Coal group denounced for pushing up coal delivery costs

Cement producers have accused the Vietnam Coal and Mineral Industries (Vinacomin) of charging overly high transport fees.

According to the Vietnam Cement Association, He Duong Cement Company in Ninh Binh Province, Huu Nghi Company in Phu Tho and X18 Company in Hoa Binh have lodged complaints about the fact that Vinacomin sets transport fees which are three times higher than the market price.

As the only supplier of coal to cement companies, Vinacomin has been forcing buyers to accept ”in-door delivery”, which means Vinacomin delivers coals at buyers’ headquarters. This has allowed Vinacomin to collude with transport firms to raise transport fees.

Director of Huu Nghi Cement Company Do Tien Loc said that the market transport fee for carrying coal from Quang Ninh province to Viet Tri port is some 50,000 dong per tonne. Besides this there is 20,000 dong per tonne for road transport and 58,500 dong VAT tax. As such, the price of every tonne of coal after it is carried to Huu Nghi Cement Company, should be 1,298,500 dong

However, Vinacomin asks Huu Nghi Company to pay 1,400,000 dong per tonne.

“Vinacomin provides 120,000 tonnes of coal every year, which means we lose 12 billion dong,” Loc said

Cement producers have also accused Vinacomin of committing fraud by increasing the humidity of coal.

According to Nguyen Van Kien, Director of X18 Cement Company, the coal provided to his company always has humidity double the allowed level, which means coal become heavier.

In fact, Vinacomin has been setting its own rules for many years. However, the rules were accepted by cement producers in the past, because Vinacomin previously sold coal at much lower prices.

“Now they (Vinacomin) are selling at 1.5 million dong per tonne, equal to the market price. Meanwhile, the transport fee is triple the market fee,” a representative of a Hue City-based company said.

According to the Vietnam Cement Association, all the cement factories in Vietnam consume 3.5 million tones of coal a year. If  VInacomin cut 100,000 dong per tonne in transport fees, cement producers would save 350 billion dong per annum.

The association in late 2008 sent a document to the Ministries of Industry and Trade and Finance to report about the overly high transportation fees charged by Vinacomin. However, the association received no reply.

Meanwhile, Vinacomin  deny the accusation made by cement producers. They said the transportation fee is set by both the seller and buyer. Vinacomin has to take responsibility for managing coal, which forces it to carry coal from Quang Ninh province, where it is mined, to the places where coal is used.

The official said that the transportation fee charged to cement producers and others is still lower by 10 percent than those applied to power companies.

Also according to him, Hon Gai’s and Cam Pha’s coal has a maximum humidity of 12 percent. “Higher humidity would force us to pay higher fees to transport firms, therefore, we would not be foolish enough to increase it,” he said.

VietNamNet/VNE

Tags: Vietnam Coal