Restructuring SOEs to improve asset efficiency

10:47 | 29/06/2017 Society

A workshop on accelerating the restructuring of State-owned enterprises (SOEs) in an effective and practical manner was held by the Central Institute for Economic Management (CIEM) in Hanoi on June 28.

restructuring soes to improve asset efficiency
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The workshop aimed to review the restructuring of SOEs over the past few years, with the focus on the equitisation of enterprises, as well as presenting suggestions for this work in the near future.

CIEM Director Nguyen Dinh Cung said that the restructuring of SOEs is one of the three focuses of economic restructuring, noting that improving the existing asset utilisation will help to boost the economic growth rate.

According to CIEM, eight loss-making SOEs were dissolved in the 2011-2015 period, with just one enterprise being dissolved in 2016, which is a very small number of SOEs compared to the total number of loss-making SOEs needing to be dissolved.

There are many causes for this sluggishness but the main cause is that both creditors and employees do not want to be dissolved, CIEM stated.

Another reason is due to the property losses of SOEs and the difficulties in identifying responsibility for the cause of losses to enterprises.

"No one knows how State capital in SOEs is flowing. There needs to be a collection of reports but it will take a lot of time and it will not produce exact figures. This is the biggest weakness of business governance, which lacks a supervision model, resulting in a lack of warning with regards to risks, "said the CIEM Director.

Moreover, the national debt through SOEs loans has not shown signs of improvement, so many related individuals do not want to change or even delay the restructuring of SOEs.

"We need sustainable growth based on the restructuring of SOEs, not just the exploitation of oil and coal to grow," Cung said.

According to CIEM, the equitisation of SOEs is still slow, with low efficiency.

In 2015, of the 128 enterprises offering IPOs (initial public offerings), only 36% of the shares were sold. After the IPO, the State still holds 81% of the charter capital in the business. In the first five months of 2017, only 15 SOEs were equitised.

Economist Pham Chi Lan said that the capital withdrawn from SOEs requires reasonable investment and it will be useless to continue to invest the capital in other SOEs.

Delegates suggested the Government strengthen the directions and perfect regulations on rights and responsibility of related units in the restructuring process, with the focus on the equitisation of SOEs in order to remedy any shortcomings.

Theo NDO