VietNamNet Bridge - The huge debts incurred by state-owned enterprises (SOEs) and their ineffective operations have been blamed on ineffective monitoring.


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526 SOEs are holding total assets worth over VND3,000 trillion. Their total assets in 2017 increased by 3 percent compared with 2016, but their payable debts also surged to VND1,500 trillion, amounting to 57 percent of total capital of economic groups and general corporations.

The figures are found in a report on business performance in 2017 that the Minister of Finance submitted to the National Assembly. Of the total VND3,000 trillion worth of assets, VND2,800 trillion belonged to state-owned economic groups and general corporations, while the remaining VND239 trillion belonged to one-member limited companies.

526 SOEs are holding total assets worth over VND3,000 trillion. Their total assets in 2017 increased by 3 percent compared with 2016, but their payable debts also surged to VND1,500 trillion, amounting to 57 percent of total capital of economic groups and general corporations.

Analysts noted that many enterprises have the D/E ratio (debt on equity) higher than 3x. The ratios are 45.6 for Van Xuan Import/Export, 8.07 for the Vietnam Expressway Corporation (VEC), 7.88 for Military Petroleum and 3.3 for VTVCab.

The report shows that large economic groups are big debtors. PetroVietnam, the national oil & gas group, for example, owes VND146.6 trillion, the Electricity of Vietnam (EVN) VND132 trillion, Vinacomin VND48.7 trillion, Viettel VND43.5 trillion and Vinachem VND28.42 trillion. 

Besides domestic banks, SOEs have borrowed money from foreign finance institutions, totaling VND616 trillion.

Meanwhile, receivable debts in 2017 increased by 13 percent compared to 2016, to VND409 trillion. PetroVietnam has biggest bad debt amount of VND6.956 trillion, followed by the Vietnam Rubber Group VND1.557 trillion and Viettel VND1.406 trillion.

Pham Duc Chung from CIEM said SOEs took losses in many investment deals in other business fields and the capital still cannot be taken back because the real value of the projects are lower than the invested capital.

The report also shows the poor health of unprofitable businesses. The accumulative losses incurred by 10 economic groups and general corporations have reached VND12.074 trillion.

“The business performance and contribution by SOEs to the national economy remains modest which is not commensurate with the resources allocated by the State. Some projects incur big losses,” the report reads.

Le Dang Doanh, an economist, said the ineffective operation of SOEs has existed for many years, but it still as not been settled. This is blamed on both SOEs and state management agencies.

“There are interest groups,” Doanh commented, adding that if the interest groups continue to exist, the problem won’t be settled.

Pham Chi Lan, also a economist, said that risk management at SOEs has been ‘forgotten’, even though this is the prerequisite condition for private enterprises.

“SOEs ‘forget’ risk management because they will pocket money if they make a profit and the State will incur a loss if they take a loss,” Lan said.


US$1=VND22,000


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