Condition of state-owned enterprises not much worrying

Although 30 out of 85 state-owned enterprises (SOEs) and corporations have seen debt-to-equity ratio jumping above 3xs, the matter is not much worrying, minister of Planning and Investment Bui Quang Vinh was quoted as saying at the programme “People Ask – minister Answer” administered by the government Web Portal yesterday.

The total debts of such enterprises are estimated at 1,008,000 billion dong compared to its equity of 790 trillion dong, making debt-to-equity ratio at 1.36xs which is below half the stipulated level of 3xs.

Vietnam Electricity Group (EVN), for instance, has taken out excessive loans for construction and development of power plants and projects that would fund debt repayment on their operation. “What matters is loans could be settled, so SOEs should not be considered economic burdens”, he emphasized.

According to the report of Ministry of Finance, some 20pct of SOEs posted losses and reached break-even point whereas the remaining 80 percent enjoyed profitability in 2010.

However, the deployment of state resources and technical infrastructure has proven, to some extent, inefficient. Notably, losses and waste have recently been found at several state-run corporations such as Vinashin and Vinalines. Apart from responsibilities of management agencies such as ministries and branches, direct managers who are assigned to run the enterprises on behalf of the government would be to blame for such consequences.

Therefore, it is important that austerity regulations should be executed so as to enhance information transparency and compulsory annual auditing, he suggested. Currently, Ministry of Planning and Investment in collaboration with other ministries and branches is working on revision of Decision 132/2005/ND-CP that is anticipated to be proposed to the government this July in an attempt to further clarify rights and obligations of state capital owners.

 

Category: Business