Vietnam’s power prices high due to monopoly’s multi billion-dollar debt: official

By Anh Minh   June 22, 2017 | 02:38 pm GMT+7
Vietnam’s power prices high due to monopoly’s multi billion-dollar debt: official
The country's sole power supplier EVN has been asked to maintain stable supply to help achieve economic growth target. Photo by VnExpress

Electricity of Vietnam owes $9.7 billion, and often blames losses for hiking prices.

State-run power monopoly Vietnam Electricity (EVN), the country’s biggest debtor, has been told to spend wisely and avoid allowing its outstanding loans to dictate electricity prices.

EVN has $9.7 billion in outstanding loans with a government guarantee that covers 37 percent of the total. Most of the loans are with foreign creditors, a government spokesperson said at a meeting on Thursday.

Deputy Minister of the Home Affairs Nguyen Trong Thua said the debt was “a heavy burden” on the company.

“The debt is reflected in electricity prices and definitely keeps them high,” Thua said.

The meeting was held to ask the country’s only power supplier to maintain a stable supply to help the economy accomplish its growth target of 6.7 percent this year.

Thua said EVN should use its money more effectively and find ways to cut costs.

For example, it could apply technology to take meter readings rather than sending workers to climb pilons every month to take the readings manually, he said.

EVN often claims losses when asking for permission to raise prices, and did so for the last increase of 7.5 percent to VND1,622 (7.7 U.S. cents) per kWh in March 2015.

Retail prices have been unchanged since then, but wholesale prices were raised 2-5 percent in May last year.

The company reported a profit in 2016 with revenue jumping 14 percent from the previous year, but said that increasing prices for oil and coal will raise its costs this year by VND4.2 trillion.

No price hikes have been discussed.

The trade ministry said at a press briefing earlier this year that the government will “carefully” consider any proposed price hikes because they could stand in the way of its economic growth target.