Hiep Phuoc IP faces big power surcharge

The company supplying electricity to the HCM City-based Hiep Phuoc Industrial Park has threatened to cut supply if tenants do not agree to pay a steep surcharge, claiming it was suffering losses for a variety of reasons.

The Hiep Phuoc Power Co (HPPC) wanted an additional 12 US cents on top of the newly increased price of 17 cents per kWh but many of the factories in the park have said they would not pay. The company said the oil price hikes due to the political upheaval in the Middle East has driven costs up.

It could only continue to operate if the park’s tenants agree to pay the additional 12 cents and Electricity of Viet Nam makes timely payments for its purchases, it said, adding EVN owed its US$34 million.

From April 1 it would cut off supply to companies refusing to pay the surcharge, and to the entire park from April 26 if too few companies fell in line, it warned.

At the beginning of this year, the company threatened to idle its power plant saying it could not afford to sell power at the then price of five cents per kWh. It reported to have run up losses of $120 million.

But then the Government increased the power tariff across the country to 17 cents.

Now that it wants the surcharge, the park tenants are refusing. Pham Van Dung, director of Xuan Mai Paper Company Ltd, said his company could not afford it since it would mean an extra VND600 million ($20,000) a month.

HCM City Department of Industry and Trade has written to the City People’s Committee about the issue, admitting that if the surcharge was paid, Hiep Phuoc Power Company’s problems would be resolved.

However, this would mean an additional burden on companies and people in the area.

The department has urged the city People’s Committee to subsidise the power company in the short term, and also asked the Ministry of Industry and Trade to order PetroVietnam to supply gas to HPPC. — VNS

Tags: Hiep Phuoc Industrial park