The State-owned Electricity of Vietnam Group (EVN) is estimated to make a profit of VND3.5-4 trillion (USD167.8-191.8 million) this year, one official has said.
Dinh Quang Tri, EVN Deputy General Director, said power prices will be gradually increased in the following years
Dinh Quang Tri, EVN Deputy General Director, said at a press conference on December 3 that the expected profits could be enough to offset the losses from 2010.
The group’s VND8 trillion (USD383.5 million) loss in 2011 would be offset by profits of the following years, Tri noted.
According to him, as of December 31, 2011 EVN had also suffered losses of over VND26.7 trillion (nearly USD1.3 billion) from the disparity between foreign exchange rates and the cost of taking over deteriorated power transmission lines in rural areas. Such losses have yet to be included in power selling prices.
He said that EVN has received the Government’s approval for its plan to deal with these losses through 2015, which means that in order to offset those losses, EVN would gradually increase power prices in the next few years.
This year, EVN says they have only increased their prices modestly in order to prevent a shock to the national economy.
“We have yet to submit a plan for power price hikes for next year. We still want to assess power generation conditions and targets,” Tri said. He shared that this year’s power output is up approximately 10% from last year.
“EVN will surely make profits this year but their returns will be used to offset losses of over VND8 trillion in 2010 and a part of loss in 2011. The group expects the profits to continue in 2013, and gradually cover the losses,” he emphasised.
Prices not to float in 2013
Do Gia Phan, Vice Chairman of Vietnam Standards and Consumers Association (VINASTAS), said power prices should not be floated until a competitive power distribution market has been established.
Given the current situation, the Government should continue to regulate power prices, he added.
He said that the adding of expenses for upgrades for rural power grid and power price subsidies for remote areas to power selling prices is inadequate.
“Such expenses are part of the Government’s development policies and should be covered with other funding sources, and not by price hikes,” he proposed.
He worried that the country may not meet its target to set up a competitive power distribution market next year as it needs more time for careful preparation.
Regarding EVN’s plans to settle its debts, Tri said the group has signed an agreement with the State-owned Vietnam Oil and Gas Group (PetroVietnam) to repay its debts gradually. The deadline for payment has yet to be decided, and depends on PetroVietnam’s financial situation.
EVN is speeding up procedures for the issuance of bonds worth VND9 trillion (USD431.4 million) in the next three or five years in order to get capital for debt settlement, he added.
