VietNam Business

Tuesday, January 11, 2011

EVN pledges sufficient power supply in Q4

HCMC – The Electricity of Vietnam Group (EVN) pledged on Monday that the State utility would try its best to meet the country’s total power demand at some 25 billion kilowatt hours in the fourth quarter of this year.

The group’s deputy general director Dang Hoang An told an online meeting organized by the Ministry of Industry and Trade that EVN would mobilize more energy sources to minimize power outages.

EVN has had to purchase a maximum volume of power from other sources including 67.8 billion kilowatt hours from China to lessen impacts of the power supply crunch in the January-September period, An told the meeting to review industrial production in the first three quarters. He explained that power supply was strain lately due to droughts, causing the water flow to reservoirs to dwindle.

According to a report issued on Monday by the Ministry of Industry and Trade, in the last quarter of the year, some power plants are expected to start commissioning such as the first power turbine of Son La Hydropower Plant, and the first turbines of Song Tranh 2 Hydropower Plant and Dong Nai 3 Hydropower Plant.

The forthcoming operation of such hydropower plants will help ease the power shortage in the country.

However, An noted that the power outages could still occur for around ten days this month as PetroVietnam has just announced a scheme to maintain the gas pipelines of Ca Mau Gas Power Complex over ten days.

Furthermore, An of EVN also told the ministerial meeting that the most worrying problem for EVN is to cope with the water storage in the coming months, particularly during the dry season in the first half of next year.

“EVN will work with the Ministry of Agriculture and Rural Development in the coming days to seek measures for this matter,” An said, referring to the conflict of storing water for power generation and pumping water for farming.

Speaking at the meeting, Minister of Industry and Trade Vu Huy Hoang asked PetroVietnam to work with its Malaysian partner to speed up the gas pipeline maintenance and for the time being use oil to fuel the Ca Mau power plant so that it can run at full capacity in the pipeline maintenance process.

Related to industrial production of the country, the ministry in its report expected a growth rate of 14% as targeted for the manufacturing sector this year, after attaining an industrial production value of VND574 trillion in the year to date, a year-on-year increase of 13.8%.

The ministry also predicted that for the whole year 2010, the country will also obtain total export revenue of US$69 billion, an increase of 21%, while import expenditure is estimated at US$82 billion, up 17% year-on-year.

Lawmakers strike cautious note about high inflation

Lawmakers strike cautious note about high inflation Vietnam’s economic expansion must be accompanied by efforts to control public debt and inflation, legislators said.

According to a government report released at a meeting of the National Assembly’s Standing Committee on Saturday, most of the economic targets set for this year will be achieved, including an annual inflation rate of 8 percent and a 6.7 percent growth in gross domestic product.

The government also projected an economic expansion of 7-7.5 percent and 7 percent inflation for next year.

But Phung Quoc Hien, chairman of the NA’s Finance and Budget Committee, said keeping inflation at 7-8 percent a year should not be seen as a triumph.

“An economic growth of 6.7 percent would be more meaningful if inflation is controlled at a low level,” Hien said. “Other countries have inflation rates of 2-3 percent and they have already made efforts to control prices because they consider such rates too high.”

Vietnam has set its annual inflation target at 7-8 percent for several years and “this has to be reconsidered,” he said.

The Finance and Budget Committee said trade deficit and public debt expansions also posed problems to the economy.

Vietnam’s public debt is expected to reach 52.6 percent of the GDP this year and then expand to 57.1 percent in 2011, according to the government report.

Many legislators said they are concerned that these ratios pose grave threats to the safety of the economy.

Ha Van Hien, chairman of the Economy Committee, said the problem is that, while debt is expanding, it has not been used effectively.

Truong Thi Mai, chairwoman of the Social Affairs Committee, said she's worried about Vietnam's future: the national debt is huge and the country’s GDP growth has been forecast to slow down after 2020.

The government has set a budget deficit target at 5.5 percent of GDP for 2011, but the Finance and Budget Committee requested the target to be lowered to 5 percent only, or VND120 trillion.

Vietnam plans to raise minimum wage to from VND730,000 to VND830,000 a month in May of next year. The government estimated that VND27 trillion from its budget will be use to finance the plan.