State capital commission to work with struggling mega-projects

324 million-dollar Dinh Vu Polyester Fibre Plant in the northern port city of Hai Phong, one of the 12 struggling mega-projects under the Ministry of Trade and Industry (Source: VNA)

Speaking at the conference, Deputy Prime Minister Truong Hoa Binh voiced concerns over several limitations and obstacles that must be addressed immediately, namely poor coordination between ministries, agencies and project managers, confusion in the understanding of legal documents related to the projects and the dismal financial and operational performance of several projects.

Deputy PM Binh urged the commission to step up effort to exercise the State’s rights as a major shareholder and investor in said projects.

“The commission’s objectives are to work closely with managers to identify the projects’ limitations and shortcomings, to make recommendations and propose solutions to address them,” said Binh.

“This is crucial as the novel coronavirus outbreak is dealing devastating blows to the economy, especially to the country’s railways, airlines and oil sectors," he added.

Binh asked the commission to ensure their reports and recommendations are ready for review during the next Government online conference scheduled to be held at the end of March.

As the State will no longer pump money into the projects, companies said they lacked the finances to dig themselves out. A lack of funding has already hurt their operation and profitability due to increased input costs. Recovering State capital remained a challenging task. Investors from the private sector either showed little or no interest in loss-incurring projects or were unable to buy in due to ongoing legal disputes.

He urged the commission to focus on improving the quality of human resources, saying it’s a key task that must be completed to restructure large State-owned enterprises (SOEs) such as PetroVietnam and Vietnam Railways as well as to improve their productivity, management and financial capacity in the long run.

Another key task for CMSC is to speed up the process for large SOEs including Vietnam Post, VinaChem, VinaComin, VinaFood1, Power Generation Corp 1 and Power Generation Corp 2 to list on the stock market in the near future.

The Deputy PM urged SOEs to make more investments in R&D activities, conduct extensive market researches, streamline and simplify organisation structures to improve business efficiency. He reiterated the key role SOEs must play in Vietnam’s numerous national development programmes.

Binh stressed that Government ministries including the Ministry of Finance, the Ministry of Planning and Investment, and the Ministry of Natural Resources and Environment must ramp up cooperation to review policies and to make necessary amendments to SOEs’ investment activities, real-estate and State-owned properties management to reduce waste for the State’s resources.

According to CMSC, the country’s 19 large SOEs reported a profit of more than VND100 trillion last year and contributed more than VND221 trillion to the State’s budget, a 17.6% increase year-on-year.