Workers of Ca Mau 1 Power Plan which is under the operation of PV Power. — Photo pv-power.vn

HA NOI (Biz Hub) — Measures for the privatisation of PetroVietnam Power Corporation (PV Power) have been hastened with the process expected to be completed within this year.

According to the State-owned Viet Nam Oil and Gas Group (PetroVietnam), which holds 75 per cent of charter capital in PV Power, under the approved privatisation roadmap for PV Power, the value of PV Power will be finalised this month.

The privatisation plan is expected to be approved in August. The initial public offering (IPO) will be held in October and the official launch of the joint stock company will take place in December.

As parts of efforts to speed up privatisation, PV Power, the second largest power producer in Việt Nam, has focused on restructuring its operation, including the divestment from four member companies and four joint venture companies, handing Phu Quy wind power plant to the Electricity of Viet Nam and acquiring the Vũng Áng 1 Power plant from PetroVietnam.

In addition, PV Power is working closely with the finance, industry and trade ministries and foreign investors to seek strategic partnership and consultancy units to complete the privatisation plan and keep up with the deadlines.

Time was ripe for the privatisation of PV Power as the corporation reported higher than expected businesses results in the 2012-15 period and it was developing a five-year business plan which would be completed this month, a representative from PV Power said.

PV Power reported a total output of more than 21 billion kWh, a net profit of VND2.6  trillion (US$116 million) and contributing VNĐ1.8 trillion to the State budget last year.

This year, the PetroVietnam's power arm aimed to generate 21 billion kWh in 2016, earn an after-tax profit of VND603 billion and contribute VNĐ1.1 trillion to the State budget.

Under Decision No 1011/QD-TTg of the Prime Minister, dated July 3, 2014, on the restructuring of PetroVietnam, the privatisation of PV Power will be implemented during the 2015-16 period.

Ongoing efforts

After missing privatisation targets in the 2011-15 period, the government of Viet Nam is gearing up for the 2016-20 period to reduce the number of State-owned enterprises (SOEs) to some 200, or half of the 2015 number.

The privatisation plan for the 2016-20 period was being developed by the finance ministry.

According to the Corporate Finance Department under the Ministry of Finance, the privatisation of SOEs must focus on quality rather than quantity, meaning that after being privatised, enterprises must operate more efficiently and with enhanced competitiveness, while the State capital at the SOEs was collected at the highest values.

Statistics of the finance ministry showed that in the first five months of this year, privatisation plans of 37 SOEs were approved.

During the 2011-15 period, Viet Nam set an ambitious target of privatising 432 SOEs, out of which some 100 failed to complete privatisation as of the end of 2015, due to a variety of bottlenecks, such as clarifying the values of SOEs and seeking strategic stakeholders. — VNS