State Grid makes huge loss
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The State Grid Corporation of China (SGCC) posted a net loss of 2.34 billion yuan (US$344 million) in 2009, according to a report from the State-owned Assets Supervision and Administration Commission (SASAC). SGCC is the third-highest loss-maker after Aluminum Corporation of China and China Unicom, among eight major central enterprises facing huge losses, according to SASAC figures.
An insider at the State Grid told China Business News that the loss was due to two government hikes in the on-grid price paid to generators. The company's advanced desulfurization allowance also contributed to the deficit.
The National Development and Reform Committee raised on-grid prices on July 1 and August 20 2008. On average, on-grid prices were raised 4.14 cent per kilowatt-hour and average transmission and distribution prices by 0.36 cent per kilowatt-hour. But the retail price of electricity was raised by only 2.61 cent per kilowatt-hour, putting grid companies under pressure.
Consecutive losses have had a negative impact on wages at the State Grid. Staff told China Business News that their incomes had dropped consistently over the past few years, especially since this March.
China's business press carried the story above on Tuesday. China.org.cn has not checked the stories and does not vouch for their accuracy.
