EVN opposes Government Inspectorate’s conclusion

According to the Government Inspectorate, EVN’s non-core investment reached VND121 trillion by late 2011

The Government Inspectorate has recently made its conclusion after inspecting operations of EVN’s, saying that ineffective and massive non-core business activities are to blame for the group’s large losses.

According to the Government Inspectorate, by the end of 2011, EVN’s non-core investment reached VND121 trillion (USD5.76 billion), surpassing its charter capital of almost VND77 trillion (USD3.7 billion). This is a violation of Ministry of Finance regulations, and, despite the big non-core business investment, EVN recorded losses of VND2.2 trillion (USD104.7 million).

Construction problems on many power projects have also caused extra costs and these are among the reasons for the group’s power-price hikes.

However, EVN said that its so-called non-core investment is the capital it has poured to its affiliates and associated companies to carry out power generation, transmission and distribution activities in line with the law.

EVN explained that investment of VND121 trillion mentioned by the Government Inspectorate is just the capital that EVN has poured into its power plants. After the power projects are privatised, the investment is considered outside of the parent company, not in other sectors such as securities, banking and real estate. It affirmed that only around VND2 trillion has been injected in non-core business activities and has gradually withdrawn it under government instruction.

It noted that, “Therefore, here it is the only change of the operation model and EVN’s investment in the affiliates and associated companies are not new non-core business outside the power production sector.”

The group said to attract qualified labourers to work for its plants, its power plants must be built and have operated. Homes must also be built in the area for experts to live in during the plants' construction. After the experts leave, the houses will be turned into guest houses or serve as accommodation places for the staff in charge of the management of operation and repair activities.

Nangluongvietnam.vn said that in the 2010-2011 period, EVN faced many difficulties due to higher power demand but and a water shortage. The group had to use oil to compensate for power production, causing a loss of VND12 trillion (USD571.42 million).