Minister addresses power supply, steel planning and trade deficit

Minister of Industry and Trade, Vu Huy Hoang, delivered a report on three of Vietnam’s most pressing issues.

The issues include power supply, steel planning and trade deficit, all presented before the National Assembly November 1.

Power supply problems attributed to capital shortage

The minister acknowledged that the Ministry of Industry and Trade (MoIT) is partially responsible for power shortages.

Hoang said, “If the ministry closely monitors the implementation of the national power development plan from 2006-2010 and a vision until 2015, or Plan VI, the lack of power will not happen.”

He added that scenarios and estimates of power consumption in plan VI are still reasonable now. It is calculated that Vietnamese power demand will increase by 16%-17% per year from 2006 to 2015 compared to 15%-16% between 2007 and 2010, with 15%-17% projected this year.

The insufficient power supply is a result of many things. These include a shortage of funds which has led to slow construction of many projects. The government has asked PetroVietnam Oil and Gas Group (PetroVietnam), Electricity of Vietnam Group (EVN) and Vietnam National Coal Mineral Industries Group (Vinacomin) to join in providing power supply.

To improve the situation, the government has urged a faster construction pace of power projects in Plan VI and the Plan VII (the national power development plant from 2010 to 2020 and a vision until 2030) as well as put into official operation the Haiphong Thermal Power Plant and Quang Ninh Thermal Power Plant which have still been on trial runs.

Minister Hoang also noted that the MoIT will submit a plan to restructure the power sector to the government from now to year’s end, focusing on EVN. The governmentt is also building power supply plans to ensure demand for production during the 2011- 2012 period.

“We are instructing that EVN cooperate with ministries, agencies and localities to deal with wasteful industrial projects and using backward technology, including steel projects. We will send a report on this to the government later this year,” Hoang shared.

Only planned steel projects to be carried out

The minister also said that the unplanned steel projects are mainly found at poor localities which expect these projects to facilitate its industrial development.

The MoIT will tighten control over steel investment, in which, only planned projects are carried out. Meanwhile, projects which are energy-intensive and use backward technology will be suspended or cancelled, Hoang said. The steel plan will focus on the production of steel and limit end-products because the nation is now in need of steel, not the finished products, according to Hoang.

Narrowing the trade gap

The minister’s report indicated that trade deficit in Vietnam has remained high. However, the country has made remarkable progress in narrowing the trade gap. This year, the national trade deficit is estimated to be USD12 billion based on trade figures of the first ten months, lower than the figure of USD13.5 billion given in September.

Vietnam’s trade gap was estimated to be USD12.8 billion in 2009, USD18 billion in 2008 and USD14 billion in 2007.

According to the report, the rate between trade gap and export revenues has decreased with at about 18% in 2010, against 22.5% in 2009, 28.8% in 2008 and roughly 30% in 2007.

“We need a long time to curb the trade deficit, particularly when the country pours big investments into economic development. For instance, building a 1,200-MW power plant worth USD2 billion is equal to exporting 6 million tonnes of rice per year,” Hoang highlighted.-dtinews

Tags: Vietnam power output, Vietnam steel industry