SOE restructuring in a new period: Loss-making enterprises should made bankrupt

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Many goals and tasks for SOE restructuring are set for the new period. Photo: Internet.

SOEs are restructured in a more efficient manner

Achievements in SOE restructuring for 2016-2020 are notedin the draft project on SOE restructuring, especially, for State corporations for 2021-2025 by the Ministry of Finance. The system of legal mechanisms and policies for SOE restructuring for 2016-2020 have been fully issued, ensuring further transparency and maximising benefits of the State, and removing difficulties and problems to speed up the equitisation, divestment and limit the loss of capital and State assets during the equitisation, divestment, and restructuring of SOEs and State-invested enterprises (SIEs) over the past five years.

Regarding equitisation and divestment, relevant agencies have reviewed, built and sentto authorities to issue a roadmap for equitisation and divestment. The list of enterprises subject to equitisation and divestment for 2016-2020 announced by the Prime Minister is a great step for transparency in SOE reorganisation and renewal and at same time serving as a basis toreview and handlethe responsibility of the head in implementing the SOE restructuring project.

Regarding restructuring and improvement of the operational efficiency of SOEs, SOEs have gradually restructured in a more efficient manner and performed their role as an important force of the country’s economy. The efficiency of business production of SOEs is improved under the restructuring plan. Many enterprises such as Viettel, Sai GonNew Port Corporation have made high-value products and built reputable trademark, having great influence in the region and internationally like telecommunications services, transportation services, seaports, and flight services.

In addition to these achievements, the Ministry of Finance also pointed out the limitations of SOE restructuring recently. Accordingly, the research, development, promulgation, amendment and supplementation of legal documents still have many different views among related agencies and units, leading to prolonging the time and reducing efficiency; difficulties and problems in the process of equitisation and divestment have not yet been removed; strict sanctions against the heads of agencies, units, and SOEs who have not completed the equitisation, divestment, and SOE restructuring according to the plan.

Regarding dealing with loss-making and ineffective projects, although ministries, sectors and enterprises have completed 75.36% of plan for 2017-2019 andthe most important problems of projects and enterprises have not been handled, mainly in three problem groups: resolving disputes and problems to finalise EPC contracts, settlement of whole projects; financial difficulties, debt restructuring, amortisation extension, interest rate adjustment; building divestment plans.

Ineffective and irrecoverable projects should be made bankrupt

The goals and tasks in SOE restructuring for 2021-2025 continue to be set out. The system of mechanisms and policies for SOE restructuring for 2021-2025 should be completed, focusing on perfecting the legal basis to handle loss-making and ineffective projects. The list of criteria for SOE equitisation and divestment should be built to create initiative and attach responsibility to the owner's representative agency to decide the progress of equitisation and divestment in firms. Loss-making and ineffective projects for 2011-2020 will be handled. Building effective plans and roadmaps to identify the responsibilities of heads for handling this issue; prevent the delay and prolonging, causing a loss of State assets, and prevent negative problems and corruption. The handling will comply with market principles instead of State intervention. If projects cannot be recovered, they should be made bankrupt.

The SOE restructuring under the form of SOE equitisation and divestment continues to be basically completed by 2025, ensuring publicity, transparency and reaching the highest efficiency for the State. Some SOEs with 100% charter capital owned by the State should be turned into joint stock companies.

Regarding solutions for SOE restructuring in the next period, it is necessary to carefully review enterprises in need of equitisation to give priority, Assoc.Prof.Dr. DinhTrongThinh (Academy of Finance) said: “In particular, the equitisation must attach the responsibility of the heads of the enterprises and the localities. In fact, the heads of the enterprises are not interested in equitisation. Therefore, the heads of enterprises and localities related to the SOE equitisation should be encouraged. At the same time, the equitisation and the price assessment should be performed better and listing on the stock market should be promoted. The mechanism to ensure unified direction of the State to enterprises should be issued, but enterprises must be accounted for and do business according to the market mechanism.”

For ineffective businesses and projects, he also agreed with solutions for handling these projects and that loss-making enterprises should be made bankrupt.