Vietnam Electricity asks to increase power prices to cover $470mn loss

Vietnam Electricity asks to increase power prices to cover $470mn loss

State utility Vietnam Electricity (EVN) has called on the government to allow it to raise power prices, as conditions are now appropriate to do so, a company chief official said Sunday.

The current ‘conditions’ that merit an increase in electricity prices are that the state-run power giant posted a VND2 trillion (US$94.14 million) loss in the first quarter of this year, plus an accumulated VND8 trillion ($376.54 million) deficit from previous years, according to its deputy general director, Dinh Quang Tri.

“EVN incurred overrun costs of up to VND7 trillion ($329.47 million) due to the soaring prices of coal and gas, which fueled its power plants,” Tri said.

EVN thus should be permitted to increase power prices given the total financial burden of VND10 trillion ($470.68 million), the official added.

Tri pressed, however, that EVN has only proposed this possibility, and the final decision is in the hands of the government.

The power utility also asked to hike electricity prices earlier this year, but the proposal was rejected by the government, Tri said.

67,000 employees to bill electricity?

Besides taking losses, labor productivity at EVN is also an issue that needs improving, a meeting between the Ministry of Industry and Trade and Prime Minister Nguyen Tan Dung heard last week.

At the meeting on October 2, the premier complained that the labor productivity of EVN employees is much lower than their counterparts around Southeast Asia.

EVN general director Pham Le Thanh also told the meeting that there are as many as 67,000 EVN employees that are tasked only with recording power use at households countrywide for billing purposes.

While many countries have adapted technology that automatically bills consumers for their electricity use, in Vietnam EVN employees mostly have to go from house to house to read the electricity meters. They also return several days later to collect the power bill payments.

The statistics immediately grabbed media attention, as it is a huge waste of workforce.

But EVN said in a statement on October 4 that the figure is inaccurate.

The company said 67,000 is in fact the total number of employees in its five units, including the Northern, Southern, and Central Power Corporations, and EVN Hanoi and EVN Ho Chi Minh City, according to the document.

EVN, however, did not specify how many employees are tasked with reading electricity meters, or whether its general director had made an incorrect statement.

“Billing electricity is only a small part of the work the 67,000 EVN employees have to do,” EVN said.

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