Electricity of Vietnam (EVN) submitted a proposal to hike power prices months ago. However, speaking to the media on the sidelines of the National Assembly meeting on Monday, Deputy Prime Minister Hoang Trung Hai said power prices will not be adjusted in November. He told assembled reporters that the Government is waiting for the audit result on power prices of the electricity group before any decision on pricing is made.

The Government’s Decision 24 allows EVN to adjust power selling prices by a maximum of 5% based on changes in input costs. Is there any reason why the Government has not approved a power price increase?

Deputy Prime Minister Hoang Trung Hai: The group can suggest power price increases based on its financial balance. However, the final adjustment rests with the Government’s authority, through the consideration of related agencies. The Government has to balance power prices in accordance with macro-economic stability, inflation and social security.

What are your thoughts on a number of investors complaining that power prices that are restrained below production costs in the long term can lead to other consequences, such as lacking capital for power investment?

They are right. The Government is prioritizing power industry restructuring and calling for private investment in this sector. EVN is currently holding 64% of the national power system, but the State group cannot satisfy the annual additional demand for 4,000-4,500 megawatts of power generation, requiring US$8 billion. Three power generation corporations under EVN have been established and will be equitized when the market has developed. The next step is to restructure power prices. Still, the job will face many challenges given the current economic difficulties.

The Government once decided to halt equitization of power companies. Should this be considered a backwards step because the equitization can be done right when the projects are being made?

The new projects can be equitized from the beginning. The Government’s decision to halt equitization was to wait for corporate restructuring to be completed. Equitizing power plants separately may create unfair competition because each plant has its own characteristics. Therefore, the Government has grouped the country’s power plants in three corporations similar in scale to ensure the success of the power market.

Will power prices be increased this month or next moth?

Normally, EVN could have made the decision. However, due to the troubled economy, inflation must be curbed and macro-economic stability must be ensured. Therefore, power prices would not be increased this month as decided by the Prime Minister. The Ministry of Industry and Trade must publish the market prices audited by EVN first.

Operators of small and medium hydropower plants in the northern region are concerned that the importing of power from China may have a great impact on the operation of such power plants. How could this situation be solved?

There is no need to worry because power import only accounts for only 5% of the system. The local power market is big and needs more investment. Therefore, investors should focus on their jobs. Then, power import will lessen and the market will prosper.

SGT