Lamenting of losses, EVN still posts strong growth
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Despite repeatedly complaining of losses over the last few years, the Electricity of Vietnam Group, commonly known as EVN, has paradoxically posted strong growth in revenue during these loss-stricken periods.
Last year the power monopoly increased the power price by 15.28 percent, but saw its revenue rise by as much as 27 percent, raising questions among industry insiders.
A year earlier, the peak time of its losses, EVN still managed to reap more than VND90.8 trillion, or US$4 billion, thanks to two power price hikes that year.
In 2011, the figure reportedly rose to as much as VND100 trillion, or $5 billion, a 26.7 percent increase against 2010, according to a report the Ministry of Industry and Trade submitted to the government.
However, such high growth was not included in the business report of EVN, in which it only posted data on power saving, losses, and the power loss rate.
Dubious power price
The adjusted average power price in 2011 was VND1,304 a kWh, while consumers actually had to pay around VND1,400 for every kWh, admitted Dang Huy Cuong, head of the Electricity Regulatory Agency under the Ministry of Industry and Trade.
The reason for this is that electricity for household use has been increased by a greater amount that power for production, he said.
However, many consumers are still skeptical about the real power prices they have to pay, compared with those announced by EVN.
Doctor Nguyen Minh Phong from the Hanoi Institute for Socio-economic Research said the rate can be as much as VND2,000 a kWh.
Under the current mechanism, how much a kWh really cost is something only known to EVN, an expert who used to work as an EVN chief revealed.
While the average price is VND1,304 a kWh, consumers have to pay VND2,000-2,060 for every kWh from the 150th kWh in total consumption, he said.
“And only EVN knows the exact ratio of consumers who exceed the 150kWh mark,” he said.
“Even the audit officials cannot inspect this since they cannot look into the power bills of some 17 million consumers countrywide.”
The expert also expressed his skepticism as EVN posted a 27 percent revenue growth last year, while the power price was hiked by only 15.3 percent.
“With its subsidiaries also facing financial problems, it is unlikely that EVN reaped high incomes from the non-core businesses.”
The expert thus urged that the government and the Ministry of Finance look into the difference.
“At present, the cost prices EVN buys power from hydropower and thermal power generators are only some VND600 – 700 a kWh.”
Meanwhile, Dr Phong, of the Hanoi Institute for Socio-economic Research, said that while the global power prices have gone up and down, domestic prices have gone only one direction: upward.
“It is difficult for the power market, which is basically a monopoly to EVN, to be transparent,” he concluded.