Electricity of Vietnam owes huge debt to supplier

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Oil and gas group PetroVietnam said that state utility Electricity of Vietnam now owes a huge debt of more than VND6.4 trillion to its subsidiary PV Power.

PV Power is a supplier to Electricity of Vietnam (EVN), which controls transmission and distribution in the country.

EVN often made late payments, seriously affecting business plans of PV Power, news website VnExpress reported Saturday, citing a statement issued by the parent company PetroVietnam.

The debt has amounted to more than VND6.4 billion, not including other service charges of VND895 billion at two thermal power plants in the south.

According to PetroVietnam, the debt translated to a loss of VND27 billion for its subsidiary due to changes in exchange rates and the cost of capital. As a result, it called for the authorities to intervene and help solve the problem.

An EVN official told VnExpress as the company is facing financial difficulties, it will have to give priority to payments to foreign suppliers. The official called for sympathy from PetroVietnam, promising to clear the debt "at the earliest."

It is not the first time EVN has been complained for its late payments. National coal and mining group Vinacomin, together with PetroVietnam, raised their concerns for the growing debt in April.

EVN requested an increase in power prices earlier this month, saying it needs funds to finance new power plants, even after it cut planned investment by more than VND12 trillion.

A regulation allowing electricity prices to be adjusted depending on market conditions took effect on June 1. However, it has not been put into use.

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