SOE restructuring plan in danger of missing deadline

Despite the government's efforts to hasten the restructuring of State-owned enterprises (SOEs), the workload remained huge in the remaining months of this year to fulfil the plan of 2011-2015 period.

Latex is loaded for export in the southern province of Binh Duong. Viet Nam set an ambitious plan to privatise 432 SOEs from 2014-2015, but only 353 are expected to accomplish that goal. (Photo: VNA/VNS)

Deputy Prime Minister Vu Van Ninh yesterday at a conference of the Steering Committee for Enterprise Renewal and Development, said it required determination of all ministries and corporations for it to be accelerated.

The steering committee's report revealed that in the remaining months of the year, privatisation must be implemented in as many as 20 per cent of the number of SOEs and more than 60 per cent of the total capitals to be divested from real estate, insurance, stock, finance and banking sectors set in the plan from 2011 to 2015.

Le Manh Ha, vice chairman of the government office, said that the lack of determination, fluctuations in the international financial and stock markets, coupled with difficulties in the domestic economy, caused stagnation in the restructuring progress of the SOEs.

In addition, complications in verifying corporate values caused bottlenecks and selecting strategic stakeholders took time, Ha said.

The conference also heard that many ministries and provinces had not achieved any results in privatising the SOEs, such as the Ministry of Natural Resources and Environment, and the Ministry of Information and Communications. The provinces included Nam Dinh, Tien Giang, Binh Duong, and Binh Phuoc, apart from Dak Lak and Gia Lai.

Meanwhile, Ha Noi, Hai Phong, Nghe An, and Viet Nam Railways, in addition to the National Coal and Mineral Industries Group, the Ministry of Culture, Sports and Tourism, the Ministry of Transport, and the Ministry of Agriculture and Rural Development set examples with good results.

Privatisation plan

The steering committee said that if efforts were enhanced in all ministries and localities, a total of 210 SOEs could hopefully end up being privatised this year.

With such an estimated result, the total number of SOEs privatised in the 2011-2015 period would be 459, or 90 per cent of the plan.

Viet Nam set an ambitious plan to privatise 432 SOEs in the 2014-2015 period, but the steering committee said that only 353 were expected to be privatised.

To date, a total 471 SOEs were revamped, of which 408 were privatised during the past five years, the report showed.

At the conference, several ministries and localities asked for an extension of their deadline for completion of SOE restructuring to 2016.

At the conference, Ninh said that it would be difficult to complete privatisation of all the SOEs this year. He stressed that the verification of the SOEs' values must be enhanced to the year-end, for the early privatisation in the first quarter of next year.

Regarding the divestment of SOEs, the report showed that a total of VND16.45 trillion (US$734.375 million) was withdrawn from non-core businesses of the SOEs, collecting VND22.87 trillion ($1.021 billion) from 2012 to the end of October.

However, the sum divested from the property, insurance, and stock, in addition to the finance and banking sectors, remained modest at VND8.704 trillion ($388.5 million) or just 37 per cent of the plan.

The report cited statistics of the State Security Commission that 93 initial public offerings were implemented as of October 20, offering more than 836.2 million shares, worth VND8.367 trillion ($373.5 million).

However, merely 38 per cent of the shares offered as IPOs were sold. The disappointing result was attributed to difficulties in the global and home economies which affected local financial and stock markets.

The steering committee said that during the last two months of this year, legal frameworks for restructuring of the SOEs would be completed with the issuance of 12 documents on projects, in an effort to tackle bottlenecks which were blocking their progress.

Localities and SMEs were urged to report their problems to raise solutions, especially those under slow restructuring progress.

To date, another 123 SOEs have been approved to be added to the plan of privatisation during the 2016-2020 period.

Source: VNS

Other news