Scheme for restructuring Vietnam Electricity for the from now until the end of 2025

Scheme for restructuring Vietnam Electricity for the from now until the end of 2025 (Image from the internet)

On October 25, 2024, the Prime Minister of the Government of Vietnam issued Decision 1271/QD-TTg approving the Scheme for restructuring Vietnam Electricity for the from now until the end of 2025.

Scheme for restructuring Vietnam Electricity for the from now until the end of 2025

Directions and solutions for restructuring the Vietnam Electricity until the end of 2025 are as follows:

(1) Business Sectors

The business sectors shall be implemented according to Decree 26/2018/ND-CP, Decree 105/2024/ND-CP and other documents amended, supplemented, or replaced regarding the organization and activities of EVN as issued by competent authorities according to legal regulations.

(2) Innovating Corporate Governance

- Strengthen the restructuring of corporate governance, focusing on the following areas:

+ Perfect the management system;

+ Formulate and implement EVN's Development Strategy according to Decision 538/QD-TTg dated April 1, 2021, by the Prime Minister of the Government of Vietnam;

+ Research solutions and mechanisms that deliver benefits and effectiveness for each stage of the electricity market's development;

+ Enhance management of investment projects, ensuring progress and investment efficiency;

+ Strengthen the work of forecasting and risk management; improve the capacity for auditing supervision and inspection; enhance anti-corruption and waste prevention;

+ Review, build plans, methods, and organize the implementation of handling weak, loss-making projects and enterprises under EVN following regulations.

- Apply international practices in innovating corporate governance

+ Continue cooperating with various ministries to perfect the management system, mechanisms, policies aimed at increasing autonomy for EVN in business operations suitable with market mechanisms and international practices; cooperate with various ministries to submit to competent authorities the amendments/issuance of the organizational regulations suitable according to prescriptions, relevant legal documents...

+ Apply international company governance standards to EVN and its member units.

(3) Develop financial restructuring plans and strengthen financial management work

- Develop Business Production and Development Investment Plans, financial plans to ensure optimal, efficient, and flexible use of mobilized capital sources with the goal of capital preservation and development, ensuring financial safety indicators and criteria as required by domestic and international lending credit institutions;

- Develop financial plans, capital balancing plans, and cash flow to analyze and evaluate the impact of solutions on EVN's financial situation, the ability to balance capital sources for the development of important electricity projects until the end of 2025;

- Develop plans to increase charter capital appropriate to each stage to meet capital requirements for production, business, and development investment until the end of 2025;

- Research EVN's financial mechanisms during the competitive retail electricity market phase. Develop plans to separate the organization and accounting costs of the distribution, and retail sales divisions of Electricity Corporations according to the competitive retail electricity market roadmap;

- Develop a wholesale electricity pricing mechanism between the parent company - EVN and electricity distribution business units suitable with the retail electricity price adjustment mechanism according to market mechanisms;

- Perfect and enhance financial accounting management; asset and capital management, ensuring cash flow balance:

+ Amend and supplement cost standards to save production costs in each production business stage;

+ Strengthen inventory management, use of fixed assets;

+ Closely monitor economic - technical indicators affecting production costs, electricity transmission, distribution.

(4) Personnel restructuring plan, management apparatus organization

- Plan to restructure the management apparatus organization

+ Consolidate the management, executive apparatus;

+ Implement new organizational models aimed at reducing indirect management labor at intermediate management levels, subordinate units to ensure streamlined apparatus, efficient, and effective operation, and limit overlapping functions and tasks at the parent company;

+ Research organizing the Operation Control Center (OCC) to centrally control hydropower plants and renewable energy.

- Personnel restructuring plan

+ Regularly review and amend workforce, labor standards in all stages of the electricity production chain, business to ensure conformity with the production business model and characteristics, with an emphasis on applying advanced science, technology;

+ Regularly evaluate and apply appropriate solutions to enhance the quality of human resources, appropriately allocate and arrange labor in accordance with work requirements in the new situation; reduce the workforce, especially the management team, in transmission and distribution stages; sensibly transfer surplus labor from units exceeding prescribed staffing to avoid new recruitment; apply mechanisms, policies to solve surplus labor, older workers whose health does not meet work requirements;

- Continue to amend and perfect mechanisms and policies on salary, salary plans suitable with production, business efficiency and labor productivity.

See detailed contents at Decision 1271/QD-TTg effective from October 25, 2024.

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