The price of power on Vietnamese islands has been slashed to the same as those on the mainland. Previously, despite Government subsidies, they were up to five times higher.

The energy cuts are part of a strategy to improve people's living on the islands, to boost economic development - and, importantly, heighten security in East Sea territories.

Electricity of Vietnam (EVN) will apply the new retail prices on June 7.

The new retail prices range from 1,100 to 4,000 VND (5 to 18 cents) per kWh. (In Vietnam, the hourly rate increases with more usage. This is an attempt to stop wastage).

The new island prices cuts are still heavily subsidised by the Government as in the past.

EVN predicts that the cuts will increase power consumption on the islands.

However, it also warned that investment in power production facilities on the islands was still limited.

Therefore it has advised the authorities on islands that have not yet been linked to the national grid by undersea cable to develop energy consumption and saving plans.

Several larger groups of islands were recently supplied with electricity from the mainland, including Co To, Phu Quoc and Van Don. In October, Ly Son Island in central Quang Ngai province will also be linked to the national grid.

The price cuts are already having an effect. On central Binh Thuan province's Phu Quy Island, residents are keen to buy electrical appliances and businesses have been alerted to new opportunities, according to Vice Chairman of the district People's Committee, Ta Minh Nhat.

Power prices on the island were previously two to five times higher than those on the mainland.

This forced many processors and manufacturers to produce a limited amount of goods - or move to the mainland.

Nguyen Phuoc Kim, Vice Director of Kim Hoa Seafood Processing Company based in the district, said that in recent years, seafood was mostly taken to the mainland for processing.

Tran Van Hien, head of the district's Seafood Processors' Association, said many of the association's 16 members now planned to resume business on the island itself.

"The price cuts will help reduce production costs. We can process fish at the island instead of renting frozen warehouses on the mainland," he said.-VNA