A PetroVietnam oil rig. PetroVietnam is a giant State-owned enterprise with assets of around 40 billion USD. (Photo: petrovietnam.petrotimes.vn) A representative of a State-owned enterprise (SOE) revealed thatoperationally SOEs do not run autonomously but from instructions fromhigher up.
Such a hands-on way of management has resulted in backlogs and delays,leading to a situation in which his enterprise delivered just 51% of thespending target set in the previous year.
"State-own enterprises can do nothing more than followinstructions," said the representative.
He also complained that the operational plan of his enterprise for 2021-2025had yet to be approved by higher authorities. The delay has greatly hinderedits effort to raise funds for future projects.
Other SOEs share the representative's view that the multi-layered bureaucracyhas been holding back their performance.
When SOEs plan to do something, they must submit it to higherauthorities of many levels for approval. However, the authorities normallysend them a document packed with legal phrases, implying their planhas been disapproved.
Ho Quang Trung, deputy director of the Department of Energy, Commission for theManagement of State Capital at Enterprises (CMSC), admitted that such abureaucratic problem had been around for quite a while.
"It takes only two months for Hoa Phat Group to make an environmentalimpact report, whereas it takes around two years for Vietnam Oil andGas Group (PetroVietnam) to do the same thing," said Trung.
Nguyen Tu Anh, director general of the Department of General Economic Affairs,Central Party's Economic Commission, called for measures to boost SOEs'expenditure on investing activities.
He said SOEs' expenditure on investing activities rose by 13.1% in 2022, higherthan the national average of 11.2% and 8.9% in the private sector. However,SOEs are using on their own capital to finance investing activities.
"State-owned enterprises must leverage other sources of capital toboost their investments further," said Anh.
It is no mean feat for SOEs to increase their financial leverage becausecapital-raising falls outside SOEs' authority. Bank loans are not afeasible option either, as banks are normally discouraged by the cumbersomeloan-making process involving SOEs.
Bond-issuing is another option open to SOEs, but this source of fundshas lessened in recent years. Total government bonds in 2022 stood at just41.1% of those in 2021 and equalled around 24% of the figure in2020.
"If SOEs can pull off more capital from bond-issuing, they would haveenough money to push ahead with their unfinished projects," addedAnh.
In the Government's regular meeting in January, Prime Minister Pham Minh Chinhassigned CMSC the task of streamlining SOEs to improve their performance inline with what was stated in the Economic Restructuring Plan for 2021-2025.
The PM also requested the commission to look into the obstacles holding backSOEs and make a report on the obstacles. The report will be submittedto the Government and be used in a governmental meeting about SOEs./.
VNA
