A speedier privatization process of state-owned enterprises (SOEs) would be key to boost their efficiency, in turn contributing to economic development, social advancement and equality.

Production of animal feed at Masan Group's subsidiary. Photo: Trong Tung

The Ministry of Finance (MoF) made the view clear as it referred to the ongoing process of drafting a legal framework for SOEs restructuring process in the 2021-2025 period.

During the 2016-2020 period, only 39 were sold on the Government's list of 128 must-be-privatized SOEs in 2020, meeting just 30% of the target.

Among the remaining SOEs that are required for privatization, those in Hanoi and Ho Chi Minh City make up 54% of the total, including 13 in the capital city and 38 in the country’s southern hub. The others include six managed by the Committee for State Capital Management (CSCM), four under the Ministry of Industry and Trade (MoIT), and two under the Ministry of Construction (MoC).

The MoF expressed concern that none in the list has made significant progress in the privatization process during the first four months of this year, while SOEs have divested a total VND286.6 billion (US$12.37 million) in book value for VND2.16 trillion (US$93.3 million) in proceeds in January-April.

The ministry attributed the slow progress in privatization and divestment of SOEs to the Covid-19 pandemic, as well as a lack of commitment from localities and SOEs in complying with the PM’s instruction for SOE restructuring.

To further speed up the privatization process, the MoF urged SOEs under the list to review their restructuring processes and identifies difficulties in privatization and state capital divestment.

“The focus should be to deal with 12 loss-making projects formerly under the administration of the Ministry of Industry and Trade,” noted the MoF. As of last October, total accumulated losses of 12 projects had reached VND26.3 trillion (US$1.14 billion).

According to the MoF, state firms are requested to list share on the stock market following the completion of the privatization process.

“Leaders at SOEs having not gone public would be subject to disciplinary measures,” noted the ministry.

According to the MoF, some large SOEs are facing difficulties in business valuation, including Vietnam Posts and Telecommunications Group (VNPT), Vietnam National Chemical Group, Vietnam National Coal – Mineral Industries, MobiFone, and Vietnam Bank for Agriculture and Rural Development (Agribank).