Creditors ask for money back, EVN gets rattled

The Electricity of Vietnam (EVN), the big debtor, has been continuously urged to pay its due debts. However, it is still unclear how EVN will arrange money to pay debts.

At the meeting with the Ministry of Industry and Trade (MOIT) on September 5, the power companies which sell electricity to EVN, once again asked the ministry to instruct EVN to pay debts to them. The power companies decided to ask for the watchdog agency’s help after they many times failed to urge EVN to pay debts.

Nguyen Van Bien, Deputy General Director of the Vietnam Coal and Mineral Resources (Vinacoal), said that Deputy Prime Minister, Hoang Trung Hai, in a recent document, instructed EVN to pay debts to Vinacoal, but Vinacoal still cannot collect debts.

The Cam Pha Power Plant alone still cannot get one trillion dong paid from EVN which is the money from the plant’s electricity sale.

Vu Quang Nam, Deputy General Director of PetroVietnam, also said that EVN is still owing money to PV Oil and PV Gas, the two subsidiaries of PetroVietnam. As a result, the two enterprises do not have money to buy gas and cannot pay to gas suppliers.

Deputy Minister of Industry and Trade, Hoang Quoc Vuong, admitted that the demand to pay debts has been repeated continuously at the recent meetings organized by MOIT. However, Vuong said that the creditors should sympathize with EVN which is now in big difficulties. Earlier this year, the Prime Minister instructed commercial banks to lend 10 trillion dong EVN. However, to date, the sum of loans has not been disbursed yet.

“MOIT has asked EVN to work out with banks soon, in order to get the loans to purchase oil for generating electricity in the first half of September, when the Nam Con Son oil pipeline halts its operation for periodic maintenance,” Vuong said.

Deputy General Director of EVN, Duong Quang Thanh, said that the economic group plans to churn out 314 million kwh per day in September and 9.42 billion kwh in September. However, EVN fears that the maintenance of the Nam Con Son gas pipeline, slated for September 15-30, would cause the electricity shortage to southern provinces. Therefore, EVN is considering using 630 million kwh from oil run plants in September.

In an effort to restructure the huge debts, EVN in August sent a document to the Government, asking for the permission to exempt the import tax sum worth 5.6 million dollars that the Hiep Phuoc Power Company has to pay for the mazut imports.

Hiep Phuoc is a partner of EVN, and the EVN’s proposal to exempt tax on mazut imports for Hiep Phuoc, is considered the method that helps EVN escape from the debt of 5.6 million dollars it is owing to the Hiep Phuoc Company.

However, in the latest decision, Deputy Prime Minister Vu Van Ninh has refused the proposal. Ninh has instructed relevant agencies to impose tax on the mazut imports in accordance with the current regulations, and not to apply any preferences to Hiep Phuoc as proposed by EVN.

Ninh made such a decision after the Ministry of Finance expressed its viewpoint on disagreeing to the tax exemption proposal.

The Ministry of Finance believes that Hiep Phuoc imports mazut for consumption at the power plants built by the company itself and not for the consumption on the domestic market. Therefore, the company has to pay tax in according to the current laws.

The ministry has stressed that the fee and tax exemptions or reductions will only be allowed by the government in some specific cases. Therefore, Hiep Phuoc will still have 300 dong per kilo of mazut, even though EVN is still owing money to Hiep Phuoc and other partners, including PetroVietnam.

Source: VnExpress

Tags: EVN