Hanoi (VNA) – The operation efficiency of State-owned enterprises(SOEs) during 2011-2016 had yet to match the resources they were holding,according to a report delivered to the National Assembly on May 28.

The report, compiled by the NA specialised team to supervisethe management and use of state capital and assets in enterprises and SOEsequitisation during 2011-2016, said as of December 31, 2016, the nation had 583enterprises fully owned by the State.

Most enterprises posted profit and the profit increased yearafter year. They basically fulfilled their role as an important force of theeconomy, contributing to regulating and stabilising the macro-economy.

Their combined revenues reached 1.5 quadrillion VND (66billion USD) in 2016, and pre-tax profits were nearly 140 trillion VND (6.1billion USD). Several enterprises reported high profits such as Viettel Group,Vietnam Rubber Group and Vietnam Sugarcane and Sugar Corporation.

For enterprises partly owned by the State, 26.2 trillion VND(1.1 billion USD) of State stake was sold, earning over 36.5 trillion VND (1.6billion USD) for the State coffer during 2011-2015.

However, the supervision team said despite high growth in totalassets and capital, increases in revenues, pre-tax profits and contributions tothe State budget were slow at an average of 3 percent a year. Meanwhile, totaldebts remained high, rising 26 percent against 2011.

A number of SOEs occurred losses, while corruption and wastefulnesswere seen in some giants such as the Vietnam National Oil and Gas Group, the VietnamNational Chemical Group, the Electricity of Vietnam, and the Vietnam NationalCoal and Mineral Industries Group.

In addition, the restructuring of badly-performingbusinesses and the withdrawal of State capital from ineffective investmentprojects remained slow. Notably, several violations in the implementation ofpolicies and laws on the management and use of state capital and assets in enterprisesleft serious consequences, including the punishment of a number of involvedofficials.

In terms of SOE equitisation, the supervision team said thatthe work produced positive results. During 2011-2016, a total of 571 businesseswere privatised. Social capital was mobilised to invest in these businesses,thus contributing to changing the administration mode, creating motivation fordevelopment and increasing the efficiency of production and business.

However, the supervision team noted that some agencies andunits failed to meet requirements and progress of equitisation. The proportionof State stake in joint stock companies remained high. The number of sharessold at initial public offerings (IPO) was lower than the plan, which hinderedthe realization of the goal to attract capital from outside and renovatecorporate governance.

The equitisation process faced many difficulties related toland, while the implementation of policies and laws on SOE equitisation sawseveral violations related to businesses’ finance and the evaluation ofbusiness value.

The report of the supervision team also pointed to reasonsfor shortcomings in the management and use of State capital and assets inenterprises and SOE equitisation work.

It noted that along with the target of profits, SOEs had toimplement political and social welfare tasks in the context of instability indomestic, regional and international economies, thus affecting their growthrate, revenues and profits. The policy and law framework on the management anduse of State capital and assets in enterprises and SOE equitisation work stillhad many limitations.

In addition, agencies representing the State stake inenterprises have not performed well the supervision and inspection work.

To increase the efficiency of the implementation of laws andpolicies, the supervision team proposed the legislative body consider therevision of related laws to address shortcomings in current regulations.

The NA, NA Standing Committee, NA agencies, delegations ofdeputies and deputies should intensify supervision over the management and useof state capital and assets in enterprises and SOE equitisation.

Meanwhile, the Government should review the implementationof laws on the matter and proposed to the NA on revising or supplementingrelated laws. The Government should also complete regulations on selection,appointment and supervision of the management of enterprises and land afterequitisation, while directing the strict punishment of violations related tothe management and use of state capital and assets in enterprises and SOEequitisation.

The Government also need keep a close watch on themobilisation and use of capital of businesses, and allow the bankruptcy of SOEsas regulated by law.

The report stressed that the State budget should not be usedto rescue businesses in loss.

The supervision team suggested ministries, sectors andlocalities to complete and approve land use plans. It also asked SOEs tocontinue renovating business administration , focus on main businessactivities, and build a roadmap on recovering State investment in otherenterprises in a transparent manner and ensure the State’s interest.-VNA