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BUSINESS IN BRIEF 1/9
Bigger
incentives proposed to spur supporting industries
Southern
province Ba Ria-Vung Tau is sourcing a variety of incentives to attract
investors to its efforts to develop supporting industries.
Provincial
authorities recently finalised and submitted to relevant government agencies
a project on setting up a specialised mechanical engineering industrial park
(IP) to be positioned in provincial Chau Duc district.
The
provincial management is calling for their new IP to be given similar
incentives to those of another specialised IP which was reported to be
positioned in the Dinh Vu-Cat Hai Economic Zone in northern
This
means provincial projects involving in supporting industry development would
benefit from equal incentives as applied to areas facing hardships for
socioeconomic development or special investment encouragement fields.
The
southern province also sources similar incentives for businesses venturing on
industrial park infrastructure development to attract supporting industries.
Incentive
recipients under the proposal are projects covering aforesaid fields
irrespective of the fact the projects are new or expanded.
Besides,
the province also proposes not forming a specific council to appraise
incentives for supporting industry items as regulated in prime ministerial
Decision 12/2011/QD-TTg presenting policies for development of several
supporting industries.
Provincial
People’s Committee Deputy Chairman Ho Van Nien articulated the need to
simplify recognition of supporting industry businesses qualified for the
incentives.
Accordingly,
the provincial People’s Committee and IP Authority shall be given the right
to recognise supporting industry businesses when granting investment
certificates for businesses producing items listed in prime ministerial
Decision 1483/QD-TTg enacted in August 2011.
For
products outside the list, the Ministry of Industry and Trade shall present
specific criteria and decentralise IP Authority to consider recognising
supporting industry businesses when granting investment certificates.
The
province also recommends not appraising environmental impact assessment
reports of supporting industry projects presented by small and medium size
enterprises (except areas likely to cause environmental contamination like
painting, welding or plating) because these specialised IPs feature
ready-built standard waste-water treatment facilities.
Earlier,
In
early July 2013, prime minister approved ‘Industrialisation strategy within
Vietnam-Japan cooperative framework to 2020 with vision towards 2030’.
The
strategy focuses on improving the production capacity of six key industries
including electronics, agricultural machinery, agro and seafood processing,
shipbuilding, environment, energy efficient, and automobile and part
production.
It
aims to promote technology upgrades, raise labour expertise, and hone
Experts
assumed that these key industries, albeit hosting vast numbers of businesses
and making significant contributions to the economy, have reported modest
profitability and businesses in these sectors are mainly busy with processing
or making raw products with low value addition.
Underdeveloped
supporting industries are cited as the largest challenge to Japanese
investors doing business in
Vung
Tau swoops into top ten
Vung
Tau is now ranked in the top ten of
Located
in the southern
Vung
Tau is home to over 400,000 people and is a very scenic destination with
beautiful beaches and many cultural and historical sites, making it a popular
tourist destination. This growth led to it taking over from Ba Ria as the
province’s administrative hub.
In
2011, the city’s per capita income, not including oil and gas, was $6,060 and
it was aimed at $10,600 with an 18 per cent annual growth by 2015.
Vung
Tau Municipal People’s Committee Chairman Phan Hoa Binh said that by 2020,
the city planned to raise nearly $5 billion for development programmes.
Procedures
still concern realty developers
Time-consuming
administrative procedures are one of the problems faced by both local and
foreign companies, especially those in the real estate sector, heard a
seminar on administrative reform.
At the
seminar, which looked into the procedures for investment projects and was
held by the HCMC branch of the Vietnam Chamber of Commerce and Industry
(VCCI) last Friday, VCCI said a survey of some 8,000 enterprises nationwide
identified tax procedures as a headache.
Up to 33%
of respondents said tax procedures are making life hard for them. Meanwhile,
procedures in the land, natural resources and environment fields came in
second with some 29%, followed by business registration and investment
certification procedures with about 15%, according to the survey.
Respondents
said procedures on land, investment and construction are the toughest to
handle. In investment preparations alone, different provinces have different
regulations, the survey found.
According
to Pham Gia Tuc, vice chairman of the administrative procedures reform
consulting council, multiple companies and associations complained the
current investment procedures have rendered their business operations
inefficient.
Tran
Thi Bach Van, director of Tri Tue Company, cited an example in which her
company had asked for permission to build an apartment project in HCMC’s Binh
Thanh District by mobilizing capital from homebuyers but it has failed to go
ahead with the project after a decade of struggling with the procedures.
The
document submitted by Van’s enterprise was transferred from the city’s
Planning and Architecture Department to Binh Thanh District and then to the
city’s government for approval.
The
document would continue to be transferred to the district government and go
back to the architecture and planning department for consideration once more
before getting a nod for execution, she said.
Kinh
Do ventures into instant noodle market
Confectionery
producer Kinh Do Corporation will launch its own instant noodle product next
month, making a foray into this fast growing market.
Kinh
Do said in its second-quarter financial report that the production of instant
noodle was going well and the product would be introduced in the third
quarter via its existing confectionery distribution system.
Speaking
to the Daily, a representative of Kinh Do said the launch date could be next
month. This is part of the firm’s food and taste strategy.
In the
strategy, Kinh Do would launch spices after instant noodle.
Statistics
of the World Instant Noodles Association released in April show
According
to unofficial statistics,
Project
transfers, forex subject to CIT
The
Ministry of Finance has proposed imposing a corporate income tax (CIT) rate
of 22% on a number of activities of enterprises starting in 2014, including
income from exchange rate difference, project transfer, transfer of
participating right of investment project and transfer of the right of
minerals exploration, exploitation and processing.
This
is part of the draft decree regulating some articles of the Law on Corporate
Income Tax (CIT) and the law amending and supplementing a number of articles
of the Law on CIT. Enterprises are expected to be subject to the rules from
January 1, 2014.
The
Ministry of Finance is fielding suggestions for the draft decree before
submitting it to the Government. Aside from income from production, goods and
service trading, the ministry has suggested that local enterprises will have
to pay taxes for other incomes such as savings interest, loan interest and
foreign currency sales.
Taxes
have been imposed on savings and loan interest of enterprises given current
regulations. The most noteworthy change in the draft is imposing the CIT on
the exchange rate differences from revaluation of liabilities payable with
origin from foreign currencies at the end of the fiscal year (excluding
exchange rate differences arising during the basic construction investment
process to form fixed assets that such fixed assets have not been included in
production and business) and exchange rate differences arising during the tax
period.
The
ministry has also proposed CIT on income from capital transfer, including
income from the transfer of part or the whole of the capital amount invested
in an enterprise, even in case of sales of enterprises, transfer of
securities and other forms of transfer of capital as prescribed by law,
income from the right to own or use assets, including earned copyright
royalties in any form and earned royalties from intellectual property rights
and income from technology transfer under the laws and asset lease in any
form.
Recovered
bad debts which have been written off, payable debts of unidentifiable
creditors and omitted income from previous years’ business activities to be
discovered will be also subject to the tax.
The
National Assembly has approved slashing the CIT to 22% against the current
level of 25% starting January 1, 2014.
The
central city of
The
compliment was made in an article by Bruno Philip Da Nang, nouveau dragon
économique du Vietnam (
The
article began by describing the unique architectural features of the Rong
(Dragon) Bridge, which illustrates the legendary creature heading towards the
sea, and commenting that it reflects the unstoppable development of the third
largest economic hub in the country (after Hanoi and Ho Chi Minh City).
The
article noted that between 2002 and 2012,
The
author wrote that the development of
Scores
of economic zones have been set up in the outskirts, while luxurious hotels
line the white sand beaches along the blue sea.
Last
year, the city welcomed over 2,659,000 tourists, including 603,000
foreigners.
The
French
investor Christian Leroux, whose Dacotex Group in
Local
labor productivity just half of ASEAN average
The
local labor productivity is only higher than that of
At the
seminar on policies for job promotion and sustainable employment organized by
the National Assembly (NA) Standing Committee in HCMC on Monday, Loi said
that the physicality of local workers was at a low level in terms of height,
weight and endurance and thus they failed to meet working intensity in line
with international criteria.
In the
meantime, working disciplines of Vietnamese employees are much weaker than
their counterparts in other ASEAN countries, he added.
Labor
productivity in the nation’s economy remains poor, with working efficiency in
the agricultural sector only equal to one-third of that of the industrial
sector. This is proven by the fact that workers in the agricultural area
account for up to 48.7% of the total number of local workforce but only
generate 24.3% of gross domestic product (GDP) for the country. In 2011, the
number of workers in the local agricultural production was pretty high, at up
to 64% of the total.
Trieu
Thi Nai, vice chairwoman of the NA Ethnic Council, noticed that workers in
mountainous areas heavily depend on the State supporting policies, as many of
them who were given basic vocational training on cultivation and livestock
farming have failed to apply their skills due to difficulties in seeking
outlets for the products.
She
therefore called for the NA to make thorough considerations to map out
policies suitable for mountainous workers to drastically tackle the labor
problems faced by the country at present.
Fund
managers find it hard to call for indirect capital
Although
foreign fund managers have been trying to promote investment opportunities in
Andy
Ho, managing director of VinaCapital with US$1.5 billion of assets under
management in
“They
said that they needed more time to see whether the economy in
Foreigners’
massive capital withdrawal out of emerging markets has caused challenges for
fund managers in mobilizing capital for the
Mekong
Capital, a fund management firm that mobilizes capital for private and
unlisted enterprises in
However,
foreign fund managers still pin high hopes in prospects of the economy and
local enterprises.
Chris
Freund, founding partner of Mekong Capital, said that
Another
advantage of the country is that it is more of a level playing field than the
Nguyen
Xuan Minh, director of Vietnam Asset Management (VAM), said that foreign
investors have showed signs of returning to
“Six
months or a year go, the investors had no intentions to invest in
VAM
will hold a meeting with Singaporean investors who are seeking investment
opportunities in
Since
early this year, foreign investors have poured additional capital into funds
under VAM management but the volume is still low.
VAM
expects to complete procedures to establish a fund for European investors in
the next three months. Then, the fund manager will meet the investors to call
for investment capital into
Jan-Aug
FDI capital almost meets full-year target
The
nation’s foreign direct investment (FDI) capital reached US$12.63 billion
between January and August, up 19.5% year-on-year and nearly fulfilling the
full-year target at US$13-14 billion, according to the Foreign Investment
Agency under the Ministry of Planning and Investment.
A
report of the department showed that both newly registered and additional FDI
capital increased during the period.
Nearly
770 new projects were granted investment licenses with total registered
capital of more than US$7.4 billion, up 12.2% year-on-year, and nearly 300
other projects expanded investment capital for an additional investment of
US$5.22 billion, a 31.7% year-on-year increase.
Analysts
said that the nation is possible to reach this year’s FDI capital attraction
target in the remaining four months of 2013 or even surpass this target.
FDI
disbursement hit US$7.56 billion during the period, up 3.8% compared to the
same period last year, which was also not far from the full-year target of
US$10.5-11 billion.
Industrial
processing and manufacturing still attracted much attention from foreign
investors, accounting for 85.7% of the newly-registered capital with 370 new
projects worth US$10.8 billion. Real estate sector followed with over US$588
million, or 4.7% of total capital.
The
agency also said that FDI enterprises fared well in the period. Exports in
the FDI sector were estimated at US$56.1 billion in the period, an increase
of 21.7% year-on-year. If excluding crude oil, the respective figures will be
US$51.2 billion and a 26% year-on-year rise.
A
number of important traffic projects in HCMC will be put into use from now
until the year-end to ease traffic congestion at the city’s gateways.
According
to HCMC Department of Transport, the steel overpasses at Ba Thang Hai-Nguyen
Tri Phuong and Cong Hoa-Hoang Hoa Tham intersections will open to traffic
from today, followed by the overpasses at
The
eastern outer belt road’s section from
Another
important project is Tan Son Nhat-Binh Loi-outer ring road (the section from
Nguyen Thai Son intersection to
The
aforementioned projects lying at the city’s gateways will help reduce
congestion at those places when put into use.
This
year, HCMC focuses on 16 new major traffic projects, 12 projects transferred
from last year, six projects using the budget and six others using official
development assistance (ODA) loans.
The
city will take over VND3 trillion from the budget to implement 16 traffic
projects this year while more than VND145 trillion sourced from off-budget
funds and ODA loans will be needed for major projects.
Property
expert says progressive tax the wrong cure
Although
imposing progressive tax on slow-moving property projects is expected to
create pressure and make investors accelerate projects, such a policy is seen
a devastating blow to many players at a time the market is seen very frail,
said a property expert.
Nguyen
Van Duc, vice chairman of the HCMC Real Estate Association, told the Daily
that the current situation was in a dilemma.
While
the Ministry of Construction recommends infeasible projects to stand still as
more products will only cause a glut, the Ministry of Natural Resources and
Environment wants enterprises to implement their projects to avoid wasting
land. Each ministry views the situation from its own perspective to show
power, he said.
“The
market now can be likened to a bike, some want to keep on riding, others want
to stop,” he said.
According
to Duc, enterprises do not want to keep their land sites unused but surely
want to execute projects, bring out products and recover capital, especially
in the current situation.
If
progressive tax is imposed, there will be two possibilities. Enterprises will
either pay tax as they are unable to do anything on their land sites in
unfavorable conditions, or will sell out properties to banks or foreign
investors.
Both
possibilities are disadvantageous to enterprises as no one wants to set aside
VND40-50 bil. to have a land site and then pay interests for it each day, and
it is also certain that no one wants to bring out unsalable products.
Duc
said that despite feeling impatient when land sites of projects were wasted,
management agencies should take into full consideration the property market
as well as situations of enterprises.
It is
true that there are many projects abandoned after being constructed halfway,
but it is much more wasteful if projects are finished and then left unused,
according to Duc.
The
frozen market is the key problem as many projects cannot be kicked off in the
absence of buyers.
Although
many regard the solution of imposing progressive tax as an effective cure
which can replace administrative measures when projects are left idle, Duc
said that different diseases did not have one cure but many different cures.
With a
market which is deep in trouble like now, what the market will be in the next
few years, whether it will recover or enterprises will go bankrupt en masse
are unanswered questions.
He
compared the market to a frail patient who should take medicine to recover
before getting out of bed. Therefore, any new procedure and tax should wait
for the property market to recover first, he added.
Trung
Trung
Nam Group is seeking to transfer stakes in hydropower plants Dong Nai 2,
Krong No 2 and Krong No 3 due to the lower-than-expected returns and
prolonged risks.
Dang
Cong Chuan, deputy general director of Trung Nam Group, told the Daily on
Monday that the group has become less enthusiastic about hydropower projects
due to costly investments while the economic efficiency is not as high as
before.
Trung
Nam will sell part of its ownership in Dong Nai 2 hydropower plant project in
which the group holds a 90% stake worth nearly VND3 trillion. The project is
expected to start electricity generation later this year.
Meanwhile,
the group is seeking partners to sell stakes in Krong No 2 and Krong No 3
projects under construction. Trung
Each
hydropower plant project costs around VND1 trillion, of which 30% is funded
by the investor and the remaining 70% is funded by bank loans. It will take
the investor 10 to 14 years to recover capital while profits cannot
compensate for the interest sum and prolonged risks.
A week
ago, Hoang Anh Gia Lai Company announced to sell six hydropower projects,
saying that the sector was not as profitable as rubber planting or real
estate.
Do Duc
Quan, head of the hydroelectricity division of the General Department of
Energy, said that investors are not interested in hydropower projects any
longer as banks’ rising lending rates have pushed up investment expenses.
Meanwhile,
hydropower plants, especially medium and large projects with capacity over
30MW, usually reach low sales price at only VND700-800 per kWh during
negotiations with Electricity of Vietnam. As investment costs have increased,
electricity sales prices must be from VND1,000 a kWh to help secure profits
for project investors.
Chairman
of the Vietnam Energy Association Tran Viet Ngai said that there are just a
few locations for hydropower exploitation that can secure capital recovery.
Those with high profitability have been virtually exploited already.
In
addition, the State has policies to stop investment in medium and small
hydropower projects from now to 2017. Therefore, investors should gradually
withdraw from low-profit schemes, Ngai added.
Intertek
adds new testing laboratory in Hanoi
The
UK-based Intertek has just opened a new apparel/textiles testing laboratory
in
The
new lab performs textile testing for dimensional stability, colorfastness and
seam strength, among others. The lab also supports full testing capability
meeting U.S. Consumer Product Safety Improvement Act (CPSIA) requirements.
Thanh
Nam Nguyen, a senior executive of the company, said that the
In
addition to testing, Intertek also offers many other services for textile,
footwear and apparel customers, including chemical management, inspections,
certification, auditing, safety and compliance training, quality assurance
and risk management.
The
company now has a network of more than 1,000 laboratories and offices and
over 35,000 people in more than 100 countries in the world.
Numerous
Vietnam-Russia projects in the offing
A host
of investment projects by Russian investors will be prioritized and
fast-tracked for implementation in
Minutes
of a meeting between
The
list of the aforesaid bilateral cooperation schemes includes a project to
construct a titanium plant in
As per
the list,
Before
signing the minutes, Quang reported there were a total of 92 Russian-invested
projects in
In the
meantime, bilateral trade has more than quadrupled between 2007 and 2012,
which is expected to reach US$4 billion this year and up to US$20 billion by
2020, according to the Russian deputy minister, Evegenievich.
Of
this year’s expected trade value of US$4 billion,
Two
negotiation rounds have been completed for the signing of the free trade
agreement between
Upon
the customs alliance’s entry, Vietnam enjoy soft tariffs as low as 5%, 3% or
even 0% compared to the current 10% when shipping products to these three
countries, Evegenievich remarked.
Viettel,
IBM cooperate to provide 3G service in Cameroon
The
Vietnamese-Cameroonian joint venture Viettel Cameroon S.A.R.L has agreed to
use IBM Smarter Computing solution software to create a 3G data service
infrastructure in the African nation.
The
new IT platform will help provide advanced mobile services to millions of
subscribers in the country.
Phung
Van Cuong, Chief Information Officer of the Viettel Group, said that the IBM
Smarter Computing solution will unleash new services in
Viettel
Cameroon S.A.R.L is a joint company between the military-run telecoms
provider Viettel and Bestinver Cameroon S.A.R.L. This joint venture is the
largest telecommunications company in the African country, with 6,000
employees and a network covering 81 percent of
Khanh
Hoa targets 2.4 billion USD in export by 2020
The
central province of Khanh Hoa has set itself the target of reaching 2.4
billion USD in export revenues by 2020 with an annual export growth rate
averaging at least 12 percent.
Under
the province’s forthcoming export-import strategy, it will strive to run a
trade surplus of 300-500 million USD each year.
During
the timeframe, the locality will continue its focus on potential sectors for
development, such as ship building, seafood processing, garments and textiles
and handicrafts.
Khanh
Hoa has prepared a string of solutions to expand the market and promote local
brand names as well as investing in infrastructure and services for exports.
To
fulfill the objectives, the province will upgrade the
Last
year, Khanh Hoa’s export earnings exceeded 1 billion USD with a trade surplus
surpassing 500 million USD. In the first seven months of this year, the
province shipped abroad nearly 740 million USD worth of goods, including ships,
seafood, garments and textiles, coffee and wood products.-
Venture
capitalists swoop on IT expo
Venture
capitalists from IDG Ventures, DFJ VinaCapital, Right Ventures, Sequoia
Ventures, Unitus Impact and other investment firms are booked to participate in
the upcoming Vietnam Consumer Digital World Expo 2013, event organisers say.
VCW
2013, will be held on August 30-September 1 at Riverside Palace Convention,
The
200-booth show, organised by International Data Group (IDG), will feature
more than 100 exhibitors from
The
exhibits include hardware, software and IT applications, office equipment,
digital sound equipment, mobile devices, traditional digital equipment and
games.
According
to IDG, the most attractive products include Qualcomm-chip smartphones,
Lenovo tablets, Hasee, Tianbo, Gotech, Vmax, Uc-Logic; sound products by Koss
and Philips; Pentax and GoPro digital cameras and entertainment application
packages by Musicwave, Guinness, Music Code, Jarguar Suhyoung and other
firms.
The
18th annual VCW also showcases mobile application trends. Mobile applications
are rapidly developing and creating numerous jobs for programmers and
software developers. IDG expects the show would update Vietnamese programmers
and developers about the latest worldwide developments.
Along
with the exhibition, IDG will hold the Demo ASEAN Forum. Demo has been a
launch pad for emerging technologies and trends worldwide for over 22 years,
and this is the first Demo ASEAN event to be hosted by
The
three-day showcase and conference will highlight new IT products. The event
is set to provide a blend of new IT product demonstrations and networking
with other innovative peers, decision makers, and especially sought-after
venture capitalists. The event promises to offer a close-up look at the
latest trend-setting technologies.
VCW
2013’s main sponsor is Qualcomm, a leading manufacturer of smartphone and
tablet chips. At the show, Qualcomm, HTC, LG, Nokia, QMobile, Mobistar will
exhibit their latest smartphones and tablets that feature a Qualcomm
Snapdragon chip.
Online
database clarifies firm records
On-line
registration and information services for business enterprises, including
e-signature and e-payment capabilities, were recently launched through
the National Business Registration Portal (NBRP), according to the Agency for
Business Registration under the Ministry of Planning and Investment.
People,
enterprises and investors now can easily find information about any domestic
business entity incorporated under the Enterprise Law on the portal. “This is
very significant to the development of the business community,” said Bui Anh
Tuan, deputy director general of the Agency for Business Registration. He
noted that present and prospective business partners would be able to verify
the identity of any enterprise, its business lines, its owners and their
shares, the legal representatives of the enterprise as well as review annual
financial statements easily and inexpensively.
The
portal is a part of the National Business Registration System – a
computerised system running in 65 business registration offices nationwide
since 2010. As of July 2013, registered information for more than 780,000
enterprises, including over 150,000 annual financial statements of
shareholding companies have been made publicly accessible through the NBRP in
Vietnamese and English.
Thanks
to the information that the system offers, the Agency for Business
Registration announced that some banks had already signed information
procurement agreements to collect information on borrowers. Such access to
enterprise information helps reduce business risks.
From
April to August 14, there were 41,828 visits to the NBRP for seeking
information of enterprises and guidance for the establishment of businesses
in
“In
the first stage, local business registration offices and enterprises will
need time to get familiar with the online registration function,” Tuan said.
“Obviously, online business registration is more convenient and advanced than
the traditional model. I do believe that this new model will be popular in
the near future.”
Since
2008, institutional collaboration between Ministries of Planning and
Investment, Ministry of Finance, Ministry of Public Security and the General
Statistics Office resulted in each registered enterprise being given a unique
identification code recognised nationwide.
For
the first time, electronic links for data have been shared between the
Ministry of Planning and Investment and Ministry of Finance, and the
government has also implemented one-stop-shop registration which is conducted
using a consolidated form for business, tax and enterprise seal registration.
Over 600 staff at 65 provincial business registration offices use the same computerised
work flows that have increased their efficiency. In 2012, 47 per cent of
business registrations were conducted within two days and 39 per cent of
registrations were conducted in 3-5 days and these statistics are improving.
Tuan
said the agency was also working to add information about foreign invested
enterprises, science and technology institutions, financial institutions and
household businesses in the NBRS. “In the future, the system will contain all
the necessary legal information about businesses operating in the country,”
he said.
Foreign
investors snub power generation sector
Vietnam’s
policy to purchase power at low prices and hold a controlling stake in
state-owned power projects has discouraged many foreign investors in
the power sector.
Vu Van
Hau, project manager of investment consulting firm Vietnam Invest Network
told VIR that the firm had since early this year worked with more than 20
power investors from France, Germany, the Netherlands, the UK, the US, Japan
and South Korea, who wanted to both buy and invest into Vietnam’s power
projects.
“But
after exploring Vietnam’s power market, the investors decided to wait. They
are waiting for the market to be opened wider,” Hau said, referring to
Vietnam’s current policy to purchase power at low prices from power
generators, and allow foreign investors to acquire a maximum 49 per cent
stake in state-owned power projects.
A firm
source said that since 2011, a major Norwegian firm had sought opportunities
to acquire hydropower plants of at least 50 megawatts in Vietnam and had
worked with the state-run Electricity of Vietnam (EVN) and other state-owned
enterprises (SOEs).
However,
as of yet no deals had inked so far. The 49 per cent stake cap for foreign
enterprises in state owned hydropower projects was cited as the reluctance to
invest.
Additionally,
power purchasing prices from monopoly electricity provider EVN, are three or
four times lower on average than regional neighbours such as Thailand and
Malaysia.
The
Norwegians were looking to own at least a 50 per cent stake in hydropower
projects, but also wanted to see higher power purchasing price levels from
EVN.
“If
the Vietnamese government maintains this 51 per cent stake, many foreign
investors will not invest into Vietnam’s power industry because they cannot
play a decisive role in implementing projects,” said Tran Trong Binh, senior
attorney from France’s Hanoi-based international law firm Audier &
Partners Vietnam LLC.
Binh
told VIR that under the existing Investment Law, foreign investors can build
power projects with 100 per cent of their capital. “But the power purchasing
prices are too low, making it hard for foreign investors to earn a profit and
meaning EVN maintains a monopoly in power distribution and price setting,” he
said.
“In
order to create a level playing field for private and state firms, the state
should hold onto key projects and allow private firms to invest in other
projects which will generate more employment and tax revenue,” Binh added.
EVN
increased electricity prices by 5 per cent on August 1, despite the
Government Office’s Chairman and Minister Vu Duc Dam telling the press just
two days earlier that EVN must seek feedback for any power price hike plan.
However,
according to Dam, Vietnam could not raise electricity prices as this would
have a detrimental effect on people’s lives.
“Sooner
or later, Vietnam will have to have a competitive power market and a roadmap
for such a market is gradually being implemented,” Dam said.
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Bảy, 31 tháng 8, 2013
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