SOE restructuring pace to go full throttle in 2018
Updated at Saturday, 17 Mar 2018, 22:44
The Hanoitimes - Deputy PM Vuong Dinh Hue on March 17 requested the Steering Committee for Enterprise Innovation and Development to finalize legal frameworks to continue the restructuring process of state-owned enterprises (SOEs).
Hue urged SOEs to improve efficiency through regorganizing, equitization and divestment, while government agencies continue its support for small and medium enterprises (SMEs).
Relevant ministries and agencies will proceed with equitization and divestment plan as scheduled, concurrently, to ensure maximizing state budget revenue. The Deputy PM stressed SOEs, of which equitization plans have been approved, to soon carry out the initial public offering (IPO).
In 2018, the Steering Committee will step up efforts in supervising and instructing relevant ministries, provinces, and corporations to complete the structuring proposals of SOEs.
SOEs, as requested by the Deputy PM, continue to improve efficiency in organization and operation in conformity with international practice of corporate governance, with a view to ensure transparent financial management and sustainable development.
SOEs sustaining losses and inefficient investment projects will be dealt with in accordance with the market mechanism, with concerned groups and individuals to be held accountable.
Under Hue’s instruction, it is essential to continue the process of administrative reform, improve business and legal environments, and in turn create favorable conditions to facilitate the establishment of new enterprises.
By 2020, the country has set the target of having 1 million operational enterprises.
Previously, management of the State`s capital in 21 large State-owned enterprises (SOEs) had been proposed to be transferred to the State Capital Management Committee dubbed as the "Super Committee."
It is estimated that the State capital in these 21 SOEs is equal to 50% of the total value of state capital in all SOEs. At the top of the list is State Capital Investment Corporation (SCIC), which will no longer operate under the administration of the Ministry of Finance (MoF).
The remaining 20 SOEs are companies under the ownership of the Ministry of Industry and Trade (MoIT), Ministry of Agriculture and Rural Development (MARD), Ministry of Information and Communications (MIC), and Ministry of Transport (MoT). Most of the names on the list are enterprises belonging to MoIT and MoT, comprised of six groups and six general corporations. Fifteen names on the list are enterprises where the state still holds a 100% stake.
Total revenue from the equitization process and divestment in 2017 is estimated at VND144.6 trillion (US$6.3 billion), 2.4 times higher than the original target of VND60 trillion (US$2.6 billion) set by the National Assembly, the MoIT said. Specifically, revenue from equitization process and divestment reached VND5.2 trillion (US$229 million) and VND139.4 trillion (US$6.1 billion), respectively.
The number of SOEs has been reduced 24 times compared to 20 years ago, from 12,000 enterprises in 1986 to 500 in 2017, holding 11 key sectors and providing essential public services and social and security needs. The number is expected to decrease to 150, mainly lottery companies, public services, and 3 leading SOEs: Electricity Vietnam (EVN), PetroVietnam (PVN) and Viettel.