(Bloomberg) — Vietnam is preparing to expand its investigation into alleged corruption among energy sector officials as the Southeast Asian country seeks to regain control of a worsening power crisis, according to officials familiar with the matter.Thank you for reading this post, don't forget to subscribe!
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The investigation that has implicated senior business executives in recent weeks on allegations of bribery, poor oversight and other abuses of power is set to be expanded to include the alleged misuse of the country’s nearly $300 million petroleum price stabilization fund, according to two people familiar with the matter. Is. Situation.
If expanded, the investigation would include other officials from the finance and trade ministries and some related companies. The two people, who spoke on condition of anonymity because the case is not public, said it was likely to lead to additional arrests.
Vietnam’s years-long anti-corruption campaign shows no signs of slowing down as Communist Party chief Nguyen Phu Trong vows to clean up the more than $400 billion economy and tighten his party’s grip on the country of 100 million people. Trying to. Also at stake is Vietnam’s growing appeal — as a destination for foreign investment, including as a supplier to companies like Apple Inc. — amid supply chain changes and U.S.-China tensions.
Authorities last week said they detained Hoang Quoc Vuong, a former deputy trade minister and former chairman of Vietnam Oil & Gas Group, also known as PetroVietnam, and found lack of oversight and violations by petroleum traders. Criticized the ministry for failing to impose.
PetroVietnam representatives did not respond to multiple calls seeking comment. Vuong could not be reached for comment.
This week, plans were revealed to prosecute a prominent Vietnamese businesswoman and 85 others in a $12.5 billion embezzlement case that has become the centerpiece of the state crackdown. But the broader effort also signals a growing awareness among top officials of the bleak energy picture, which threatens to leave Vietnam’s vital industrial base without adequate power.
The global energy crisis triggered by Russia’s 2022 invasion of Ukraine created fuel shortages in many emerging economies. Vietnam is suffering from a 23-day energy shortage, which led to blackouts last year due to a shortage in coal supplies. The extreme temperatures also depleted water reserves at hydropower plants and increased demand for electricity.
That shortage affected important industrial parks in the northern provinces of the country. Vietnam Electricity Group said ensuring adequate electricity supply into 2024 will remain a challenge given the continued imbalance in supply and demand, as well as the risks in getting fuel to power plants.
Meanwhile, Vietnam’s fuel costs are poised to rise as it shifts its grid to expensive – and sometimes unreliable – liquefied natural gas. The country began importing the super-chilled fuel last year and aims to make LNG about 15% of its power mix by 2030, according to energy plans.
The country’s troubled energy market highlights the difficulties Vietnam needs to overcome to cement its role as a reliable base for global manufacturers.
Vietnam’s government inspectorate said in late December that the Trade Ministry had approved more solar projects than planned in the country’s recent power development plan, underscoring how projects with no legal basis are being implemented in more than a dozen provinces. is being approved.
According to officials, 168 solar projects with a total capacity of 14,707 MW were given the green signal between 2016 and 2020. According to the government website, this is about 17 times more than the total solar capacity approved in the National Electricity Plan. ,
The latest development will expand scrutiny of Vietnam’s Petroleum Price Stabilization Fund. The account, which the Finance Ministry said had 7.06 trillion dong ($288 million) as of September 30, is to be used by the government to protect the economy against inflationary pressures by stabilizing domestic gas market price fluctuations. Is one of the devices.
Authorities previously uncovered violations in the fund covering the period from January 2017 to April 2018, while VnExpress reported that some gas stations closed due to fuel shortages in 2022.
But in Vietnam’s rigid political system, where major decisions require review by the Politburo and a central executive committee, comprehensive anti-corruption investigations are critical to ensuring electricity supplies meet the country’s growing demands and ambitious green energy goals. It may also hamper necessary decision making.
“If project delays continue for large-scale power projects, primarily fossil fuel power plants, there is a risk of blackouts again,” said David Thu, power and renewables analyst at BMI Research.
–Philip J. With assistance from the Hagemans and Nguyen Xuan Quynh.
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