The private sector is very active in key sectors of the economy. If there is a "push", they will become an important force with other economic sectors to take the country forward.
A private corporation recently inaugurated a 500 kV transformer station and a 220/500 kV transmission line combined with a 450 MW solar power plant in Ninh Thuan province in central Vietnam. This project was completed within only 102 days.
This was a historic milestone in the energy industry of Vietnam as private enterprises invested in energy transmission infrastructure.
But comparing this 500kV line with the national transmission lines of thousands of kilometers long, stretching from North to South, from East to West, invested by Electricity of Vietnam Group (EVN) would be unfair. However, it is an indicator that with a "push", the private sector can do many things. That "push" is profit. This company will not get money from the investment in the power line, but they will collect money from generating all the electricity capacity on the grid.
When answering the question "will private investors do better than EVN, a State-own group?" the general director of this private group said that private firms cannot be better than EVN. EVN has a team of very good and experienced staff and experts in the energy sector. Their financial capacity is also stronger. However, because it is responsible for supplying electricity for production and daily life across the country, ensuring energy security on a national scale, the electricity industry has to invest in and execute many works and projects at the same time, including power generation and transmission, so resources are scattered.
Another important issue that he mentioned is that EVN projects are public-funded projects, which use budget capital, so they must strictly comply with State-set processes and procedures to avoid loss and waste.
The project to build 500kV line implemented by the National Power Transmission Corporation is one of the important power supply projects for the South with a line length of up to 742km, a total of 1,606 columns going through nine provinces and cities: Ha Tinh, Quang Binh, Quang Tri, Thua Thien-Hue, Da Nang, Quang Nam, Quang Ngai, Kon Tum and Gia Lai.
However, due to problems in the work of compensation and site clearance, plus the impact of Covid-19 epidemic, the 500kV line project is behind schedule.
"Fast or slow" progress is due to site clearance, local leaders admit. However, localities and the Power Transmission Corporation can hardly do it faster when the state compensation rate has been "framed". They cannot pay VND1 billion in exchange for the land area to build a power pillar as private enterprises can.
Meanwhile, private firms can negotiate with the people on land acquisition and make decision themselves. There are private projects that need 45 days to complete site clearance.
Van Don international airport is another story. This is the first private-invested airport in Vietnam. This project has an investment capital of VND7 trillion and was built within only two years.
Meanwhile, after five years, the construction of Long Thanh airport has not been able to start. The project with a total investment of $16.06 billion is still in the process of completing procedures and site clearance. The investment for phase 1 is about $5.45 billion.
Promoting private investment
There is a lot of evidence showing that private-invested projects are often implemented significantly faster than state-owned projects. For the private sector, time is money. They take advantage of each minute so that their projects are implemented quickly, and the capital is used more efficiently.
In a report to the National Assembly on the implementation of the resolutions on finance, the Government compared the financial situation and the efficiency of production and business activities in 2018 among state-owned companies, joint stock companies with state capital contribution, foreign-invested enterprises, and private enterprises.
In terms of contributions to the state budget, the results show that private enterprises are the sector with the most budget contributions, far exceeding the remaining sectors, including the foreign-invested sector.
Specifically, state-owned enterprises contributed over VND267.98 trillion to the state budget, compared to VND99.72 trillion from joint-stock enterprises, VND186.37 trillion from foreign-invested enterprises and up to VND365.42 trillion from private enterprises.
According to the government's report, private enterprises hold the largest total assets (nine times more than the total assets of SOEs, 34 times more than that of JSCs with state capital contribution; five times more than that of the FDI sector), the largest equity (six times more than that of SOEs, 29 times over JSCs with state-owned capital; and three times over FDI enterprises); and they make the largest contribution to the state budget.
Notably, the private sector is the top taxpayer, while only 38% of private enterprises operate with profits. It means that the private sector still has plenty of room for development, to contribute more to the nation's construction.
What the private sector can do, let it do, because the state does not have enough resources, materials and human resources to carry out so many functions.
Vietnam needs to develop a strategy to promote the development of the private sector over the next decade to maintain growth, speakers said at a conference on socio-economic development from 2021 to 2030 held in HCM City last week.