State budget not to be used to rescue SOEs and inefficient projects

January 06, 2017 | 11:17

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State-owned enterprises (SOEs) will have to use their own resources to resolve their inefficient projects.

Prime Minister Nguyen Xuan Phuc made the statement as part of his conclusion at the regular government meeting on inefficiencies at some projects and companies under the management of the Ministry of Industry and Trade.

The conclusion stated that besides fluctuations in the global economy, there are inherent weaknesses in the management of state-owned companies that have been incurring huge losses recently. In addition, the Prime Minister pointed out that these companies are expected to continue incurring losses in the near future unless actions are taken.

He asked the companies to restructure themselves by addressing their weaknesses. The restructuring of inefficient companies and projects should follow market mechanisms, minimise the loss of state assets, and should not cause a domino effect rippling over to other companies.

The government is adamant about not using the state budget to rescue inefficient projects. “SOEs have to stop making direct investment in these projects, use their own resources and be responsible for the projects,” the conclusion stated.

The Prime Minister assigned the MoIT to work with related government agencies to review the projects and submit plans on what to do with them as soon as possible.