EVN cuts cost to help slow price rise

Electricity of Vietnam has targeted reducing its production costs by 1.8 trillion VND (85.7 million USD) this year.
Electricity of Vietnam has targeted reducing its production costs by 1.8 trillion VND (85.7 million USD) this year.

The cost cutting measure was included in an agreement which was sealed on Feb. 21 between the EVN General Director and leaders of its member enterprises. The agreement also embraces their efforts to save electricity and reduce power losses.

Addressing the signing ceremony, Finance Minister Vuong Dinh Hue said this is a measure to reduce price acceleration pressures.

The Government is determined to manage prices according to the market, he explained. Electricity prices will continue to rise to make up for production costs because the Government cannot offer subsidies forever.

A 5 percent rise in electricity prices would push the CPI (consumer price index) up by 0.37 percent, he added.

"With this action, EVN is sharing difficulties with the Government and the business community," he said.

The primary method that EVN intends to use to decrease production costs is to save the amount of electricity that is consumed by 1 percent, equivalent to 1 billion kWh. This change will reduce costs by 1.3 trillion VND (62 million USD).

EVN's member enterprises will have to cooperate with local authorities to persuade households and businesses to save power. They will continue encouraging people to use compact light bulbs and electric appliances with "energy saving" labels.

Users of solar-powered devices to boil water will receive 1 million VND (47 USD) in support from the corporation. About 30,000 devices are estimated to be in use.

The Finance Minister also urged the sector to cut its own expenses on materials, services, stationery, seminars and others items will therefore be lowered by 5 percent. The corporation also plans to cut its own use of electricity by 0.2 percent for production, transmission and distribution.

To meet the target, EVN asked its member enterprises to prepare electricity provision projects for this year, including safely operating the North-South 500kV national grid, putting new turbines into operation and completing key electric transmission and distribution works as scheduled.

Improving the grid network in rural areas to reduce power losses by 5 percent to 15 percent is another measure. - VNA

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