Cash-strapped
Electricity of Vietnam could push power prices up 10 per cent next year as the
energy giant bids to get its hands on enough cash for new power projects.
The state-run Electricity of Vietnam (EVN)
recently announced it incurred an aggregate loss of VND23.5 trillion ($1.1
billion) in 2010, with $388 million coming from its electricity business and
another $747 million stemming from exchange rate differences.
Deputy Minister of Industry and Trade Hoang
Quoc Vuong said the group’s losses would be offset by future power price hikes.
However, he failed to give an exact timetable for the electricity price rises.
The group’s losses were attributed to the lack
of water at hydroelectric plants because of droughts which caused the EVN to
depend upon its oil-fired plants and to procure power at a higher cost from
other sources. Other reasons cited were the price of fuel, exchange rate
fluctuations and slow progress in the construction of some power plants,
according to EVN’s report.
Pham Le Thanh, general director of EVN, warned
that if no drastic measures were taken to deal with the group’s financial
imbalance, it would find it increasingly difficult to raise capital in future
to secure sufficient power supplies.
Thanh raised the alarm again last week, saying
Hanoi was threatened with a power shortfall of 15-20 per cent next year because
of slow progress in the upgrades and development of a power transmission line
systems and transformer stations.
However, despite its huge losses and
reportedly capital shortage for invesment in power generation projects, EVN is
now ranked third among state-owned economic groups and general corporations in
terms of investment into non-core businesses.
EVN employees’ average monthly pay also
reached VND7.3 million ($353) in 2009 compared to the country’s average wage of
$137 as reported by the Ministry of Labour, War Invalids and Social Affairs
(MoLISA).
The MoLISA also reported that in 2009,
Vietnam’s per capita income just stood at $67 per month., with the figure in
the highest-income class topping at $164. EVN has invested in banking and real
estate, among others but most of these investments have had a bitter aftertaste
for the electricity behemoth.
EVN is, for example, a strategic shareholder
in Ha Thanh Securities Company, a firm whose losses amounted to VND111 billion
($5.2 million) as of June 30.
Phuong Thu | vir.com.vn
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