Vietnam: EVN told to propose realistic tariffs

Vietnam: EVN told to propose realistic tariffs

Deputy Prime Minister Vương Đình Huệ has asked the national power company, Electricity of Việt Nam (EVN), to propose tariffs based on true production costs this year.

The move aims to ensure EVN's profits and create favourable conditions to attract investment in renewable enegies, and at the same time to curb inflation, Huệ told EVN representatives in Hà Nội on Wednesday.

EVN should also clarify the results of its restructuring process of the past few years and its upcoming plans, including privatisation, divestment, building a competitive power generation market, human resources and technologies, he added.

EVN calculations show that its total production costs this year are expected to increase to more than VNĐ7.2 trillion (US$316.7 million) due to the fluctuation of coal, gas and oil prices.

EVN general director, Đặng Hoàng An, said earlier this year that some input costs, especially coal, have increased continuously since 2015 but have not been calculated into electricity prices. Coal prices which rose 7 per cent from December 2016accounted for over VNĐ4.7 trillion of the total price increase.

However, EVN says it has set in motion a range of plans to knock off costs of about VNĐ3 trillion from the projected increase. Last year, total revenue reached VNĐ278 trillion, posting a 14 per cent year-on-year increase. All units reported profits in 2016.

The deputy PM asked the group to focus on balancing capital every year in the 2017-20 period to save at least 10 per cent a year.

The ministry, EVN and relevant agencies plan to complete the privatisation process of Power Generation Corporations in the third quarter of the year. The group is requested to review loss-making projects to ensure investment flows for its production and business. Modern technologies should be applied to reduce labour costs, electricity losses and increasing transparency in the power price calculation.

Dương Quang Thành, EVN's chairman, said it would apply automation at all units, especially power transmission and distribution.

The Central Power Corporation has cut about 1,000 people from its payroll by installing two million electronic metres.

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Link to Original Article: http://www.vir.com.vn/evn-told-to-propose-realistic-tariffs.html

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com