EVN Requested to Keep Power Price Unchanged This Year

Vietnamese Deputy Prime Minister Hoang Trung Hai has recently demanded the state-owned Electricity of Vietnam Group (EVN) to maintain power price stable this year at the expense of the power price hike roadmap approved by the government in order to fuel the national efforts to curb bourgeoning inflation.

 

The Vietnamese government will help EVN boost investment and speed up construction paces of power projects scheduled for operation this year to ease current power thirst, regardless of national efforts to tame inflation by tightening control over currency and narrowing investment in construction projects, Hai said.

 

The government official has asked state-owned commercial banks to ensure sufficient loans for power projects, and set up three inspection teams to securitize EVN's disbursement for sluggish power projects.

 

With current average power price of VND842 (5-6 U.S. cents) per kilowatt-hour, EVN's profit is estimated at between 3 per cent and 5 per cent per annum, which is rather modest against the minimal 12 per cent yearly to ensure normal operation of a power company, the daily said.

 

EVN is put in a dilemma as it is responsible for ensuring power supply for all localities nationwide at any situations, a source from the group said.

 

Unchanged power price is preventing investors to pumping capital in the electricity sector, which is partially blamed for current severe power shortfall in Vietnam, EVN noted.

 

Under an electricity price roadmap approved by the Vietnamese Government from January 1, 2007, average retail power prices rose by 7.6 per cent to VND842 (5-6 U.S. cents) per kWh and will again be bumped up by 4.5 per cent to VND890 (5.56 US cents) per kWh by July 1, 2008.

 

EVN has recently proposed to raise the power retail prices to VND917 (US$5.73 U.S. cents) instead of VND890 (US$5.56) to apply from July 1 this year; however, the proposal was turn down to facilitate inflation curbing. (Local sources)