Salaries in the electricity sector: The Ministry of Industry and Trade is not uninvolved!

Minister Vu Huy Hoang argued that the electricity sector is losing money but salaries remain high because of "policy losses," and not related to EVN's corporate governance.

Responding to the People's Newspaper (afternoon of January 6th) regarding the opinion that the Ministry of Industry and Trade has disregarded the salary component of the electricity sector in recent explanations, Minister of Industry and Trade Vu Huy Hoang affirmed: "I have also had the opportunity to explain and report to the National Assembly and voters nationwide when participating in the questioning session with Minister Vuong Dinh Hue. I would like to say that the Ministry of Industry and Trade has never stated that it does not pay attention to the salaries of the electricity sector."

Recently, EVN announced the average salary at 7.3 million VND.

Minister Vu Huy Hoang stated that, regarding salary-related indicators, the Ministry of Labor, Invalids and Social Affairs (MOLISA) has been assigned by the Government as the focal agency on this matter. For state-owned enterprises, MOLISA only participates; it does not make decisions or regulate salaries for the electricity sector. MOLISA, as stipulated, is the lead agency responsible for reviewing and deciding on salary rates and, consequently, the salary fund for the parent company of Vietnam Electricity Group (EVN). The basis for salary approval is the electricity production and business performance indicators.

The Minister cited an example: in 2010, the electricity sector's target was over 90 billion kWh. The Ministry of Labour, Invalids and Social Affairs set the wage rate at 5,434 VND per 1,000 kWh, which, multiplied by over 90 billion kWh, would determine the wage rate and wage fund for the parent company of the Group. The remaining member companies, also state-owned enterprises, were subject to review and decision-making by the Group's Board of Members, after consulting with the Ministry of Labour, Invalids and Social Affairs.

Therefore, this means that the issue of wages in the electricity sector, as a state-owned enterprise, is subject to scrutiny and decision-making by state management agencies, primarily the Ministry of Labor, Invalids and Social Affairs.

The Ministry of Industry and Trade is responsible for participating in the review of the electricity sector's plan registration, including wage issues, in coordination with the Ministry of Labour, Invalids and Social Affairs, but the final and leading voice rests with the Ministry of Labour, Invalids and Social Affairs.

Recently, following reports of inconsistent salary levels in the electricity sector, the Minister of Labor, Invalids and Social Affairs decided to establish an inspection team. In my opinion, the inspection results will reveal how the electricity sector is implementing salary policies.
I would like to elaborate on the issue of why, despite losses, employees still receive relatively high salaries, as reflected in public opinion. The electricity sector simultaneously conducts business and fulfills political tasks assigned by the Government. The recent losses in the electricity sector are business losses, which are considered "policy losses."

If the regulations for manufacturing businesses were followed correctly, the electricity sector would be allowed, in principle, to sell its products at a price higher than the cost price, and there would be no losses. However, I want to emphasize that this is a policy loss, and it is not related to the corporate governance of the Vietnam Electricity Group. If they implemented market-based pricing mechanisms, the losses would not have occurred.

Regarding the issue of wages in the electricity sector, we are always ready to participate and offer our opinions to the Ministry of Labour, Invalids and Social Affairs, and not remain on the sidelines…/.

According to VOV