Steel billet is cooled at Luu Xa Steel Mill, a provider of ingot steel for Thai Nguyen Iron-Cast Steel Plant (Photo: VNA)Hanoi (VNA) - Deputy Prime Minister Vuong Dinh Hue has ordered responsibleministries and enterprises to resolutely handle prolonged loss-making projectsin line with market mechanisms while reaffirming that the State would not pumpmoney into inefficient projects.
The remarks were madeduring a meeting between the Ministry of Industry and Trade (MoIT) and relevantState-owned enterprises on July 5.
Twelve big-ticketprojects under the Ministry of Industry and Trade have recorded totalcumulative losses of over 16 trillion VND (710.4 million USD) by of the end of2016. These projects have total investments of over 63.6 trillion VND, orroughly 2.8 billion USD at the current forex rate, with loans accounting forabout 75 percent of this sum.
In late June, thePoliburo issued conclusion and catalogued measures to deal with theseunprofitable projects.
Deputy PM Hue emphasisedtwo objectives when carrying out measures to tackle these projects under thePolitburo, of which taking prompt action to deal with the problems faced bythese projects while minimising State-owned asset losses; and clarifying theresponsibilities of and strictly handling the organisations and individualsconnected to these losses.
The measures includeselling projects to foreign investors and accepting bankruptcy for heavyloss-making projects.
Under the Politburo’sdirection, the responsible ministries must submit the solutions to thecompetent authorities for approval by the end of this year and put forwardaction next year. Under the plan, these projects will likely be solvedcompletely by 2020.
The Deputy PM’s view isto “resolutely handle loss-making projects in accordance with market mechanismswhile respecting the principle of self-control and self-responsibility ofenterprises”.
Hue also reaffirmed theGovernment’s standpoint that the State will not provide more capital forinefficient projects.
He highly appreciatedefforts made by the Vietnam Steel Corporation and Vietnam National ChemicalGroup in taking measures to restructure the units under their authority.
The Vietnam SteelCorporation has divested the entire 1 trillion VND capital contribution by theState Capital Investment Corporation in Thai Nguyen Cast-Iron and Steel Plant(phase 2) while the Vietnam National Chemical Group tackled problems faced byfour fertiliser plants.
However, Hue criticisedthe Vietnam National Oil and Gas Group (PetroVietnam) for its snail-pacedactions in handling ethanol plants and PVTex Dinh Vu Yarn Plant.
According to MoIT’sdata, four fertiliser manufacturing plants including Ha Bac, Ninh Binh, Dinh VuDPA Plant and Lao Cai DPA Plant have overhauled management and started toreduce production costs and losses.
Meanwhile, three ethanolplants have been still shut down and PetroVietnam is building divestment plansfor two ethanol plants in Phu Tho and Binh Phuoc. The PVTex Dinh Vu Yarn Planthas been ordered to pay 73 billion VND to Dinh Vu Industrial Park forelectricity, water and infrastructure costs which has resulted in difficultiesin restarting the factory or transferring it to other investors.
On a positive note, LaoCai Cast-Iron Steel Plant has agreed to continue adding capital to invest inthe steel rolling line with a capacity of 500,000 tonnes per year. Since March2017, the factory has started to earn a profit which is projected at 67 billionVND in the first half of this year.-VNA
VNA
