The
Ministry of Industry and Trade has announced that state-owned Electricity of
Vietnam Group (EVN) lost VND10.162 trillion ($483.76million) in 2010.
This is the first time that EVN’s business
results have been made public.
The group incurred losses from its own
electricity production and trading, irrespective of the staggering loses
accumulated from speculative investments in other non-core sectors.
Last year, EVN’s electricity revenues totalled
VND90.934 trillion ($4.32 billion), equivalent to an average power selling
price of VND1,061.4 per kWh.
The group’s electricity production and trading
costs totalled VND101.096 trillion ($4.81 billion) over the year, equivalent to
an electricity cost price of VND1,180 per kWh.
The ministry noted that the costs had yet to
include spending of VND15.463 trillion ($735.9 million) to cover a disparity in
foreign exchange rates as well as a spending of VND356 billion ($16.94 million)
on taking over substandard rural electricity grids from local authorities in
2010.
In 2010, power generation costs topped the
list at VND78.498 trillion ($3.73 million); followed by power distribution cost
at VND16.208 trillion ($771.4 million). Power transmission was bottom of the
list for costing only VND5.626 trillion ($267.7 million) during the year.
The ministry attributed EVN’s losses to
decreased hydropower capacity, which forced the group to run oil-fueled
turbines at higher costs, in addition to buying electricity from China at
higher prices.
Sluggish construction of several power
projects and fluctuations in foreign exchange rates and fuel prices also added
to the situation, the ministry noted.
EVN general director Pham Le Thanh said the
electricity sector currently incurs a loss of VND300 per kWh in electricity
sales.
Thanh warned that if no drastic measures are
taken to deal with the group’s financial imbalance, it would find it
increasingly difficult to raise capital in the time to come and investors might
be discouraged from investing in power projects, particularly in the southern
region, adding to power shortages.
In order to help EVN overcome the situation,
Deputy Minister of Industry and Trade Hoang Quoc Vuong said that the group’s
losses would be offset by future power price hikes. He, however, did not
clarify the exact timetable for the electricity price rises.
Concerning EVN’s non-core business, Thanh said
that the group had planned to gradually withdraw all of its investments from
non-core businesses, especially telecommunications, with EVN Telecom to be
transferred to military-run Viettel telco.
EVN will withdraw its investment in
securities, banking and real estate during the next two years, he added.
Despite moaning over losses, EVN revealed that
its employee salaries averaged a whopping VND7.3 million ($347.4 million) per
month in 2009, while the earnings of top executives remains shrouded in
mystery.
For 2010, Thanh did not mention salary
expenditure but said that the aforementioned VND10.162 trillion
($483.76million) in losses represented 95 per cent of the group’s salary cost
during the year.
He added that employees in the electricity
industry found it difficult to afford to live in major cities with such
‘modest’ payment.
Minister of Labour, Invalid and Social Affairs
Pham Thi Hai Chuyen batted away the claims, saying they were unpersuasive and
that the ministry would inspect EVN’s losses further.
dtinews
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