EVN warned to carefully weigh up price hike

September 13, 2011 | 16:23

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State firm Electricity of Vietnam has been warned to take cautious steps with its proposed power price hike plan.

Later last week, Minister of Finance (MoF) Vuong Dinh Hue forwarded a 15-page document to the Minister of Industry and Trade (MoIT) Vu Huy Hoang outlining relevant proposals concerning taxes, fees and prices of diverse commodities groups including electricity.

In the document, the MoF chief agreed in principle to revise power prices to help the power sector become more financially healthy. However, the move must be in step with the current macroeconomic situation.

Hue said power price revisions should not be set on a quarterly basis.

Hue said the state group (EVN) should join efforts with the MoF and MoIT to draft an overall power price plan.

Besides, the draft must take into account power price hike implications on the society and diverse production sectors with the ministries having specific input before being rubber stamped by the prime minister.

MoF chief’s move came several days after EVN said it had a critical capital shortage.

EVN said it owed millions of dollars to its business partners. Besides, some international credit organisations expressed concerns over EVN’s mounting debts would badly influence the state group’s efforts to call for investment.

The MoF chief said the MoF agreed for EVN to distribute losses derived from dong-dollar exchange rate differences in light of current regulations. If the losses stopped EVN from getting foreign loans, the MoF required the EVN to report it to state bodies including the State Bank for government help.

Hue, however, urged the state group to cut down expenditure, make transparent cost estimates relevant to power production and distribution and take measures to raise people’s awareness about power efficiency and conservation.

>> Power price hike proposed

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