State-owned utility Electricity of Vietnam (EVN) has an unsettled loss of VND15 trillion ($723.2 million) due to exchange rate fluctuations, the State Audit has said.
>> Massive losses cost EVN chairman his seat
EVN’s losses in 2011 were caused by unfavorable production conditions as it purchased power at high prices and sold it below costs, coupled with lax management of investment and finance, Le Minh Khai, deputy head of the State Audit, told the media last Thursday.
There is also a potential loss of VND12 trillion ($578.6 million) at EVN if coal and gas prices are properly calculated in accordance with market prices and sufficiently included in production costs.
EVN raised electricity prices by 5 per cent in last December, the second hike in 2011. The average power tariff is now VND1,304 per kilowatt-hour.
The group will restructure its business this year and withdraw its investments in real estate, stock and banking sectors.
EVN targets a total electricity generation of 118.5 billion kilowatt-hours in 2012, including 67.62 billion kilowatt-hours purchased from providers outside the group.
It posted losses of VND10.16 trillion in 2010.
Currently, local gas and coal suppliers are complaining about prices of their commodities sold to EVN being lower than production costs.
Khai said the Government had listened to the proposals of the State Audit for handling EVN, such as transferring EVN Telecom to another telecom service provider.
Regarding the audit on fuel prices, Khai noted one of the key tasks of the State Audit this year would be to audit the 2011 financial statement of Vietnam National Petroleum Corporation (Petrolimex).
“Though Petrolimex has been equitized, the State still holds a 95 per cent stake in this firm,” he said. “We will thus focus on inspecting the management and allocation of the State capital and assets at this enterprise to timely give out assessments and risk warnings.”
The State Audit last year looked into the fuel price stabilization fund of Petrolimex, together with 10 other fuel trading companies.
The latest audit on Petrolimex’s financial statement took place several years ago.