Inefficient projects must be dissolved or filed for bankruptcy in compliance with current legislation to retrieve state capital as much as possible.

Prime Minister Nguyen Xuan Phuc at the meeting. Photo: Quang Hieu

Prime Minister Nguyen Xuan Phuc stressed the view at a government meeting discussing 12 ineffective and stagnant projects in the industry and trade sector on March 3.

At present, three projects have been taken out of the monitoring list of poor-performing ones, including the DAP1 Hai Phong Fertilizer Plant, Ethanol Binh Phuoc and Ethanol Phu Tho, for  becoming profitable.

 A report from the Ministry of Industry and Trade (MoIT) informed other projects are in operation but face large amount of accumulated losses, some  are underway or being put on hold.

One of the major obstacles preventing the state from withdrawing its capital in these projects is the ongoing legal disputes regarding the value of Engineering, Procurement and Construction (EPC) contracts for five projects.

As these loss-making projects are putting huge burden on the state budget, PM Phuc urged government agencies to take drastic measures to resolve the issue, asking the MoIT to submit a solution for the Phuong Nam Pulp Factory before March 10.

While the government stands firm on its stance of not pumping additional capital into those ineffective projects, Phuc requested the Committee for Management of State Capital at Enterprises (CMSC) to propose detailed solutions for the government to consider.

“The main goal is to minimize losses for the state budget and the economy in overall, at the same time ensuring lawful rights for workers, national security and defense,” Phuc said.

As of last October, total accumulated losses of 12 projects had reached VND26.3 trillion (US$1.14 billion).

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