Decision No. 852/QD-TTg dated June 14, 2017 of the Prime Minister on approving the general scheme to restructure affiliates of Vietnam electricity during 2017 - 2020

THE PRIME MINISTER

Decision No. 852/QD-TTg dated June 14, 2017 of the Prime Minister on approving the general scheme to restructure affiliates of Vietnam electricity during 2017 - 2020

Pursuant to the Law on Government Organization dated June 19, 2015;

Pursuant to the Law on Electricity dated December 03, 2004 and Law on amendments to some articles of the Law on Electricity dated November 20, 2012;

Pursuant to the Decision No.58/2016/QD-TTg dated December 28, 2016 of the Prime Minister on criteria for classification of wholly state-owned enterprises, partially state-owned enterprises and list of state-owned enterprises undergoing restructuring in 2016 - 2020;

Pursuant to the Decision No. 2146/QD-TTg dated December 01, 2014 of the Prime Minister on approval for plan to restructure the industry and trade sector to serve the cause of national industrialization, modernization and sustainable development by 2020 and the orientation towards 2030;

Pursuant to the Decision No. 168/QD-TTg dated February 07, 2017 of the Prime Minister on approval for scheme to restructure electricity sector during 2016 - 2020 and the orientation towards 2025;

At the request of the Minister of Industry and Trade and Vietnam Electricity’s Board of Members,

DECIDES:

Article 1.The scheme to restructure affiliates of Vietnam Electricity during 2017 - 2020 is approved. To be specific:

I. OBJECTIVES

Develop Vietnam Electricity (hereinafter referred to as “EVN”) into a strong economic group that possesses modern technologies and management systems involving a high degree of specialization, thereby ensuring increased productivity and effective and sustainable operations; play a key role in maintaining the satisfaction of demands for electric power for socio-economic development, national energy security and national defense assurance, and in developing Vietnam’s electric power in a strong, sustainable and competitive manner, thereby achieving greater international integration and successfully developing a group that serves the public, society and customers in a manner that always maintains good quality.

II. CONTENTS

1. Business lines

a) Main business lines

- Electricity generation, transmission, distribution and trading; operation of the system for generation, transmission, distribution and supply of electricity in the national electricity system;

- Electricity import and export;

- Electricity investment project and investment management;

- Management, operation, repair, maintenance and upgrade of electrical, mechanical, control and automation equipment installed for electricity generation, transmission and distribution and in electrical works; electrical testing;

- Project management consulting, design and survey consulting, investment project establishment consulting, bidding consulting, power supply work, transmission line and substation construction assessment and supervision consulting.

b) Relevant business lines in direct service of main business lines

- Production of electrical equipment, electrical power engineering investment;

- Power construction;

- Provision of automation and control services; provision of information technology services (research, development, training and consulting) in foreign and domestic markets, exclusive-use telecommunications network system management;

- Import and export of fuel and materials in service of electricity sector;

- Installation, supervision of installation of telecommunications - information technology equipment; production of building materials, thermal insulators, electrical insulators, personal protective equipment;

- Project management consulting; investment project establishment consulting, bidding consulting, telecommunications - information technology work and industrial and civil work estimation and construction supervision consulting;

- Investment in electrical works using state capital granted to EVN;

- Human resource training and international cooperation in employee training;

- Lease of buildings (doing business at EVN Head Office, No. 11 Cua Bac Street, Ba Dinh District, Hanoi).

2. Plan to restructure affiliates of EVN during 2017-2020

a) Parent company - EVN will still be a wholly state-owned single-member limited liability company.

b) The units will have its organizational structure and operation mechanism remained unchanged and will be affiliated to the Parent Company - EVN include:

- Son La Hydropower Company;

- Hoa Binh Hydropower Company;

- Ialy Hydropower Company;

- Tri An Hydropower Company;

- Tuyen Quang Hydropower Company (The Ministry of Industry and Trade shall take charge and cooperate with relevant Ministries and authorities and EVN in considering formulating an equitization plan (the State holds a controlling ownership interest) and report it to the Prime Minister under the direction of the Prime Minister in the Notice No. 150/TB-VPCP dated March 21, 2017 of the Government Office);

- Se San Hydropower Development Company;

- Huoi Quang - Ban Chat Hydropower Company;

- Hydropower Project Management Board No.1;

- Hydropower Project Management Board No. 4 (its operations will be ceased after finalization of projects);

- Hydropower Project Management Board No. 5;

- Hydropower Project Management Board No. 6;

- Son La Hydropower Project Management Board;

- Ninh Thuan Nuclear Power Projects Management Board (EVN renamed it to suit new functions and tasks of the Projects Management Board);

- Thermal Power Project Management Board No. 2;

- EVN Construction and Technology Investment Management Board;

- Electric Power Trading Company;

- EVN Information and Communication Technology Company (previously EVN Information and Communication Technology Centre);

- EVN Information Centre.

c) Wholly EVN-owned enterprises include:

- National Power Transmission Corporation;

- Northern Power Corporation;

- Central Power Corporation;

- Southern Power Corporation;

- Hanoi city Power Corporation;

- Ho Chi Minh City Power Corporation;

- National Load Dispatch Centre (it will be converted into a single-member limited company during 2019-2020 as prescribed in the Decision No. 168/QD-TTg).

d) Enterprises over 50% of charter capital of which is held by EVN include:

- Power Engineering Consulting Joint Stock Company 1;

- Power Engineering Consulting Joint Stock Company 2;

dd) Enterprises under 50% of charter capital of which is held by EVN include:

- Equitizing Power Generation Corporations 1, 2, 3 (at least 51% of charter capital of Power Generation Corporations will be held by EVN by the end of 2019 and the capital held by the State will be divested  below the controlling level);

- Vinh Tan 3 Energy Joint Stock Company (its capital will be divested after closing Vinh Tan 3 thermal power plant project).

e) EVN will divest its capital in the following enterprises:

- EVN Finance Joint Stock Company;

- Thu Duc Electro Mechanical Joint Stock Company;

- Dong Anh Electrical Equipment Corporation - Joint Stock Company;

- Thuan Binh Wind Power Joint Stock Company;

- Power Engineering Consulting Joint Stock Company 3;

- Power Engineering Consulting Joint Stock Company 4.

g) Other contents:

- The Ministry of Industry and Trade shall take charge and cooperate with the Ministry of Finance and the Ministry of Planning and Investment in considering selling part or entire capital of Power Generation Corporations in accordance with regulations of law and equitizing Power Generation Corporations in an effective manner;

- Procedures for transferring Nghi Son 1 Thermal Power Company to Power Generation Corporation 1 will be carried out;

- Regarding the power projects that are invested in by EVN and are in progress, EVN will establish financially dependent power generation companies in order to manage power plants after closing projects and will equitize such companies in accordance with regulations of law.

3. Promoting restructuring of corporate governance. To be specific:

a) Develop management institutions;

b) Consolidate organizational structure;

c) Renovate and improve efficiency of financial and accounting management; thoroughly manage assets and capital sources and maintain cash flow. Promote thrift practice, properly manage costs, especially fuel costs, energy costs and indirect costs, reduce prices and publish input costs;

d) Manage and employ personnel in an effective manner, reform salary policies; undertake public sector downsizing, especially management staff and electricity generation and distribution staff;

dd) Recruit and provide training for personnel, including skilled personnel and technical personnel;

e) Apply modern technologies to improve EVN’s business operations and productivity;

g) Manage investment projects to ensure their progress and effectiveness;

h) Carry out internal inspections and supervision; prevent corruption and waste;

i) Review and formulate plans and take actions against weak and unprofitable projects and enterprises under the management of EVN.

III. IMPLEMENTATION ORGANIZATION

1. The Ministry of Industry and Trade shall provide guidance, supervise and inspect the implementation of this Decision; submit quarterly reports to the Prime Minister; take charge and cooperate with relevant authorities in approving or requesting the competent authority to approve the restructuring plan at the request of EVN and promptly resolving doubts that arise or inform the Prime Minister of the issues that are beyond its power.

2. The Ministry of Finance, Ministry of Planning and Investment, Ministry of Home Affairs, Ministry of Labor, War Invalids and Social Affairs shall, within their power, cooperate with the Ministry of Industry and Trade in performing the tasks specified in Clause 1, Part III of this Article.

3. The EVN’s Board of Members shall:

a) disseminate viewpoints, objectives and contents of the general scheme to restructure affiliates of Vietnam Electricity during 2017 - 2020 to achieve a high level of consensus from EVN to its affiliates, officials and employees during the implementation;

b) approve the scheme to restructure affiliates of EVN during 2017 - 2020 in conformity with contents of the general scheme to restructure affiliates of EVN during 2017 - 2020 and:

- equitize in accordance with regulations and approved roadmap;

- formulate the plan and roadmap for divestment of EVN’s capital in the units specified in Point e, Clause 2, Part II of this Article and submit them to the Ministry of Industry and Trade for approval;

- formulate the plan to restructure power engineering consulting joint stock companies and submit it to the Ministry of Industry and Trade for approval;

- consider formulating a plan for continuing to divest state capital in Power Generation Corporations below the controlling level and be partially divided from EVN when the business results of Power Generation Corporations after 02 years of equitization are available;

- consider developing a training and scientific research model in EVN in an effective and economical manner and submit it to a competent for consideration;

- formulate a scheme to convert the National Load Dispatch Centre into a financially dependent single-member limited liability company in EVN and submit it to the Ministry of Industry and Trade in 2018. The Ministry of Industry and Trade will submit it to the Prime Minister for consideration;

- formulate and approve other schemes and plans to carry out the scheme to restructure affiliates of EVN during 2017 - 2020.

c) direct assurance of progress and quality of its assigned projects and works. EVN shall invest in new power projects assigned by the Prime Minister to satisfy demands for power for socio-economic development.

d) focus on carrying out restructuring in terms of corporate governance as prescribed in Clause 3, Part II of this Article;

dd) submit quarterly reports on implementation of this Scheme to the Ministry of Industry and Trade, the Ministry of Finance and the Steering Committee for Enterprise Innovation and Development.

Article 2.This Decision takes effect on the signing date.

Article 3.Ministers,heads of ministerial agencies, heads of Governmental agencies, People’s Committees of provinces and central-affiliated cities, head of the Steering Committee for Enterprise Innovation and Development and EVN’s Board of Members shall implement this Decision./.

For the Prime Minister

The Deputy Prime Minister

Vuong Dinh Hue