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EVN wants to reward staff with VND 1tril
The Electricity of Vietnam (EVN) has asked the government to allow it use the VND1,002bil it got from raising electricity prices in 2007 to reward its staffs. The proposal has immediately raised strong opposition from the public.
Under the Prime Minister’s instruction on Decision No 276/QD-TTg, the money raised from electricity price increases must be used for investment in power plant development.
However, EVN insists that the instruction does not come in line with the provisions stipulated in the Corporate Income Tax.
According to EVN, if it transferred all the money it got from the electricity price increases into power development projects its pre-tax profit for 2007 would be VND1,100bil only.
The Ministry of Industry and Trade and Ministry of Finance have two different viewpoints on EVN’s proposal.
The Ministry of Finance, in Dispatch No 10815 signed by Deputy Minister Tran Xuan Ha, does not believe that EVN ought to be allowed to reward its staffs with the sum of VND1,002bil. The ministry thinks VND668bil is a more appropriate sum, while the remainder should go into development and investment funds as requested by the Prime Minister.
Meanwhile, the Ministry of Industry and Trade, in Dispatch No 9557 signed by Deputy Minister Le Danh Vinh, said that EVN should follow the Prime Minister’s instructions: i.e. EVN must use the whole sum of VND1,002bil for investment in the power system.
The ministry also said that it does not recognise the method of calculating profit used by EVN.
EVN’s proposal seems to have stirred the public to anger.
People cannot understand how EVN, which always complains that it has to purchase electricity at high prices and sell electricity at lower prices, and complains that it cannot mobilise enough capital for power plant projects, and always demands to raise electricity prices, dares ask for permission to use the big sum of money just to reward its staffs.
When trying to persuade relevant ministries and people that it was necessary to raise electricity prices as of January 1, 2007, EVN said that it was incurring the loss of VND285.3 per kwh as it had to purchase at high prices and sell at lower prices. EVN forecast it would suffer the loss of VND4,024bil in 2007.
Nguyen Dinh Cung, Head of the Macroeconomics Studies Division under the Central Institute for Economic Management (CIEM), said that with just the ‘achievement’ of leaving the national economy in serious electricity deficiency, EVN is not worthy of reward. Cung said that it is necessary to verify the capability and clarify the responsibility of leaders of the group.
VNN
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