Last week Vietnam Electricity (EVN) released a report that it had suffered a loss of nearly VND10.16 trillion (US$484 million), for the first time.
This matter was discussed in all seriousness at the National Assembly session on Nov 21 and solutions sort.
Raising electricity prices is the only way to help Vietnam Electricity Group (EVN) to cover its losses incurred during 2010, said an EVN official.
“We are buying electricity at a high cost but selling at a much lower price, hence we incur losses,” said Pham Le Thanh, general director of EVN.
Concerning the fact that the public had raised the question of high income of power sector employees, the EVN chief said the average monthly wage of an EVN employee in 2009 was VND7.3 million, which fell by 5 percent in 2010.
Nguyen Huu Quang, standing member of NA Committee for Finance and Budget, replying to SGGP, confirmed that these figures and remarks were the result of an audit conducted by a team of officials from the Ministry of Industry and Trade and the Ministry of Finance.
People are worried at the possibility of raised electricity prices in wake of the present inflation, he added.
Vietnam Electricity (EVN) will withdraw all of its investments from non-electricity businesses in the next one to two years, and the loss of these ventures should not be counted in the losses of EVN, said Nguyen Huu Quang
“The losses from other sectors, including telecom and financial investments, are excluded,” he added.
For instance, the EVN Telecom Company, which operates under EVN, will be transferred to Viettel Corporation. EVN will also withdraw all capital from the banking sector.
However, Quang said that electricity prices must comply with market economy and if the cost of production is too high, the government can not continue to insist on charging lower rates. The solution lies in people saving on consumption of electricity.
“Details about the time and price for the new electricity rates cannot be unveiled now,” he told SGGP.
The Ministry of Industry and Trade has completed a draft circular to regulate the competitive power market including responsibility for all buyers and sellers.
The players will include companies that buy and sell electricity, generate electricity, operate an electricity system, transmit electricity and manage electricity usage.
However, a large majority of the NA deputies did not agree with EVN justifying its losses by attributing to lack of water in hydroelectric plants after droughts, causing EVN to depend on its oil-fired plants to procure power at a higher cost from other sources. Other reasons cited such as the price of fuel, exchange rate fluctuation and slow progress in construction of some power plants were also rejected.
Deputy Tran Du Lich said that managing organs have to make clear all the losses of EVN. He added that funds for power transmission were alarmingly limited, as the National Power Transmission Corporation had only managed to mobilize 50 per cent of the total funds needed for electricity projects over the next five years.
“The hike should have materialized sooner,” said Lich, adding that the wait for the state-run power monopoly audit sheet release has caused delay.
Nguyen Van Giau, head of NA Committee for Economy said that since there have been seven levels to calculate the power bills, not all the end-users enjoy subsidies.
Regarding the fact that the electric bill rose 9 percent rather than 6.9 percent as pledged last year, the NA deputy said the law of supply and demand should be applied and the ratio of subsidy from the government be slowly reduced so that EVN can deal with the problem of hike in market price and not jeopardize power security.