Minister of Finance: Accelerating equitisation needs the participation of the whole system

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Minister Dinh Tien Dung stated that the equitisation progress is very slow

There is still 71 percent of the restructuring plan

The Ministry of Finance’s report shows that as of September 30, 148 SOEs have been approved by the competent authorities for the restructuring plan under Decision No. 707 / QD-TTg. 378 SOEs have not been approved for the restructuring plan (accounting for 71 percent).

The significant number of SOEs which have not been approved for the restructuring plan is because many ministries, sectors and localities have not grasped the guiding spirit of the Prime Minister. A number of economic groups, corporations and SOEs have submitted their owners restructuring plans which are considered, approved or submitted to competent authorities for approval.

According to the equitisation plan approved by the Prime Minister, there will be 128 enterprises subject to equitisation in the period 2017-2020.

From 2016 to September 2019, 168 enterprises were approved for equitisation plans with a total value of VND443,056 billion, of which the value of state capital was VND206,694 billion. However, among 168 equitized enterprises, only 36 of 128 equitised enterprises were on the list of equitised plans proposed by the Prime Minister (reaching 28 percent). According to this plan, by the end of 2020, there will be 92 enterprises subject to equitisation.

The equitisation progress under the direction of the Prime Minister is very slow. The units that still have many enterprises on the list to be equitized by 2020 are: Hanoi with 13 enterprises (four corporations), accounting for 14 percent of the plan; Ho Chi Minh City with 38 enterprises (11 corporations), accounting for 40 percent of the plan; the Committee for State Capital Management at Enterprises with six enterprises (three groups and three corporations); the Ministry of Industry and Trade with four enterprises (three corporations); and the Ministry of Construction with two corporations.

Regarding the divestment plan, according to Decision No. 1232 / QD-TTg of the Prime Minister, in the period of 2017-2020, about VND60,000 billion of state capital will be divested at enterprises.

From 2016 to September 2019, the whole country divested VND24,510 billion, earning VND170,629 billion, of which the majority was divested in state corporations and groups.

Units which have many enterprises subject to divestment with a great value are: the Ministry of Industry and Trade (divestment at Viet Nam Engine And Agricultural Machinery Corporation, Vietnam Oil and Gas Group), the Ministry of Transport (divestment of 30.4 percent of state capital at Vietnam Airport Corporation - Joint Stock Company and 35.16% of state capital invested in Vietnam Aviation Corporation - Joint Stock Company ), the Ministry of Construction (divestment at 8 of 11 Joint Stock Corporations); and Hanoi city (divestment at 31 of 34 enterprises).

According to the Ministry of Finance, the efficiency of production and business activities of state enterprises is increasing, higher than the national average. State enterprises play an important role in socio-economic development, creating a large source of revenue for the state budget and have directly held the majority or dominated a number of important sectors and areas of the economy.

Along with performing production and business tasks, groups and corporations shall carry out restructuring plans approved by competent authorities. According to the report, the results of the transfer of capital invested in foreign countries by the SOEs are profitable, increasing the efficiency of production and business activities.

Strictly handling personal responsibility

Speaking at the Conference on innovating and improving the operational efficiency of state-owned enterprises held on the morning of October 16, Minister of Finance Dinh Tien Dung pointed out many issues. The first issue is some ministries, sectors and localities have not completed their equitisation and divestment plans in 2018 in accordance with the Prime Minister's approval, and must adjust the implementation plan to suit reality.

The progress of approving projects on SOE restructuring under the competence of ministries, sectors and localities is still slow; the implementation of the project on restructuring State economic groups and corporations, approved by the Prime Minister, has been slow, especially divestment and equitisation.

Some ministries, sectors, localities and enterprises encounter obstacles and confusion and inconsistencies in the process of equitisation and divestment according to new regulations; there are still State enterprises making losses, incommensurate with their capacity.

The delayed settlement and transfer into joint stock companies of equitised enterprises is also a reason affecting the determination of state capital, collection and remittance of revenues from equitisation.

According to Minister Dinh Tien Dung, from now to 2020, the Ministry of Finance has requested ministries, sectors, localities, economic groups, corporations and State enterprises to urgently build and submit SOE restructuring plans for approval in accordance with regulations in Decision No. 707/QD-TTg; review and strictly handle responsibilities of individuals and organizations related to the late approval of these plans.

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The Ministry of Finance has requested the Ministry of Planning and Investment to urgently formulate and submit to the Government for promulgation a decree on the operation of SOEs; review and formulate criteria for SOE classification after 2020 to submit to the Prime Minister for promulgation; set up a set of criteria to evaluate the efficiency of production and business activities of SOEs according to each type, field and geographical areas.

"To boost equitisation and divestment of SOEs, it need the participation and close coordination of ministries, sectors and localities over the country," said the Minister.