Settlement plans thrashed out for 12 loss-making projects

Settlement plans thrashed out for 12 loss-making projects

Tu Hoang

Deputy Prime Minister Vuong Dinh Hue speaks at a meeting on how to cope with the loss-making projects in the industry and trade sector – PHOTO: CHINHPHU.VN

HANOI – Deputy Prime Minister Vuong Dinh Hue has thrashed out plans to deal with 12 loss-making projects and plants in the industry and trade sector in line with a conclusion of the Politburo.

Speaking at a meeting held in Hanoi on July 5, Hue told relevant agencies to follow the Politburo’s conclusion to achieve the targets set for the big-ticket projects funded by the State budget.

Hue, who is also head of the Government steering committee for dealing with a number of struggling plants and projects in the sector, emphasized the need to take drastic measures to solve outstanding issues and minimize losses at the projects.

He told agencies to map out settlement plans for the projects for submission to competent authorities for approval and start implementing them this year. The settlement plans must be completed by 2020.

Tough sanctions should be taken against those violating economic management regulations at the projects, Hue stressed.

The 12 projects cost a combined VND63.6 trillion, of which foreign loans accounted for VND6.6 trillion, and local bank loans VND41.8 trillion.

Deputy Minister of Industry and Trade Hoang Quoc Vuong said half of the projects had been put into operation but incurred losses, including four fertilizer plants, Dung Quat shipyard and Viet-Trung Steel Company.

Three projects which have been put on hold are Phu Tho ethanol plant, Phuong Nam paper pulp mill and phase two of Thai Nguyen steel plant. The three remaining projects are Binh Phuoc and Dung Quat ethanol plants and Dinh Vu polyester fiber factory.

Of the 12 projects, 10 had racked up accumulated losses of more than VND16.13 trillion by the end of 2016 and their combined equity had dropped to a mere VND3.95 trillion. 

In explaining the reasons behind their failures, Hue said their investment plans were approved in haste and their long construction delays led to cost overruns of 43%.

Some of the projects are still under construction while the completed ones are unable to operate.

Some of the projects and plants have been revitalized thanks to rescue measures. For instance, Ninh Binh and Ha Bac urea plants and Dinh Vu and Lao Cai DAP fertilizer plants are running at 80% capacity.

However, Hue expressed displeasure with the progress of Dung Quat shipyard, Dinh Vu polyester fiber factory and the ethanol plants under the Vietnam National Oil and Gas Group (PVN).

The possibility of resuming Dung Quat ethanol plant’s operation is low as it fails to meet economic and technical requirements, while Dinh Vu polyester fiber factory has gone from bad to worse due to pending legal cases.

Hue noted PVN had said it would be able to bring Dung Quat ethanol plant back to life but no move had been taken.

The investors must handle their 12 projects in line with market rules, Hue stressed, adding the Government would not come to their rescue.

Therefore, one of the priorities is to sell the projects to foreign investors and those deemed unable to recover losses should be dissolved.

 

 



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