Equitisation Evaluation: Land Use Rights Included

Equitisation Evaluation: Land Use Rights Included

The authorities of Ho Chi Minh City have allowed land use rights to be included in the evaluation of assets of State-owned enterprises (SOEs) to accelerate the process of equitisation.

A directive, signed by Vice-Chairman Nguyen Thien Nhan on August 6, is aimed at stepping up the reform of SOEs so as to complete the process next year. Accordingly, SOEs can choose one of two forms of evaluation: either including the land use rights to the asset value of SOEs as part of the State capital in the equitised enterprises; or renting land at the price set by the relevant State authorities.

However, the directive does not allow the transfer of fixed assets (workshops, warehouses, infrastructure, etc.) rented from State companies, cities and districts. The equitisation or reform of SOEs in the past 10 years was aimed at increasing the efficiency of the privileged but less dynamic economic sector. Equitisation is considered by SOEs as the most desirable type of reform, however, the process still remains slow in its application. The main cause for the slow pace is the lengthy evaluation of assets and the inclusion of the land use right in the assets of enterprises.

The directive is based on the amendment of the Land Law in 2003 and will remove the difficulty deriving from the land use right in the process of equitisation. In 2004, Ho Chi Minh City will equities 43 SOEs and will complete the process of another 117 SOEs in 2005.

• B.H