One of the reasons cited by experts for the problems is price regulation. Prices are kept low by the government, something which has also stymied interest in the sector by foreign investors, so freeing up the sector will necessarily mean higher prices.
Nguyen Huong Giang runs a nail salon in a street with many other small beauty parlours and salons. She says she’s also been losing business because of the power cuts, but unlike Tuan reckons fair warning is rarely given, something which EVN could in theory be fined for.
‘The price is increasing but the power cuts are continuing,’ she says, ‘the price has been increasing more and more (in recent years).’ A steep increase in price would be widely unpopular with the public, who already worry about inflation. However higher prices may be accepted as a necessary evil if the lumbering state owned enterprise shapes up.
‘I think there are limitations in management,’ says Giang, voicing an opinion many people have of their government-run enterprises.
The Chairman of EVN, Dao Van Hung, expressed frustration to local media last month, noting that low prices meant the company was unable to ensure profitability, and thus earn the foreign investment it wants.
The company has lost more than 4.7 trillion VND buying power to meet demand. Hung also pointed out that EVN shouldn’t be singled out as it only held a monopoly on distribution and purchase of power; PetroVietnam and coal company Vinacomin also produce power. Renewable sources of energy have been discussed but funding remains an issue.
That the power cuts are affecting business and are also becoming politically sensitive is obvious.
According to reports, tourists have been getting stuck in hotel elevators during unannounced blackouts and companies are spending large amounts of money to keep their generators running. People have begun cancelling tours and hotel stays.
Earlier, farmers forced government officials to sit in 40 degree sun in north central Thanh Hoa Province, urging them to explain why they had had to endure so many power outages.
The government has told state media that production increased by 17 percent this year, but it’s still not enough to cover what is needed. Government assurances that it has told Electricity of Vietnam to improve and increase its purchases of electricity have been met with much cynicism.
‘When the government is spending money to buy power from foreign countries like China we don’t know where the power is going,’ Giang says.
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ksou
“(although US power company AES has agreed to invest in a $1.6 billion, 1,200 megawatt plant).”
This is always very bad, you never want a foreign company controlling a utility .
Here in California Edison put most of the state though rolling black outs a few years back, except for those in LA using DWP ( a publicly owned utility) . Corporations aren’t always a good thing
With something like power you run the risk of someone who has no interest in your culture or well being controlling a key part of your lives .
Immortal Technique’s Open your eyes song addresses this problem
“We were promised a better life in our home countries, where we were told that privatizing, water and electricity would make things run more efficiently. Instead, the quality remained almost the same and the price was increased until it became an unaffordable luxury.
Some corporations are more efficient than government, but their motivation is not to help the well-being of the people; it’s only about profit. Everything else – their image, their human resources, their public relations – only exist to protect the reality behind them.
Once upon a time, we were told that nationalization would prevent growth by limiting competition, that our countries were nothing without the companies that invested in us, and so they privatized everything. Everything in our country was owned by people that had no connection to our culture, by those who never had our interest at heart. ”
He’s talking about Latin America but the same thing applies . Capitalism’s good, but when your talking about things that are in the public interest power, water, garbage collections ,ect governments need to keep control of it .
Pan, alot of nations have problems with electricity , in the Easten US we have to replace the entire power grid soon since the old ones worn out . Heck, theres always solar!
Pan
“One of the reasons cited by experts for the problems is price regulation. Prices are kept low by the government, something which has also stymied interest in the sector by foreign investors, so freeing up the sector will necessarily mean higher prices.”
It’s very interesting that this problem is also faced by a first-world country, Greece. Its state electricity company keeps artificially the prices low creating exactly the same situation regarding the potential private companies. The government has made known its willingness to liberalize the market, provoking the usual reactions from the powerful syndicates. In no way I want to underestimate Vietnam, but certainly it’s not honourable for Greece that it faces the same kind of problems with a developing country.