Only decide when there is a guaranteed financial mechanism.

The Ministry of Planning and Investment (MPI) has just sent a report on the appraisal of the Project to separate the National Power System Dispatch Center (A0) from the Vietnam Electricity Group (EVN) to establish a one-member limited liability company under the Capital Management Committee to Prime Minister Pham Minh Chinh and Deputy Prime Minister Tran Luu Quang.

Accordingly, on August 1, the Ministry of Planning and Investment sent an official dispatch to the Ministries of Finance, Industry and Trade, Justice, Labor, Invalids and Social Affairs, and Home Affairs requesting their comments on the project and draft Appraisal Report. By August 16, the Ministry received responses from the Ministries of Justice, Labor, Invalids and Social Affairs, and Home Affairs.

On August 16, the Ministry of Planning and Investment held a meeting to unify opinions and complete the appraisal report according to regulations, with the participation of representatives of ministries and branches. However, the representative of the Ministry of Home Affairs was absent.

Is the charter capital of 735 billion enough for A0 to operate?

The appraisal report assessed that the Project to separate A0 from EVN to establish a new LLC mentioned information about the National Electricity System and Electricity Market Operation LLC (NSMO), but did not mention EVN's information about charter capital, assets, etc. after separating A0. Therefore, the Capital Management Committee is requested to review and supplement the information.

In addition, EVN and A0 have had their Q2/2023 financial statements. The Capital Management Committee urgently coordinated with the Ministry of Finance and the Ministry of Industry and Trade to comment on this report in the official dispatch on the appraisal of the Project.

Ensuring the conditions on the charter capital of the enterprise, according to the content of the Project, after separating from EVN, the charter capital of NSMO is expected to be 735 billion VND, meeting the conditions according to regulations.

The appraisal report stated that NSMO is the only enterprise responsible for coordinating the national power system, so ensuring that NSMO has sufficient resources to operate and operate continuously is extremely important.

Therefore, the Ministry of Planning and Investment requested the Capital Management Committee and EVN to review, calculate and confirm that the capital level as proposed in the Project has ensured stable operation and management for NSMO after being separated to operate independently.

In addition, supplement the basis, contents, and asset categories forming the equity and charter capital of A0.

Review, operating expenses, working capital of A0, working capital, investment capital for NSMO to operate stably until the end of 2023 (during the transfer period from the Capital Management Committee to the Ministry of Industry and Trade).

However, at the meeting on August 16, the Ministry of Finance said that there was not enough basis to have specific comments on charter capital because "the equity indicator on the enterprise's financial statements does not include the basic depreciation capital indicator and the documents attached to the Project do not include the Q2/2023 financial statements of EVN, A0 and documents related to EVN providing basic depreciation capital to A0".

Need to supplement capital plan for NSMO

Regarding the production, business and investment development plan for the 5 years after the establishment of NSMO, the Project assessment report has not clarified whether the proposed charter capital is sufficient to meet and implement the plan. Therefore, it is requested that the drafting agency clarify this content.

In addition, the Project needs to supplement and complete some basic contents, such as: explanation of total cost data required for production, business and investment activities; ability to arrange capital sources.

According to the Project, the investment project items of A0 have been approved by EVN in principle, however, the implementation progress, the necessity and impact of these projects on the production and business activities of NSMO have not been fully explained.

To ensure stable and continuous operation of the power dispatch system in the long term, the report recommends that the Capital Management Committee and EVN review 9 ongoing projects of A0 to develop a plan to continue investing and implementing them during the transition period of handing over NSMO to the Ministry of Industry and Trade.

At the same time, there is a plan to allocate capital for these projects within the total initial charter capital of NSMO, ensuring that these projects are not interrupted or stopped.

In addition, it is recommended that the Capital Management Committee coordinate with the Ministry of Industry and Trade to develop a plan to ensure resources for NSMO to implement the 5-year and annual plans for stable operations.

Financial mechanism for NSMO in 3 phases

In order for NSMO to operate continuously and stably after its establishment and transfer to the Ministry of Industry and Trade, the Ministry of Planning and Investment found it necessary to have a financial mechanism for NSMO in 3 phases.

Phase 1: A0 from separation from EVN to establish NSMO until the end of 2023.

Phase 2: From January 1, 2024 until the revised Law on Prices takes effect.

Phase 3: After the revised Law on Prices comes into effect, it is recommended that the Ministry of Industry and Trade develop a financial mechanism to ensure that NSMO will have a mechanism to operate.

Therefore, it is recommended that the Capital Management Committee closely coordinate with the Ministry of Industry and Trade to clearly determine the time to complete the development of a circular guiding the costs of power system dispatch and electricity market transaction management to ensure the necessary costs for A0's operations.

On that basis, there is a basis to report to the Prime Minister the time to complete the separation of A0 to establish NSMO.

“Separating A0 from EVN to establish a single-member LLC should only be considered and decided when there are financial mechanisms to ensure stable operation and management of NSMO,” the appraisal report stated.

In addition, the appraisal report also recommends that EVN complete the plan for labor arrangement and use; at the same time, consult the Ministry of Finance on financial handling in the handover of capital and assets.

It is recommended that the Capital Management Committee coordinate with the Ministry of Industry and Trade to review the progress of the revision of the above documents and have a roadmap for drafting appropriate documents to ensure that when the separation of A0 is completed, the legal documents will simultaneously take effect.

On that basis, determine the time and roadmap for implementing the separation of A0 and completing the establishment of NSMO, ensuring the earliest possible time according to the direction of the Government leaders in Notice No. 263/TB-VPCP.

The Ministry of Planning and Investment also requested the Capital Management Committee and EVN to coordinate with the Ministry of Industry and Trade to further evaluate the advantages, disadvantages and effectiveness in choosing the model of the Board of Members or the model of the Company Chairman for NSMO, on that basis, propose a suitable model.

Source