Laws of Vietnam

THE PRIME MINISTER

DECIDES:

Article 1.- To ratify the planning on Vietnam electricity development in the 2001-2010 period, with the prospect toward 2020 taken into account (called Electricity Planning V for short) with the following major contents:

1. On the demand for load:

To firmly develop, raise the quality of, and fully satisfy the demand for, load in service of people’s daily life as well as socio-economic development, security and defense; to meet the requirements of national industrialization and modernization. The power plants throughout the country are expected to produce between 45 and 50 billion kWh, by the end of 2005, 70 -80 billion kWh by 2010 and 160-200 billion kWh by 2020.

2. On the development of power sources:

a/ The development of power sources must satisfy the above-said load demand, ensuring the safe, qualitative, stable, efficient and rational supply of electricity for socio-economic development. To fully exploit energy sources with economic efficiency such as hydroelectric power, gas-fired thermal power, coal-fired thermal power and oil-fired thermal power, as well as new forms of energy..., in combination with the step-by-step reasonable exchange of electricity with regional countries. To give priority to the building of hydroelectric power plants with integrated benefits such as flood fighting, water supply, electricity production. To develop small-sized hydroelectric power plants, wind power, solar power...in areas far from power grids as well as mountain, border and island regions.

b/ The balance of power sources must take into account projects on the construction with intensive investment and technological renovation of the currently operating plants; meet the environmental standards and use modern technologies for the new power plants.

- To combine power sources invested in forms of independent power plants (IPP), BOT power plants or joint ventures and exchange electricity with the neighboring countries... in order to supply electricity for each region and the whole electric system.

- To ensure that the total capacity of foreign-invested projects in forms of BOT, IPP or joint ventures... account for not more than 20% of the system’s maximum capacity.

c/ Power sources must be structured in compatibility with the practical situation and fuel sources, ensuring the system’s exploitation efficacy and characteristics of each locality so as to take initiative in the supply of electricity based on the requirements of socio-economic development and people’s daily life in the dry and rainy seasons, including the years when hydroelectric power plants fall short of water as well as the high-demand and low-demand hours, thereby ensuring enough water sources for agriculture and flood fighting when necessary.

d/ To boost the power source projects according to the set plan and schedule (see the list in Appendix 1 to this Decision).

The capacity, location and time for the construction of power source projects shall be decided by the competent authorities when approving the feasibility study report of each specific project.

3. On the development of power grids:

a/ To build power grids of from high tension to low tension synchronously with power sources. To overcome the current state of unsafe, obsolete, patchy and high-loss power grids.

b/ The competence to decide investment in power grid development projects is prescribed as follows:

- The competence to decide investment in power transmission lines and transformer stations shall comply with the general provisions of the Regulation on Investment and Construction Management (the Government’s Decree No.52/1999/ND-CP of July 8, 1999 and Decree No.12/2000/ND-CP of May 5, 2000). For projects with investment decided by branches and localities, the electricity branch’s agreement is required.

- Projects on transformer stations and power transmission lines of 110 kV or under shall be decided by the Managing Board of the Vietnam Electricity Corporation in accordance with this Decision.

- For power grid development projects for the years after 2010, the Ministry of Industry shall coordinate with branches and localities in directing Vietnam Electricity Corporation to specify them according to the planning and plans before submitting them to the Prime Minister for consideration and decision.

c/ The power grid development projects shall comply with the list in Appendix 2 to this Decision.

4. On the supply of electricity for rural and mountainous areas:

a/ The Ministry of Industry shall coordinate with the concerned branches and localities in directing Vietnam Electricity Corporation to continue implementing the Prime Minister’s Decision No.22/1999/QD-TTg of February 13, 1999 ratifying the project on rural electricity and Decision No.294/QD-TTg of April 7, 2000 ratifying investment in the project on rural energy according to the set plan and schedule.

b/ The Ministry of Industry shall coordinate with branches and localities in elaborating a plan on the supply of electricity for deep-lying, remote, border and island areas, proposing mechanisms and policies for effective implementation, and submit it to the Prime Minister for consideration and decision. The plan must classify areas to be supplied with electricity from the national electricity system and areas to be supplied with on-the-spot electricity from diesel, wind or solar power source, from small-sized hydroelectric power plants or geothermal sources... For the areas to be supplied with electricity from the national electricity system, where, however, the on-spot power sources can be developed efficiently, such sources should be considered for development.

5. On investment capital sources:

a/ The Vietnam Electricity Corporation shall play a key role in supplying electricity for socio-economic development and people’s daily life. It may mobilize all capital sources for investment in power source and grid projects according to mechanism of self-borrowing and self-repaying (borrowing ODA capital, credit capital inside and outside the country, borrowing export credit from equipment suppliers and capital for equipment procurement to be repaid with commodities...) and continue observing the mechanism whereby the central bodies, localities, State and people jointly develop rural power grids.

b/ To encourage domestic and foreign investors to take part in building power source and power distribution projects in the investment forms of independent power plants (IPP), build-operate-transfer (BOT) contracts, build-transfer (BT) contracts, build-transfer-operate (BTO) contracts, joint ventures or joint stock companies...

6. On financial mechanism:

a/ To allow the Vietnam Electricity Corporation to retain the annual capital use levy, which constitutes a source of State budget capital allocated for investment in building power projects.

b/ To carry out plan on the rational adjustment of electricity prices from now to 2005.

7. On the renovation of managerial organization and raising of the electricity branch’s operation efficiency:

a/ The Vietnam Electricity Corporation shall continue restructuring its organization, reforming administrative procedures and dividing responsibility for investment decision with a view to raising the production and business efficiency to meet the requirements of electricity development in the coming period.

b/ The Vietnam Electricity Corporation shall invest in boosting the domestic manufacture of electric equipment, first of all focusing on the manufacture of complete equipment for medium- and low-voltage grids, then proceeding to manufacture complete equipment for 110-220 kV grids, gradually reducing the volume of equipment imported from overseas.

c/ The Ministry of Industry, branches and localities shall enhance the State management and draw up specific regulations according to their respective competence so that different economic sectors may take part in electricity investment and business to meet the country’s increasing demand.

Article 2.- Tasks of the concerned ministries, branches and localities and The Vietnam Electricity Corporation:

1. The Ministry of Planning and Investment:

To coordinate with the concerned ministries, branches and localities in studying and submitting to the Prime Minister for consideration and decision:

- The national strategy and policy on energy.

- The planning on the rational exploitation and combined use of the country’s rivers and other energy sources.

2. The Ministry of Industry:

a/ To direct the electricity branch to implement Electricity Planning V according to the set plan and schedule. To direct the Vietnam Electricity Corporation to work out a plan on organizational restructure in line with the branch development planning in the next 10 years before submitting it to the Prime Minister for approval.

b/ To regularly evaluate and update the demand for load and fuel for electricity production so as to work out a program on rational development of power sources and grids to meet the whole country’s demand after 2005. In case of big changes in the demand for load and capability of supplying fuel sources for electricity production, the Ministry should take initiative in calculating and promptly adjusting Electricity Planning V and submit it to the Prime Minister for approval.

c/ To assume the prime responsibility and coordinate with the concerned ministries and branches in promptly promulgating legal documents related to the electricity branch’s activities; finalizing the Bill on Electricity so as to report it to the Government for submission to the National Assembly for promulgation according to the set plan.

d/ To assume the prime responsibility and coordinate with the Ministry of Science, Technology and Environment, the Ministry of Construction and the Ministry of Planning and Investment in further materializing the program on the electricity "demand-supply management" (DSM), which puts forth incentive policies in combination with propagation, education, inspection and supervision... for the effective implementation of the DSM program.

e/ To assume the prime responsibility and coordinate with the Ministry of Science, Technology and Environment and concerned agencies in finalizing the pre-feasibility study report for the nuclear power plant project, and submit it to the Prime Minister for consideration and approval.

f/ To assume the prime responsibility and coordinate with the ministries and branches in directing the exchange of electricity with neighboring countries and Vietnam’s participation in the electricity system linking countries in Mekong river basin.

g/ To assume the prime responsibility and coordinate with the concerned ministries and branches in organizing the study and perfection of the method of elaborating electricity planning for the following period along the direction of optimizing technologies and renovating the long-term plan elaboration work in service of the adjustment and elaboration of the electricity branch development planning in the coming period.

h/ To direct the Vietnam Electricity Corporation to work out the hydroelectric cascade planning; guide economic sectors to take part in the investment and business of small and medium hydroelectric power projects. Cases falling beyond its competence shall be reported to the Prime Minister for consideration and decision.

i/ To assume the prime responsibility and coordinate with the concerned ministries, branches and localities in directing the exchange of electricity with neighboring countries and Vietnam’s participation in the electricity system linking countries in the Mekong river basin.

3. The Vietnam Electricity Corporation:

a/ To take the prime responsibility for ensuring the stable, safe and sustainable supply of electricity for socio-economic development and people’s daily life.

b/ To implement solutions to reduce electricity loss to around 10% by 2010; raise the capacity and increase the number of operation hours of power plants; control the load so as to raise the business efficiency; realize the program on saving electricity in production and consumption, saving investment capital right in the Corporation and the entire society for the sustainable development of the electricity branch.

Article 3.- The Minister of Industry, the heads of the concerned ministries and branches and the presidents of the People’s Committees of the provinces and centrally-run cities, the Managing Board and the general director of Vietnam Electricity Corporation shall have to implement this Decision.

Prime Minister
PHAN VAN KHAI

APPENDIX I

PROGRAM ON POWER SOURCE DEVELOPMENT IN THE 2001-2010 PERIOD, WITH THE PROSPECT TOWARD 2020 TAKEN INTO ACCOUNT

I. POWER SOURCES EXPECTED TO OPERATE IN THE 2001-2005 PERIOD

Note: * Where the negotiation on Phu My 2-2 contract fails, the Vietnam Electricity Corporation shall look for capital sources to build the plant.

II. POWER SOURCES EXPECTED TO OPERATE IN THE 2006-2010 PERIOD

c/ Electricity exchange with Laos and Cambodia:

The capacity and time of exchange shall depend on the negotiation process.

d/ Geothermal and wind power: The study of these forms of energy shall depend on the potentials of localities.

III. ORIENTATIONS FOR POWER SOURCES TO OPERATE IN THE 2011-2020 PERIOD

a/ On hydroelectricity:

- To supplement the planning on hydroelectric power system on the main rivers, to proceed with the elaboration of pre-feasibility and feasibility study reports for projects with high efficiency so as to submit them for ratification according to current regulations.

- To actively make all-round preparations for the building of Son La hydroelectric power plant according to the prescribed contents; the construction scope and time shall be decided by the Prime Minister upon approval of the project’s feasibility study report.

- To study a number of hydroelectric power storage projects for future use.

b/ On thermoelectric power sources:

To prepare investment in projects based on the capacity of fuel sources (gas, coal, oil...) so as to define locations in Cuu Long river delta, northern provinces and coastal region for submission and approval.

c/ On nuclear power:

The Ministry of Industry shall assume the prime responsibility and coordinate with the Ministry of Science, Technology and Environment in finalizing an overall report on the development of nuclear power in Vietnam, to be submitted to the Prime Minister for consideration in 2001-2002.

APPENDIX II

PROGRAM ON POWER GRID DEVELOPMENT IN THE 2001-2010 PERIOD, WITH THE PROSPECT TOWARD 2020 TAKEN INTO ACCOUNT

I.1. 500 KV POWER LINES

I.2. 500 KV TRANSFORMER STATIONS

II. PROJECTS ON 220 KV POWER GRIDS

II. 1. 220 KV TRANSFORMER STATIONS

II.2. 220 KV POWER LINES