The Hanoitimes - Deputy Prime Minister Vuong Dinh Hue has requested the Electricity of Vietnam (EVN) to review loss-making projects to ensure investment flows for its production and business.
At the recent working session with the group’s representatives, the Deputy PM said modern technologies should be applied to reduce labour costs, electricity losses and increasing transparency in the power price calculation.
He also asked the national power company to propose tariffs based on true production costs this year. The move aims to ensure EVN’s profits and create favourable conditions to attract investment in renewable energies, and at the same time to curb inflation.
EVN should also clarify the results of its restructuring process of the past few years and its upcoming plans, including privatisation, divestment, building a competitive power generation market, human resources and technologies, he added. The group’s calculations show that its total production costs this year are expected to increase to more than 7.2 trillion VND (316.7 million USD) due to the fluctuation of coal, gas and oil prices.
EVN General Director Dang Hoang An said earlier this year that some input costs, especially coal, have increased continuously since 2015 but have not been calculated into electricity prices. Coal prices which rose 7 percent from December 2016 accounted for over 4.7 trillion VND of the total price increase.
However, EVN says it has set a range of plans to knock off costs of about 3 trillion VND from the projected increase. Last year, its total revenue reached 278 trillion VND, posting a 14 percent year-on-year rise. All units reported profits in 2016.
The deputy PM asked the group to focus on balancing capital every year in the 2017-20 period to save at least 10 percent a year. The ministry, EVN and relevant agencies plan to complete the privatisation process of Power Generation Corporations in the third quarter of the year.
Duong Quang Thanh, EVN Chairman, said it would apply automation at all units, especially power transmission and distribution. The Central Power Corporation has cut about 1,000 people from its payroll by installing two million electronic metres.
Translated by Tuan Minh