VietNamNet Bridge – Admitting that nearly one third of State-owned groups have debts that are three times higher than their own capital, Minister of Planning and Investment Bui Quang Vinh said that this matter is “not so worrying.”

Attending the program “People ask, Ministers answer” on the government website this week, Vinh was asked: “Are State-owned businesses burdens of the state budget and the economy when 30 out of 85 State-owned groups and corporations have debts that are three times higher than their own capital?”

The Minister said that people should be careful in assessing these businesses because they have a long history of development; they have played the key role of the national economy in many periods. They run key industries of the economy like power, petrol, cement, etc.

According to the government’s regulations, the ratio of debt/own capital of State-owned enterprises should not be over three. The Ministry of Finance’s report shows that the ratio is only 1.36 on average. Specifically, the total debt of State-owned enterprises is VND1.008 trillion ($50.4 billion) compared to VND790 trillion ($39.5 billion) of own capital. Some groups have high ratio of debt/own capital because they need capital for production.

Vinh cited the Electricity of Vietnam (EVN) Group as an example. EVN has to borrow huge capital to build power plants. Once these works are put into operation, EVN can retrieve capital and pay debts.

“It is important that they can pay debts. We should not see State-owned groups and corporations as the burden of the state budget and the economy,” the minister stressed.

According to a report of the Ministry of Finance, by 2010, 20 percent of State-owned enterprises got losses and 80 percent earned profit.

However, Vinh said that State-owned enterprises have not effectively used State resources and capital. Some of them committed mistakes, causing losses. He said enterprises that broke the law must be strictly punished but the contribution of State-owned enterprises should not be denied.

In the cases of the Vietnam Shipbuilding Industry Group (Vinashin) and the Vietnam Shipping Lines Group (Vinalines), violations were committed by individuals. Vinh said that the key solution is imposing stronger sanctions, forcing enterprises to perform information closure and transparency and to annually perform compulsory auditing.

The Minister said that his ministry has combined with relevant agencies to amend Decree 132 in order to make clear the rights and duties of the owner of state capital.

At the recent National Assembly session, many deputies said that state-owned groups like Vinashin and Vinalines caused losses of billion USD. They said that State-owned groups were likely “iron fist” which is melting.

Compiled by Na Son