GREATER EFFORTS NEEDED TO TACKLE INEFFICIENT PROJECTS

Greater efforts and determination were needed to thoroughly tackle stagnant State-owned projects and create new resources and motivation to revive these projects and enable them to promote the country’s economic development.

The work of reviving loss-making projects saw considerable results in recent years. Notably, Thái Bình Thermoelectricity plant No 2 started operation on March 23 after 11 years of stagnation, aiming to get to connected to the national grid by the end of this month.

After more than three years handling 12 inefficient projects under the management of the Ministry of Industry and Trade, five have been removed from this list.

However, there were many challenges ahead, especially in handling Engineering, Procurement and Construction (EPC) contract disputes or resolving financial difficulties.

According to Hồ Sỹ Hùng, Deputy Chairman of the Committee for Management of State Capital at Enterprises, seven remaining inefficient projects all faced problems related to EPC contracts, especially disagreements between the investors and contractors, which caused these projects to stall.

The second biggest problem was huge financial costs, Hùng pointed out, adding that if the financial problems were not resolved, it would be impossible for these projects to compete in the market due to their high costs.

Phan Đức Hiếu, member of the National Assembly Economic Committee, said that there was indeed no good solution but only the optimal solution to deal with the problems to minimise damage to State assets and to bring about the best possible results.

“I am glad that there is an agreement on the approach to handle inefficient projects that is putting the interests of the State first and minimising damage,” Hiếu said, adding that disagreements in the way the projects were handled would cause a lot of difficulties in implementation.

Projects which could not find markets or could not be recovered should be allowed to go bankrupt, Hiếu said, adding that each project should be handled in a different way to achieve the best results.

Focus should be placed on reducing costs, improving efficiency and restructuring products to gain markets, he stressed.

He said to achieve efficiency in handling loss-making projects, it was essential to base work on the market.

Source: VNS