$672 mln debt EVN owes PVN remains unpaid
Friday, October 12, 2012, 11:00 GMT+7
The Electricity of Vietnam Group (EVN) has yet to repay VND14 trillion ($672 million) to the Vietnam National Oil and Gas Group (PVN), said a senior PVN official.
PVN and EVN are working on a debt repayment schedule so the debtor can pay in small amounts over a long time period, said Phung Dinh Thuc, chairman of PVN board of members.
Without the debt repayment PV Power, the utility arm of PVN, has had to rely on bank loans to maintain its business, said Thuc.
Vu Huy Quang, General Director of PV Power, said the debt consists of the money EVN didn’t pay the company after buying PV Power-generated electricity as of December 2011, according to newswire vef.vn.
New price hike on horizon?
On September 15, the price of coal sold by the Vietnam National Coal Mineral Industries Group (Vinacomin) to EVN for electricity generation was increased for the second time this year, by 28-40 percent, said Vinacomin.
With this increase, the price of coal sold for electricity generation has met 70 percent of Vinacomin’s coal production costs in 2011, rising 20 percent from the end of December 2011, following a proposal of the Ministry of Trade and Industry.
The coal price was increased by 10-11.5 percent for the first time in July this year.
The September coal price hike, the steepest increase so far this year, will put real pressure on the electricity price starting this month, as thermal power plants will have to spend an extra VND890 billion ($42.7 million) for fuel costs this year, Vietnam News Agency quoted an official from EVN as saying.
EVN has to submit the electricity pricing plans at 3-month intervals, according to Decision No.24 signed by the Prime Minister on the electricity price adjustment following the market mechanism.
However, a state official from the Ministry of Trade and Industry has said that the electricity price would not be raised in October.
Dang Huy Cuong, director of the National Electricity Regulatory Department under the ministry, said a task force of state officials from the Ministry of Finance and the Ministry of Industry and Trade is inspecting the cost of electricity production in 2011 at EVN.
The inspection will force EVN to estimate the total cost for the period of 2013-1015 for the pricing roadmap.
After the results of the inspection are finalized, the industry-trade ministry will make a proposal to the government for a price adjustment plan for the last months of 2012 and for 2013.
As a result, the submission of EVN’s new electricity pricing plan will be suspended in October, he added.
Thanks to two months of favorable hydrological conditions, cheap hydroelectric power is abundant, but with the increase in the price of coal, it is difficult for EVN to reduce electricity prices.
EVN’s electricity production and purchase in September was estimated at 9.741 billion kWh, rising 6.9 percent year on year, according to the Ministry of Industry and Trade.
The group’s revenue from electricity sales in September was estimated at VND12.535 trillion, up 17.12 percent year on year, lifting the total figure in Jan-Sep to VND105.588 trillion, a year-on-year increase of 25 percent.
In September, EVN’s actualized investment capital reached VND5 trillion, bringing the total figure in Jan-Sep to VND47.582 trillion, or 63.95 percent of the year’s plan.
According to the ministry, EVN is now facing many difficulties in raising capital for investments. So far, EVN has raised VND54 trillion for its 2012 plan, about 73 percent of the total capital demand, and still lacks nearly VND20 trillion.
