equity continues to decline and could turn negative.

This is not the first time the plant has sought to suspend operations, but the issue has recurred over the years whenever problems arose with the treatment rate or payment procedures.

Since early 2026, service contracts have been signed on a monthly basis after waste is handed over, resulting in longer disbursement times and putting additional pressure on the company's cash flow.

The potential shutdown could also create difficulties for waste collection and treatment in many wards, which generate about 270-300 metric tons of household waste each day.

If the plant stops operating on October 1, the waste will have to be sent elsewhere for treatment.

According to Thanh Nien (Young People) newspaper, local residents are concerned that waste could pile up in residential areas and on streets, causing foul odors and affecting residents' daily lives, health and the appearance of the tourist destination.

Before the Da Lat solid waste treatment plant began operating, household waste was taken to the Cam Ly landfill, about five kilometers from the ward's center, for burial.

The Cam Ly landfill is now closed after becoming overloaded and experiencing environmental problems. 

The Lam Dong administration has asked relevant agencies to prepare a plan to reopen it temporarily to store waste if the treatment plant suspends operations.