VietNamNet Bridge – Since 2007, the Electricity of Vietnam, which was on the watch of President Dao Van Hung, many times stirred up the public with its events, ideas and actions.
EVN in the reign of President Dao Van Hung

EVN in the reign of Dao Van Hung: time of power cuts

EVN in the reign of Dao Van Hung: the telecom, finance disillusion

Son La hydropower plant – the pride of EVN

Analysts have commented that the best thing that EVN could do in the reign of President Dao Van Hung was the success of the Son La hydropower plant project.

This is a key national project, the biggest ever hydropower plant in Vietnam with the expected capacity of 2400 MW and the output of 10.2 billion KWh per annum. Son La has the designed capacity bigger by 500 MW than Hoa Binh hydropower plant, which was once considered the Number 1 project in South East Asia.

The power plant still needs some more works to be completed, but with just four out of the six power generation units now under operation, it can provide 5.2 billion KWh to the national grid already.

On December 19, 2011, the fourth power generation unit of the Song La plant successfully joined the national electricity grid. It is expected that the fifth unit would generate power by April 2012, and the sixth by August 2012.

Under the initial plan, Son La Plant would be completed by 2015. However, EVN believes that the project would be completed by the end of 2012. If so, the investor would be able to save up to 1.5 billion dollars.

Giving back 13 thermopower plant projects to the government

In 2008, EVN stated that it would “give back” the government 13 thermopower plant projects. In other words, it refused to undertake the 13 projects assigned to it by the government.

With the total capacity of 13,800MW, the 13 plants accounted for 1/3 of the total projects EVN has to undertake. All of them are the key projects that need to be put into operation in 2006-2015.

EVN refused to undertake the 13 projects because of the lack of capital. The economic group was assigned to implement 40 projects which needed 43 trillion dong. However, it could arrange 36 trillion dong only.

Due to the low electricity prices and high inflation, commercial banks turned their back to the EVN’s proposal to borrow money. Meanwhile, the investment rate of coal run thermopower plants is very high, 1.2-1.4 billion dollars per 1000 MW.

New idea: a super-company in charge of buying and selling electricity

In 2007, EVN submitted to the government the plan on setting up a joint stock company in charge of buying and selling electricity. Under the plan, the company would have the chartered capital of one trillion dong.

Seven powerful economic groups and general corporations would contribute 49 percent of the company’s chartered capital, while EVN would hold 51 percent of chartered capital.

The noteworthy thing was that the 51 percent would include the capital contribution from power generation plants and power distribution companies

However, the project immediately faced a strong opposition from the public and experts, who said that the model would turn the joint stock company into a super-company which enjoys the monopoly in power distribution. In this case, benefit conflicts would occur, while the electricity prices would be controlled by the shareholders, the power generators but have the right to define the retail prices.

Owing money right and left

There have been no official statistics about the debts owed by EVN to other economic groups.

PetroVietnam in 2011 stated that EVN was owing 14 trillion dong to it. The oil and gas national group repeatedly asked EVN to pay money, and even asked for the intervention of the Ministry of Industry and Trade.

Due to the financial problems, EVN owes 2 trillion dong to the Vietnam Coal and Mineral Industries Group. It has also delayed the payment of the debt worth 40 million dollars to the Hiep Phuoc power plant.

EVN and the Ministry of Industry and Trade have stated that if the government does not allow EVN to raise the retail electricity price, it would not be able to pay debts.

Raising electricity price continuously

Since 2007, the electricity price has been increasing steadily.

The retail price increased to 842 dong per KWh in 2007, then to 890 dong per KWh in July 2008. After that, the price rose to 948 dong in 2009, to 1058 dong in 2010. In 2011 alone, the electricity price increased two times, to 1242 dong in March and to 1304 dong in late 2011.

Pham Huyen