VietNamNet Bridge – When Prime Minister Nguyen Tan Dung signed the decision to appoint Hoang Quoc Vuong, Deputy Minister of Industry and Trade, as the Chair of the Electricity of Vietnam (EVN)--he has put Vuong to the test.

Deputy Minister of Industry and Trade resigns to become EVN President

EVN is a powerful power group in charge of providing electricity to the national economy and the society. It has been running a lot of power plant projects which provide electricity to the national grid. Especially, it remains the only wholesale buyer and the distributor of electricity in Vietnam.

However, though being a powerful group, EVN is facing a lot of big difficulties which would require a lot of time and exertion to be settled.

The noteworthy thing in the Prime Minister’s decision is that Vuong would resign from the post of the Deputy Minister of Industry and Trade to focus on his new duty. In the past, in similar decisions, officials of the state management agencies were kept in their office while undertaking a new task at the same time.

The post of the Chair of EVN had been vacant for a long time since February 3, 2012, when the Prime Minister dismissed the then President Dao Van Hung.

Hung and some other senior executives of EVN are believed to take responsibility for the heavy losses of EVN Telecom, a subsidiary of EVN, which has merged into Viettel.

In the last seven months, the works of a president were undertaken by EVN General Director Pham Le Thanh.

A lot of EVN’s problems would be passed to Vuong for settlement. These include the huge accumulative loss worth tens of trillions of dong.

The big loss has been attributed to many reasons, including the dong/dollar exchange rate fluctuations, the high input cost and low sale power price (EVN had to use the electricity from oil-run plants, which had high production costs, due to the sharp increase of the additional charge at some moments), and the big loss at EVN Telecom.

Regarding the power transmission lines, EVN now possesses an old transmission network, which causes a high percentage of power loss during the transmission, at over 10 percent.

EVN, the national power group, which has the task of ensuring enough electricity for the nation, has drawn up a lot of power generation projects, which are now in “confusion of sixes and sevens.”

A lot of hydropower projects have been delayed due to many reasons, including the environment problems. Vietnam considers building coal run and gas turbine run power plants, but these would cost billions of dollars a year. Meanwhile, it is getting more and more difficult to borrow money from banks, once EVN still has not paid off its old debts.

The input cost increase has forced EVN think of raising the electricity retail prices. However, under the current regulations, with the State still keeping control over the power price, it would be not easy to raise the retail prices.

When Vuong was in the post of Deputy Minister of Industry and Trade, he drafted the financial mechanism to be applied to power projects. Vuong had not finished yet the draft when he was told to move to EVN. So a question has been raised that if the new deputy minister to take the office would facilitate the implementation of EVN’s power projects?

Vuong would also have to face the Song Tranh Hydropower plant’s problem. Too much bad reputation has been spread out about the project since it kicked off the field work. Scientists have affirmed that developing Song Trang hydropower plant would be a blunder, and if the project continues, it would cause immeasurable consequences.

So, Vuong would have to make a decision on whether to continue the project or stop it, which would certainly cause a headache to the new EVN’s President.

Pham Huyen