A worker at Vietnam-China Steel Mill. (Photo: VNA) Hanoi (VNS/VNA) - Three years after the implementation of agovernment directive aimed at salvaging 12 failed business projectsunder the Ministry of Industry and Trade (MoIT), little progress had beenmade and the majority were still losing money, according to a recentGovernment report submitted to the National Assembly.
The 325-millionUSD Dinh Vu Polyester Plant resumed production in March last year, buthad reported a loss of more than 5 trillion VND (215.5 million USD) by theend of August this year, making it the heaviest loser of allMoIT projects.
Elsewhere,bio-energy plants in Binh Phuoc and Quang Ngai showed losses of nearly 1.4trillion VND (60.3 million USD) and 1 trillion VND (43 million USD), and PhuongNam Pulp Mill’s total liability had reached more than 3 trillion (129.3million USD) by September this year.
DAPFertiliser Hai Phong and Vietnam-China Steel Mill were the only two profitablecompanies on the list. DAP Fertiliser Factory Hai Phong reported a modest 7.2billion VND (310,000 USD) profit after tax and Vietnam-China Steel Mill posted 270billion VND (11.6 million USD), but both looked unlikely to maintain theirmomentum next year.
A fewother projects have been able to reduce their losses. Fertiliser firms Ninh Binh and DAP Fertiliser Laao Cai were able to cut their losses by 417 billion VND(18 million USD) and 208 billion VND (9 million USD), respectively.
Thereport highlighted a number of issues that must be resolved including settlementof legal disputes over EPC contracts (Engineering, Procurement andConstruction), finalisation of projects and recovery of State capital.
Seven outof the 12 projects were dealing with legal battles over EPC contracts. Asattempts to settle disputes had failed, some cases now must go beforeinternational courts.
As theState will no longer pump money into those projects, companies said theywere without the required financial resources to dig themselves out. Lack offunding has already hurt their operation and profitability due to increasedinput costs.
RecoveringState capital remained a challenging task. Investors from the privatesector either showed little or no interest in loss-incurring projects orwere unable to buy in due to ongoing legal disputes.
Thereport recommended companies to conduct a comprehensive review of theiroperations to reduce costs and cut losses. A study of their products andmarkets must also be carried out in order to increase sales. The Governmentmust make greater efforts to encourage private investors to buy in asadditional investment are crucial to bringing these projects out ofthe red./.
The 325-millionUSD Dinh Vu Polyester Plant resumed production in March last year, buthad reported a loss of more than 5 trillion VND (215.5 million USD) by theend of August this year, making it the heaviest loser of allMoIT projects.
Elsewhere,bio-energy plants in Binh Phuoc and Quang Ngai showed losses of nearly 1.4trillion VND (60.3 million USD) and 1 trillion VND (43 million USD), and PhuongNam Pulp Mill’s total liability had reached more than 3 trillion (129.3million USD) by September this year.
DAPFertiliser Hai Phong and Vietnam-China Steel Mill were the only two profitablecompanies on the list. DAP Fertiliser Factory Hai Phong reported a modest 7.2billion VND (310,000 USD) profit after tax and Vietnam-China Steel Mill posted 270billion VND (11.6 million USD), but both looked unlikely to maintain theirmomentum next year.
A fewother projects have been able to reduce their losses. Fertiliser firms Ninh Binh and DAP Fertiliser Laao Cai were able to cut their losses by 417 billion VND(18 million USD) and 208 billion VND (9 million USD), respectively.
Thereport highlighted a number of issues that must be resolved including settlementof legal disputes over EPC contracts (Engineering, Procurement andConstruction), finalisation of projects and recovery of State capital.
Seven outof the 12 projects were dealing with legal battles over EPC contracts. Asattempts to settle disputes had failed, some cases now must go beforeinternational courts.
As theState will no longer pump money into those projects, companies said theywere without the required financial resources to dig themselves out. Lack offunding has already hurt their operation and profitability due to increasedinput costs.
RecoveringState capital remained a challenging task. Investors from the privatesector either showed little or no interest in loss-incurring projects orwere unable to buy in due to ongoing legal disputes.
Thereport recommended companies to conduct a comprehensive review of theiroperations to reduce costs and cut losses. A study of their products andmarkets must also be carried out in order to increase sales. The Governmentmust make greater efforts to encourage private investors to buy in asadditional investment are crucial to bringing these projects out ofthe red./.
VNA
