Only 16 SOEs equitised from 2012 to March 2013

illustration photo source Viettel

The conference was hold held by the MPI, with the collaboration and assistance from World Bank Vietnam to evaluate the execution of Decision 14/2011/QD-TTg of the Prime Minister on criteria for classification of state owned enterprises and the list of state owned enterprises.

According to the report, from 2012 to March 2013, 37 enterprises have been rearranged nationwide, in which, 16 enterprises were equitized, 5 enterprises were merged, 3 enterprises were sold and 3 enterprises were transformed into one-member limited liability companies.

Despite a fact that some agencies have actively handled the rearrangement, there are still no enterprises complete the rearrangement (Ministry of Health, Viettel, Thanh Hoa and Danang, for instance). Some agencies record better performance of SOE rearrangement, such as: Ba Ria Vung Tau (the plan has been completed, however, they just maintain the rearrangement of current enterprises), or Haiphong (59 per cent) but mostly in form of stata capital withdrawal from joint stock companies.

Most of ministries, localities, groups and corporations are carrying out rearrangement and equitization with enterprises which the state does not hold 100 per cent of capital. However, the completion level remain low, said the report.

"General SOEs rearrangement and reform have taken place rather slowly since the overall plan was approved," said a representative of Agency for Enterprise Development under MPI.

According to him, the major reasons are over the last time, conglomeratas, and large corporates have mostly focused on conducting research and making plans on restructure projects to submit for the government approval; some localities have encountered certain delays in submission of overall rearrangement plans, therefore, it is difficult to implement promptly.

Meanwhile, almost all of enterprises fall in the catagory that need to be rearranged in this period are of large scales or in charge of large areas of land, thus, it takes rather a long time to handle financial issues as rearranging or reforming. Additionally, difficulties in economic and securities market conditions have also caused adverse impacts to the speed of SOEs rearragement and reform, he added.

Speaking at the conference, Deputy Minister of Planning and Investment Dang Huy Dong said it is an essential task to restructure SOEs in order to restructure an economy, particularly for countries where SOEs proportionately play a significant role.

"In Vietnam, SOE reforms first began with the elimination of subsidies toward SOEs, then a thorough review in order to be reorganized and streamlined, enterprises entrusted with ownerships and self responsibilities," he said.