07 July 2017

HCM City eyes 3 billion USD for socio-economic development

HCM City (VNA) – Prime Minister Nguyen Xuan Phuc has
green-lighted Ho Chi Minh City’s proposal to spend 67 trillion VND (almost 3
billion USD) raised from equitisation of State-owned companies and sale of
their stakes in non-core business for social development.

“HCM City plans to spend the money on medium- and long-term public
infrastructure and social projects in 2016 –20,” Pham Phu Quoc, General Director
of the HCM City Financial and Investment State-owned company (HFIC), told the
Government website baochinhphu.vn.

During the period, the city is expected to need 850 trillion VND (37.5
billion USD) for social development, but is prohibited from mobilising funds
for fear of breaching the permitted public debt limit.

With the current debt level, the city can only mobilise another 70
percent of this year’s budget from issuance of bonds and the like.

“The money is small compared with the need,” Quoc said.

“Therefore, the 67 trillion VND package has much significance for
the city’s development.”

The Prime Minister has also permitted the HFIC to represent the
city in businesses where it owns stakes.

But questions have been asked if money raised from equitisation
should not go into the Business Development and Support Fund first and about
the legality of appointing the HFIC to manage the money and represent the city
on the boards of companies.

Quoc dismissed these concerns, saying, “It is in line with article
No. 13 in the 2015 State Budget Law.”

The law says “Local money, which is recouped from economic
organisations, shall remain at the local level.”

This model has been run on a pilot basis since 2010 and is
considered a success.

“HCM City has sent a report to the Prime Minister about the model
and confirmed that HFIC has successfully completed its task of safeguarding and
developing State capital resources,” Quoc said.

Tran Vinh Tuyen, Vice Chairman of the municipal People’s
Committee, said: “Leaders and experts spent a lot of time to establish the
HFIC. The corporation operates as a business and the HCM City People’s
Committee directly manages it.”

The strength of the model lies in professionalising the role of
the representative of State capital in businesses by applying international
governance standards, he added.-VNA



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