Vietnamese state-owned enterprises (SOEs) have to date incurred a total debt of VND1,008 trillion (USD47.6 billion) compared to their combined equity of VND790 trillion (USD37.6 billion).
Minister of Planning and Investment Bui Quang Vinh
Minister of Planning and Investment Bui Quang Vinh said, the debt was1.36 times more than their equity, but equal to less than half of the regulated level.
Up to 30 of 85 state-owned corporations and group have debts exceeding three times their equity. However, Vinh said that this was not a problem as the import thing was whether they were solvent. The taxes they pay have increased annually and SOEs play an important part in ensuring stability socially and economically.
He cited the case of the Electricity Group of Vietnam (EVN), who had to borrow large amounts of capital for power projects. After the plants come into operation, EVN will be able to recover the invested capital to repay its debts, he said. Therefore, SOEs should not be considered as the burden of the State budget and national economy.
He also cited a financial report from the Ministry of Finance saying that, only 20 percent of SOEs made losses or broke even in 2010, while the rest made profits.
The minister, however, admitted that SOEs still failed to meet expectations when it came to returns on their capital investment. According to the government Inspectorate, violations among SOEs over the recent years had caused huge losses to the country, particularly waste and misappropriation, triggering public outrage.
Vinh noted that stricter sanctions were needed to deal with the situation. SOEs must be required to publish their accounts like listed firms.
The Ministry of Planning and Investment will work with other ministries and agencies to revise Decree No. 132 on clearly defining the rights and tasks of state-owned capital ownership at SOEs and give the direct management of SOEs to authorised ministries. The decree will be submitted to the prime minister in early July for consideration.