Ministry of Industry and Trade proposes 5 criteria to take major projects out of loss-making projects

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Dinh Vu Polyester Plant is one of typical projects in 12 loss- making projects, businesses of the Industry and Trade sector. Source: Internet.

Accordingly, in order to take out of the list of 12 projects and businesses those that are behind schedule and ineffective under the Industry and Trade sector, the Ministry of Industry and Trade has proposed 5 list criteria.

Firstly, for investment: The projects have completed settlement procedures, the projects have been completed and shortcomings and disputes with contractors in EPC contract of projects have been completely resolved.

Secondly, for the business and production: The projects have stable and profitable production and business for one year or more, and must have stable and profitable production and business plans in the following years.

Thirdly, for financial situation: The projects no longer have overdue debts in credit institutions in which they had a relationship of lending capital for these projects.

Fourthly, complying with the law on Tax and other budget collection and payment amounts.

Fifthly, completing all tasks of the Industry and Trade sector that are directly assigned to projects, businesses to deploy according to the action plan for implementing the scheme on handling shortcomings and inadequacies of a number of projects and businesses which are behind schedule and ineffective.

For processes and procedures stated in the draft: the Government’s Steering Committee shall issue the Steering Committee’s Decision on criteria, processes and procedures for projects and businesses eligible for removal from the list of projects, businesses that are behind schedule and ineffective in the Industry and Trade sector.

Corporations and groups having projects shall base on these criteria to develop and complete dossiers to submit to the State Capital Management Committee at the businesses to propose to remove their projects and businesses from the list of projects and businesses not meeting the criteria of the Steering Committee.

The State Capital Management Committee at the businesses shall lead and coordinate with ministries and sectors in verifying dossiers of projects and businesses; develop proposals to submit to the Prime Minister, Head of the Government’s Steering Committee - Deputy Prime Minister Vuong Dinh Hue for removing the businesses and projects from the list.

According to the Ministry of Industry and Trade, after nearly 2 years of implementation of the National Assembly’s Resolution and over 1 year of implementation of the scheme on handling projects under Prime Minister's Decision on approval, 12 projects and businesses have positively changed. Specifically, among 6 plants that were loss-making, 2 plants have profitable production and business, including DAP Fertilizer Plant No 1 in Hai Phong and Vietnam-China Steel Plant. The 4 remaining plants have gradually overcome difficulties, such as Ha Bac Fertilizer Plant, DAP Fertilizer Plant No. 2 in Lao Cai have reduced losses.

Among the 3 projects that suspended production and business, 2 projects resumed operations. Dinh Vu Fiber Polyester Plant have resumed operation of 3 production lines at their Filament Factory since 20th April 2018, and increased to 6 lines since 1st November 2018; Quang Ngai Biofuel Plant Project resumed operation since 14th October, 2018.

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For 3 unfinished construction projects, in addition to Phuong Nam Pulp Mill Project which is implementing the project of auctioning all assets and inventoried goods, Phu Tho Biofuel Plant is facing difficulties due to PetroVietnam Oil Corporation, which is not principal shareholder (accounting for 39.76%), and other shareholders (accounting for 60.24%), have not contributed additional capital to continue deploying the project. The project for expanding production in phase 2 of Thai Nguyen Iron and Steel Plant has not yet resolved disputes in EPC contract with General contractor, which is the Metallurgical Corporation of China (MCC) and subcontractors.

Ministry of Industry and Trade affirmed that the handling of projects has ensured compliance with the principles of the market mechanism, autonomy and self-responsibility of businesses. The State will not grant additional capital to projects.