EVN not in danger of losing money
25-JUL-2008 Intellasia | Vietnamnet
Jul 25, 2008 - 7:00:00 AM
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The Electricity of Vietnam (EVN) has been complaining that it is lacking capital for power projects, and insisting on raising electricity prices. However, deputy minister of Industry and Trade Bui Xuan Khu asserted that EVN is not suffering losses, and its situation is not so tight that it must raise electricity prices.
Khu said that the plan on electricity price increases in 2008 has been delayed to serve the priority task of fighting inflation. However, this does not mean that EVN is losing money.
He said that EVN has the habit of complaining, while in fact, it is making profit.
Khu said that the minister of Industry and Trade Vu Huy Hoang has decided to set up an inter-ministerial taskforce to inspect the electricity supply of EVN. The taskforce will be responsible for checking the electricity supply, the electricity cut schedules, investment capital in power projects. Moreover, the taskforce will check if EVN is losing money as it claims.
The electricity shortage has become more and more serious in the last few years. When the dry season came, EVN sent the message that it would be unable to provide sufficient electricity to meet the demand, which always increases sharply in May, June and July.
EVN said that in July 2008, the demand for electricity may reach 7.1 billion KWH. Though EVN has mobilised all electricity sources, the total usable capacity of the system remains very modest. With the real demand of 230 million KWH a day and the peak capacity of 12,500 MW-12,800MW, EVN is lacking 1,500-2,500 MW from 7 am to 9 pm.
EVN general director Pham Le Thanh said that the group is lacking capital to carry out power projects. EVN's investment portfolio in 2008 includes 40 power source works, and 200 220-500KV electricity grid projects. However, the investment plan has failed due to financial difficulties caused by the slow equitisation process. Thanh said that a lot of credit loans have been cancelled as banks required high interest rates or refused to provide loans.
EVN said that business in the first half of the year was unprofitable. Meanwhile, with electricity prices lower than those in the region, Vietnam cannot attract investment in power projects.
On June 23, the State Audit of Vietnam began checking EVN's operations to find out the truth about its production, transmission, receipts and expenditures. The government will refer to the audited results to decide whether to allow EVN to raise electricity prices.
Six enterprises in HCM City have sent a petition to the Vietnam Standardisation and Consumer Protection Office, stating that the regular electricity cuts have damaged their production plans.
The six companies, all located on Vo Van Van road in Tan Tao ward in Binh Tan district, said that electricity has been cut regularly recently without notification in advance. This has led equipment to break down, while the companies cannot fulfill contracts they have signed with partners.
Nguyen Thi Ngoc Thai of the Vietnam Standardisation and Consumer Protection Office said that the office has received over 10 calls from production workshops and households, complaining about the electricity cuts.
Thai said that the office is ready to represent people to appeal or initiate legal proceedings against electricity companies because the companies cut electricity without notification in advance.
Thai said that the office has only received petitions, while it has not yet received any proposal on initiating proceedings from people.
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