What causes deadlock in handling of 12 shelved projects of Industry and Trade sector?

	Risk when foreign investors acquire renewable energy projects
	Complete many customs policies and big projects during Covid-19 pandemic
	Regulations revised to accelerate payment of public investment projects

Ninh Binh fertilizer plant is a typical loss-making project, which has had debts restructured. Photo: Nguyen Thanh

Three critical bottlenecks

According to the report from State Capital Investment Corporation at enterprises (SCIC) on the results of dealing with shortcomings and weaknesses of inefficient and delayed projects of the Industry and Trade sector from 2017 to 2019, so far, ministries, agencies and enterprises has completed 75.36% of tasks.

However, it is worth noting that the most critical bottlenecks of the projects and businesses have not been resolved, most of which focus on the remaining tasks with three groups of contents: handling disputes and problems to finalize the Engineering Procurement and Construction (EPC) contract and to finalize the whole project; financial difficulties, debt restructuring, depreciation extension, loan interest rate adjustment; and development of divestment plans.

Currently, out of 12 projects and two profit-making projects (in which one project still has accumulated losses); two projects reduce losses but are not sustainable; one project which stopped operation, has resumed operation and seven projects still suffer losses, are unfinished or stop operation.

Five out of 12 projects face disputes and problems with EPC contracts including: project to contract DAP fertilizer plant No. 2 in Lao Cai, project to expand Ha Bac fertilizer plant, Ninh Binhfertilizer plant project, Dung Quat shipbuilding industry project and project to expand production phase 2 of Thai Nguyen Iron and Steel Joint Stock Company.

The State Capital Management Committee at enterprise stated: Outstanding debts of projects and businesses at credit institutions are remarkable and most of them cannot be repaid on time. Currently, there are 17 commercial banks and one finance company providing credit for the 12 projects with total outstanding debts as of December 31, 2019 of VND20,938 billion. In which, medium- and long-term debts are VND17,169 billion, short-term debts are VND 3,769 billion.

The identification of responsibilities and handling of organizations and individuals committing violations has been conducted. All 12 projects and businesses have been inspected, audited and investigated at different levels to detectviolations and violations of laws of related organizations and individuals.

Handling under market principles

The SCIC emphasized that in the near future, it is necessary to ensure the handling of loss-making projects and businesses according to the market principles and law provisions; and ensure the autonomy and self-responsibility of businesses.

At the same time, to resolutely carry out bankruptcy or dissolution according to the law for projects and businesses that are unable to overcome to recover maximum State capital and assets, minimize the loss of State capital; ensure benefits for workers, social order security and stabilize business environment.

Regarding the specific tasks, the representative of the SCICsaid that the leaders of groups and corporations having projects and businesses in the 12 inefficient and delayed projects must take responsibility and actively solve difficulties and problems of the businesses under their powers.

State management agencies must take charge of providing legal guidance on proposals and solutions to solve problems for the 12 projects, which are not against laws and in accordance with the powers of the Government, the Prime Minister and agencies and businesses; clearly and identifying contents beyond the power of the Prime Minister (if any) and proposing solutions.

By handling of problems regarding disputes of EPC contracts, the SCIC stated: groups and corporations should actively use legal consultancy to re-systemize the entire EPC contracts for each project; carefully review controversial contents and problems; and assess the possibilities (mediation, settlement of petitions or termination of contracts) to choose the optimal solution. The Ministry of Finance and the Ministry of Construction shall guide in detail the liquidation and settlement of EPC contracts for respective contents.

Regulations revised to accelerate payment of public investment projects VCN- The Ministry of Finance recently completed a draft decree on the management, payment and settlement of ...

The Ministry of Finance shall direct and create conditions for the Vietnam Debt Trading Company to participate in the restructuring of projects and businesses according to the provisions of law, minimizing maximum losses to the State.