The government’s report to the National Assembly’s Deputies on October 5 included updates about the 12 loss-making projects.

The Ha Bac Fertilizer Plant

The report says the figures about the economic losses to the state caused by the 12 projects are still unclear because of the disputes and problems in EPC contracts in five out of 12 projects. The final settlement and exact valuation of the projects have not been completed.

The financial situation of the 12 projects was still gloomy in H1 2020: the stockholder equity was minus (-) VND7.200 trillion. The total asset value was VND59.1 trillion, while total liabilities reached VND63.3 trillion.

The accumulated loss of the projects had reached VND26.3 trillion.

In the Government Office’s Document No 90 dated July 11, 2020 on the Prime Minister’s conclusion at the meeting between the government and the steering committee on handling the problems of loss-making projects, the Prime Minister asked the committee to speed up the handling and complete the process within 2020, or the first half of 2021 at the latest.

The Phuong Nam Pulp Plant project, capitalized at VND3 trillion, has been left idle for tens of years and no way out has been found as it cannot find buyers.

In 2017, Vinapaco, the investor of the project, organized the first auction, but it failed. After the first certificate of valuation expired, the company conducted the second asset and inventory valuation.

Deputy PM Vuong Dinh Hue requested the State Audit to audit the result of the second valuation by Vinapaco.

However, after the State Audit added Phuong Nam into its 2019 auditing plan the second certificate of valuation also was expired (the certificate is valid for 6 months from the date of issue).

On October 22, 2019, MOIT released Document 7970, requesting Vinapaco to hire consultants for a valuation of the total assets and inventories of the project.

Vinapaco is considering the draft of asset valuation documents compiled by consultants before official issuance. After the results of the valuation are available, VInapaco will send the results to the State Audit for auditing as per the instruction of Deputy PM Truong Hoa Binh.

As of December 31, 2019, the total liabilities of the project had reached VND3 trillion.

The problems of the projects also have relations with the lawsuit between PVComBank and VInapaco, under which the former has sued the latter and asked for payment of VND592.3 billion.

The 12 loss-making projects include four fertilizer production, three biofuel production, two steel manufacturing, one polyester production, one pulp and one shipbuilding project. 

L. Bang

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