Handing over rural power grids: Many obstacles remain.

(Baonghean) - The handover of rural low-voltage power grids to the electricity sector is a major policy of the State, aimed at overcoming limitations in electricity supply and creating fairness in electricity use between rural and urban residents. In recent times, the handover of rural low-voltage power grids in the province has achieved certain results, but there are still difficulties and obstacles that need to be addressed.

Maintenance and upkeep of the power grid system before the rainy and stormy season in Thanh Chuong. Photo: Thanh Chung

According to the plan, Dien Chau district was supposed to complete the handover of the rural low-voltage power grid to 100% of its communes and towns in 2014. However, in reality, this goal is difficult to achieve. As of October 16, 2014, 29 communes and towns in the district had handed over their rural power grids to the Electricity sector for management, with a total of 136 out of 183 transformer stations. Ten communes and two cooperatives have yet to hand over their grids. Dien Chau Power Company has worked with the communes and electricity service cooperatives, but has not yet reached an agreement on the handover or requested a postponement. Mr. Mai Thanh Hung, Chairman of the Dien Hong Agricultural and Electricity Service Cooperative, said: In 1990, the cooperative started receiving electricity. At that time, the people contributed 50% and the cooperative contributed 50% to build the power infrastructure from 35KV to 0.4KV. By 1997, households using electricity were required to contribute 500,000 VND per household.

Since then, the cooperative has managed electricity profitably and used the profits to invest in upgrading the entire 0.4KV power line and adding three more transformer stations; 100% of the power lines are insulated cables. Thanks to this, the quality of electricity in Dien Hong is always guaranteed. We agree with the State's policy of handing over the rural power grid to the Electricity sector. However, the cooperative has invested tens of billions of dong in upgrading the power grid from 1991 to the present, so the cooperative requests an extension of the handover period to recover some of the capital to invest in expanding other business services, ensuring jobs and livelihoods for its members. The Cooperative's Management Board also requests that, when handing over to the Electricity sector for management, the assets must be assessed according to their current condition.

Mr. Tang Van Luyen, Vice Chairman of the Dien Chau District People's Committee, stated: Since the Provincial People's Committee approved the plan for handing over the power grid in 2014, the district has held meetings with commune chairmen and cooperative leaders to disseminate the handover directives. However, there are currently two difficulties in the district: firstly, in Dien Hong and Dien Nguyen communes, residents have not yet agreed to hand over the power grid because the 0.4KV grid was built primarily with contributions from the people, and is currently operating profitably, so they want to maintain it. Secondly, the Dien Chau Electricity Branch needs a large workforce to receive and manage the handover. Currently, more than 11,000 households using electricity have not yet handed over their grids, requiring a large workforce to handle the handover process. Therefore, we propose that the Provincial Steering Committee strengthen the workforce for the Dien Chau Electricity Branch to focus on the handover process to ensure the plan is met; and secondly, we propose that the Department of Industry and Trade inspect and inform the relevant units about "conditional business licenses" so that the communes are aware. Dien Chau district plans to complete the handover of the power grid in 2014, while the two communes of Dien Hong and Dien Nguyen are striving to complete the handover in early 2015. The district is directing efforts to raise public awareness and gain people's consent. While there are immediate benefits, in the long run, the deteriorating power grid infrastructure will lead to increased electricity consumption and affect grid safety.

Meanwhile, in the mountainous district of Tuong Duong, the handover of the power grid has been supported by local authorities, but the difficulty lies in the lack of personnel for operation and takeover by the power sector. Mr. Hoang Dinh Hoi, Deputy Head of the District's Department of Industry and Trade, stated: 15 out of 18 communes and towns in the district have electricity. To date, 117 substations have been handed over, with 5 remaining, including 4 in Tam Hop commune and 1 in Yen Na commune. However, Tuong Duong district is striving to complete the handover of all 5 remaining substations to the power sector by the end of October 2014 at the latest.

To date, 394 communes in the province have handed over their rural low-voltage power grids to Nghe An Power Company for management and electricity sales. However, 28 communes have yet to complete the handover. Despite the achievements, the handover of rural low-voltage power grids in the remaining communes is progressing too slowly compared to the directives of the Provincial People's Committee and the policies and plans set forth by the Northern Power Corporation. The slow progress in handover and return is due to several difficulties and obstacles encountered during implementation, such as: Rural low-voltage power grid projects outside the REII Project were not built in strict compliance with State regulations and have been transferred through multiple owners; most no longer have their original designs, making surveying and determining their remaining value very difficult and time-consuming; and the units directly involved in the handover process have not been proactive enough in carrying out the handover.

Some localities lack consensus and consistency in directing asset owners, leading to delays; in localities with REII projects, after completion and commissioning, cooperatives do not fully allocate depreciation funds annually to repay loans and interest on construction investments, but instead use the depreciation fund to pay off loan principal for remuneration, salaries, and other expenses, effectively creating a "profitable business" situation. This causes some cooperatives to delay and hinder the handover process. Determining the capital structure is difficult because most owners of rural low-voltage power grid projects lack original records, accounting books, and related documents to support the repayment process. Currently, the remaining owners of rural low-voltage power grid assets agree to hand over the assets through capital repayment; therefore, the handover and repayment documentation must be complete and comply with regulations.

For assets financed by the people and cooperatives for construction projects, original documents are required, including: resolutions of the People's Council and People's Committee of the commune or resolutions of the general meeting of members; documents, books, receipts, and lists of contributions signed by the contributors. However, due to the investment process spanning many years, most cooperatives do not have complete original documents as required. Furthermore, the process of counting and cataloging assets, allocating capital sources, preparing documentation, organizing meter readings, repairing the power grid, consolidating production, and seeking investment capital for renovation requires a certain amount of time. Therefore, it cannot be carried out simultaneously in many communes, which is also a reason for the delay in the handover of rural low-voltage power grids. On December 4, 2013, the Ministry of Industry and Trade and the Ministry of Finance jointly issued Circular No. 32/2013/TTLT-BCT-BTC guiding the handover and return of investment capital for rural low-voltage power grid assets, replacing Joint Circular 06/2010, initially addressing the shortcomings in the handover and return of rural low-voltage power grids.

The above facts show that, in order for the handover of rural low-voltage power grids to be completed, the electricity sector needs to quickly repay capital, invest in upgrading, continue to exploit and serve electricity users in rural areas even better. Only then will it create high consensus among the people and cooperatives.

Quynh Lan