Power prices on the island were previously two to five times higher than those on the mainland. — VNA.VNS Photo Ngoc Ha

HA NOI (Biz Hub) — The price of power on Vietnamese islands has been slashed to the same as those on the mainland. Previously, despite Government subsidies, they were up to five times higher.

The energy cuts are part of a strategy to improve people's living on the islands, to boost economic development - and, importantly, heighten security in East Sea territories.

Electricity of Viet Nam (EVN) started applying the new retail prices at the weekend.

The new retail prices range from VND1,100 to 4,000 (5 to 18 cents) per kWh [In Viet Nam, the hourly rate increases with more usage. This is an attempt to stop wastage].

The new island prices cuts are still heavily subsidised by the Government as in the past.

EVN predicts that the cuts will increase power consumption on the islands.

However, it also warned that investment in power production facilities on the islands was still limited.

Therefore it has advised the authorities on islands that have not yet been linked to the national grid by undersea cable to develop energy consumption and saving plans.

Several larger groups of islands were recently supplied with electricity from the mainland, including Co To, Phu Quoc and Van Don. In October, Ly Son Island in central Quang Ngai Province will also be linked to the national grid.

The price cuts are already having an effect. On central Binh Thuan Province's Phu Quy Island, residents are keen to buy electrical appliances and businesses have been alerted to new opportunities, according to vice-chairman of the district People's Committee, Ta Minh Nhat.

Power prices on the island were previously two to five times higher than those on the mainland.

This forced many processors and manufacturers to produce a limited amount of goods - or move to the mainland.

Nguyen Phuoc Kim, vice director of Kim Hoa Seafood Processing Company based in the district, said that in recent years, seafood was mostly taken to the mainland for processing.

Tran Van Hien, head of the district's Seafood Processors' Association, said many of the association's 16 members now planned to resume business on the island itself.

"The price cuts will help reduce production costs. We can process fish at the island instead of renting frozen warehouses on the mainland," he said.

Ethnic people pay more

Hundreds of ethnic minority householders in Thu Ngac Commune in northern Phu Tho Province have been told to pay extra for meters to receive reliable power through the national power grid, which was connected early this year.

As a result, many are still forced to use the limited power produced by a local hydro-power plant.

Ha Van Nguyen, a Muong ethnic resident in Co Son 1 Zone, said last week electricians went to his house and asked him to pay VND300,000 (US$14.20) to install a meter.

Nothing happened because he did not have the money. His children still study under the flickering light produced by the hydro-power plant nearby.

However, his neighbour, Nguyen Thi Lam, paid the fee and now has bright light.

Ha Van Dai, another resident in Co Son 2 Zone, said he was told to pay VND500,000 ($23.80) to have a meter installed.

He paid for a total of four meters for his family and relatives, but no one came to do the work.

Ha Van Dinh, village head in Co Son 2 Zone, said that electricians did not inform him about the installation fee.

The first six households had to pay VND300,000 ($14.20), and later increased this to VND500,000.

To compound matters, the electricians refused to accept money to put a meter in the village head's own home because they said he was not a priority.

Chairman of the communal People's Committee Hoang Van Liem said that about 70 households in Co Son 1 and 2 had agreed to pay the price to get electricity.

There were about 200 households in the commune, and nearly half of them were living in poverty, he said.

Hoang Dinh Nghia, a fee collector in Co Son 2, said he was told to collect different fees in the two districts.

Deputy director of the Tan Son Electricity Company Hoang Kim Doan said in principle, people only paid to connect electricity equipment to the electricity network after the meter was installed.

Other additional fees were unauthorised, he said.

The company has set up a team to inspect the incident.

However, Doan refused to comment about the actions of his employees. — VNS