PM: State-owned firms’ reshuffle is major task of 2017

Hanoi (VNA) – The reshuffle and reform of State-owned enterprises (SOEs) must be considered the most important task of 2017, underscored Prime Minister Nguyen Xuan Phuc at a national conference on SOEs rearrangement and reform on December 6.

The PM noted that 350 firms equitised in 2015 have operated effectively with their pre-tax profit rising 49 percent, budget payment increasing 72 percent and employees’ income up 33 percent.

He stressed the need to make proper roadmap and methods for the equitisasion of SOEs for better business management as well as healthier, more transparent and equal business environment, creating favourable conditions for the growth of private businesses. Effective equitisasion also help reduce corruption, he said.

PM Phuc pointed to group interest as the largest obstacle hindering the progress of the equitisasion process.

Regarding orientations for 2017, the PM said that it is crucial to define sectors in which the State needs to keep control and sectors eligible for equitisasion. He affirmed that the State should play a core role in public services and a number of areas of State’s responsibility, while withdrawing entirely or partly from the remaining fields.

The most important objective of the reshuffle and equitisasion of State-owned firms is to ensure the highest interest of the State, he underscored, adding that it is necessary to invite prestigious international advisors to join the process in order to achieve this goal.

He also urged enterprises to hire experts for the evaluation of their value, debt settlement and share selling, thus ensuring State interest.

According to the report of the Steering Committee for Business Renovation and Development, the number of State-owned enterprises (SOEs) has reduced remarkably over the past 15 years, from 6,000 to 718 as of October this year.

From 2011 to 2015, 591 SOEs have been equitised, or 96 percent of the target. Most of the equitised establishments thrive. The total State-owned capital in those enterprises rose from 810 trillion VND before equitisation to 1,234 trillion VND.

However, the rearrangement and restructuring of SOEs is slower than expectation, and SOEs’ performance has not matched the resources that they hold.

Tran Quang Nghi, Chairman of the Management Board of the Vietnam National Textile and Garment (Vinatex) admitted that the delay in SOEs equitisation is attributable to a lack of resolve on the part of the enterprises themselves.

Participants shared the view that it is necessary to speed up equitisation among the parent groups to step up the process at affiliated companies.

The conference was held to review the equitisation, restructuring and reform of State-owned enterprises from 2011-2015 and seek measures to promote the process in the next five years./.