EVN under scrutiny for serious operational and regulatory failures

In a detailed report published on July 12, the MoIT has called attention to a range of serious operational deficiencies within EVN and its affiliated entities, following a comprehensive 2021-2023 audit of the electricity supply chain.

The report criticises the organisations for delays in both the investment in and completion of the power grid, a crucial part of the country's infrastructure. In addition, it pointed out the lack of urgency in resolving issues with the turbine systems at several thermal power plants, which it suggests significantly reduced the system's overall capabilities.

The audit also found that the group had not adhered to key directives, specifically, Prime Minister Pham Minh Chinh's Directive No.29/CT-TTg and various guidelines from the MoIT regarding power supply plans. This disregard, the report states, resulted in unpreparedness in terms of power sourcing, leading to a significant reduction in energy security reserves.

Further breaches were found in the operation and regulation of the power system. It was found to be unbalanced during the mobilisation of different types of power sources at various times, in violation of national directives for the management and regulation of the power system during the dry season of 2023.

These shortcomings culminated in widespread, unplanned power cuts, which caused significant disruption. This was particularly apparent in the northern region from late-May to mid-June 2023. The suddenness and scale of these outages triggered public consternation and had a detrimental impact on residents' daily lives, business operations, and the overall attractiveness of the investment environment.

In response to the audit's conclusions, the MoIT has tasked the State Capital Management Committee at Enterprises with imposing strict disciplinary actions against EVN's Board of Members and other related individuals, in accordance with Party and state regulations.

In addition, it was recommended that Vietnam National Coal and Mineral Industries Group (Vinacomin) and Vietnam Oil and Gas Group (PetroVietnam) take immediate action to review their accountability measures and penalise any violations found.

The MoIT also insisted that the General Department of Energy, the Electricity Regulatory Authority, and the Department of Industrial Safety Techniques and Environment undertake a rigorous review of their inspection and supervision duties. This directive was designed to ensure any potential failings are addressed and that lessons are learned to avoid future violations and the resulting disruption.

The MoIT has now requested full compliance from EVN, PetroVietnam, Vinacomin, and all related entities in implementing measures to manage and operate the electricity supply more effectively. This includes proactive rectification of any identified issues, a commitment to accountability, and actions to prevent future power shortages or reductions.

This move follows the widespread power outages in the northern region in mid-2023, which prompted a stern directive from the prime minister and led to the formation of the special audit team to prevent such systemic failures from recurring.

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