Hiep Phuoc Power Company is set to hold direct negotiations on Wednesday with over 90 enterprises in Hiep Phuoc Industrial Park in Nha Be District in bid to reach a compromise for power pricing.

Power company threatens to cut electricity, enterprises on a hot tin roof

Tran Thi Kim Tuyen, an executive of Hiep Phuoc Industrial Park Joint Stock Company, told the Daily on Monday that the crunch talks would be held at the industrial park after a number of enterprises raised objections to a suggestion by the power firm to increase the power price by 3.3 times compared to the stipulated level.

Apparently, Hiep Phuoc Power submitted its suggestion to the city government and the Ministry of Industry and Trade for increasing the price to 20.16 U.S. cents (around VND4,000) per kWh from early April.

This price is 3.3 times higher than the current stipulated price of only VND1,242 per kWh.

The price suggested by Hiep Phuoc Power will be agreeable to the fuel oil price in the global market at US$650 per ton and the power producer will change the price in accordance with the global oil price, according to Hiep Phuoc.

Early this month, Hiep Phuoc Power said it could only afford to operate its power generators until the end of this month because of increasing costs. As a result, it had also threatened to render the power plant idle as it cannot sell power at only five cents per kWh.

The company said it had incurred huge losses of up to US$120 million over the past few years.

Meanwhile, many enterprises buying power from Hiep Phuoc are also showing their discontent with the power company’s price hike proposal as they said the increasing costs will adversely affect their production.

For instance, Xuan Mai Paper Company in Hiep Phuoc Industrial Park in a document sent to related agencies said if Hiep Phuoc Power raises the price to over VND3,000 per kWh, the company will have to pay an extra VND600 million a month, and that will put the company in a difficult position.

The conflict of interests between the power producer and its corporate clients may be partly solved at the negotiations.

Meawhile, according to a document sent to the Ministry of Industry and Trade last week, Nguyen Trung Tin, vice chairman of the city government, asked the ministry to approve the suggestion for increasing the power price to help Hiep Phuoc Power maintain supply for Tan Thuan Export Processing Zone, Hiep Phuoc Industrial Park and Saigon South urban area.

In the long term, the city’s vice chairman asked the ministry to instruct Vietnam Electricity Group, or EVN, to seek other solutions for selling power directly to the enterprises in the industrial park, export processing zone and the southern residential areas.

Source: SGT