PVN funding questioned

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Many deputies at the 12th National Assembly’s 9th session, which wrapped up last week, frowned on the government’s scheme to use this group’s net profit worth VND3.5 trillion ($175 million) to reinvest in it this year.

Before being tabled at this session, reinvesting was appraised by the National Assembly’s Finance and Budget Committee and on November 15, 2010, the legislative body approved a plan to go ahead with the re-investment.

However, Hanoi deputy Pham Thi Loan underscored the need to reconsider all other investments in this group.

“PetroVietnam is investing into so many sectors like property, which does not belong to its core production and business sectors. How is PetroVietnam investing into the country’s offshore oil and gas exploration and exploitation projects? In fact, many of these projects are implemented by foreign enterprises,” Loan said.

However, according to the National Assembly’s Standing Committee, the re-investment is in line with the national petroleum development strategy from now until 2015 with a vision until 2025, under Decision No.386/QD-TTg dated March 9, 2006. The Standing Committee said PetroVietnam was actively using its resources for energy development under the Investment Law.

It said that a huge volume of investment capital was still needed to complete many substantial petroleum projects under implementation. Thus, without further reinvestment, the oil and gas industry would face difficulties and investment effectiveness would be affected.

However, Phu Tho province’s deputy Le Thi Yen said the government would have to invest a large chunk of state budget cash into PetroVietnam, “but PetroVietnam’s investment effectiveness had never been assessed, while low quality investment has been found massively [in many state-run groups and corporations].”

“I suggest that this problem be re-considered,” Yen said.

Meanwhile, Hung Yen province’s deputy Vu Quang Hai said the re-investment must be in line with the government’s efforts to fight inflation.

“Under Resolution No.11 on major solutions to curb inflation, stabilise the national economy and ensure social welfare, 10 per cent of the government’s public spending must be curtailed. Thus 10 per cent of this sum must be truncated before the sum can be reinvested into PetroVietnam,” Hai said.

Khanh Hoa province’s deputy Nguyen Van Ba referred PVN’s capital usage to that of other state-run groups and corporations.

“You all know, state-run groups and corporations are now being managed weakly. The state does not  know how they are running. Thus, the government needs a law on using state capital and assets for not only PetroVietnam but also all other groups,” he said.