Dry season threatens power shut down for southern firms

Continued power cuts are expected to hit enterprises in southern Binh Duong province’s industrial parks more severely this year.

Electricity of Vietnam said last week that Vietnam would continue to face a power shortage of at least 3 billion kilowatt hours in 2011 because of the scarcity of water in reservoirs, especially during the dry season from January to May.

This means that Binh Duong’s industrial production will continue to be hit, because 85 per cent of the province’s electricity is earmarked for industrial production.

While the whole country’s demand for power increased by 18 per cent in 2010, the rate was 28 per cent in Binh Duong and was expected to augment to 30-35 per cent in the province this year, said Tran Van Lieu, head of the province’s Industrial Park Authority, which manages 26 industrial parks that are home to 1,034 foreign-invested enterprises.

In 2010, the province’s total industrial production value was VND106 trillion ($5.43 billion), up 20.5 per cent against 2009, and it was expected to increase by 21 per cent on-year in against 2010.

However, Lieu said that the results would even be much better if power supplies were sufficiently maintained. He also stated that it would be difficult for Binh Duong to reach such a targeted industrial production value this year due to the expected power cuts.

“Power blackout will continue to seriously hit all the parks. Power cuts deprived us of many opportunities in attracting investments in 2010. They will trigger more strikes this year and enterprises’ operations will be affected,” Lieu said.

The authority reported that several hundreds of large strikes happened in 2010, partly due to power cuts, because workers often had to work on Sundays and holidays to make up for lost time. Under the Labour Law, employees were supposed to be paid double compared to their salaries on normal work days but many employers refused to compensate.

Charoen Pokphand Group (CP), which has nearly 20 animal feed processing factories in Vietnam, including one mill in Binh Duong, lamented that its biggest problem of 2010 was frequent power cuts.

“We cannot calculate how much we have lost from frequent power cuts in the country. If only Vietnam could improve this situation,” said a CP representative. – VIR

Tags: Vietnam electricity, Vietnam energy, Vietnam power shortage