Enhancing Operational Efficiency in SOEs

Prime Minister Pham Minh Chinh recently issued and officially promulgated Directive 07/CT-TTg, dated February 22, 2024, focusing on innovative governance, elevating production and business efficiency while robustly advancing investment and development initiatives within State-Owned Enterprises (SOEs).

On February 13, 2024, Prime Minister Pham Minh Chinh inspected the Long Thanh Airport Project in Binh Son commune, Long Thanh district, Dong Nai province, emphasizing the urgency to accelerate the project’s progress

Underlining the dynamic and complicated global and domestic landscape in 2023, the directive acknowledged the swift and complex evolution of situations, exerting considerable pressure and substantial impact on the country's socio-economic development. Yet, through the collective participation and determined efforts of the entire political apparatus, Vietnam has made important achievements and established itself as a bright spot in the global economy.

Apart from these accomplishments, the operations of state-owned enterprises have revealed certain limitations. Some SOEs have not optimally utilized resources, capital and assets provided by the State. The investment capital budget for 2023 fell short of the established plan, and some SOEs experienced financial losses. Constraints persist in competitive capacity, scientific and technological application, innovation and digital transformation, while corporate governance innovation remains sluggish.

Prime Minister Pham Minh Chinh required SOEs to heighten awareness and responsibility in managing state capital and assets, particularly emphasizing the roles of Chairmen and General Directors/Directors as representatives of state capital. The Prime Minister called for a proactive approach, fostering self-reliance, initiative, creativity and a willingness to shoulder responsibility. He urged a transformative spirit and innovative approaches, coupled with resolute determination and decisiveness in action.

Simultaneously, Prime Minister Pham Minh Chinh required SOEs to promptly and efficiently execute the Enterprise Restructuring Project for the 2021-2025 period. Additionally, he underscored the implementation of approved annual and 5-year development, business, and investment strategies for SOEs, aligning with the Government's directives.

Advancing the leadership role of SOEs

Prime Minister Pham Minh Chinh emphasized the role of SOEs in the national economy. These enterprises are to serve as trailblazers, driving innovation, digital transformation and economic recovery.

Especially, those SOEs engaged in the investment and construction of critical infrastructure and pivotal traffic projects are mandated to expedite progress while upholding standards of quality, efficiency and safety. Their focus extends to the implementation of important national transport infrastructure, including the North-South Eastern Expressway, East-West Highways, and expressways linking key economic regions. This aligns with the goals outlined in the 13th Congress of the Party, aiming to complete over 3,000 km of expressways by 2025 and surpass 5,000 km by 2030.

The imperative extends to accelerating key projects such as Ring Road 4 in the Capital Region, Ring Road 3 in Ho Chi Minh City, Long Thanh International Airport, and the T3 Passenger Terminal at Tan Son Nhat Airport. Additionally, there is a call for the enhancement of maritime channels leading to Cai Mep-Thi Vai Port and Nam Nghi Son Port.

The Military Industry and Telecommunications Group (Viettel), VNPT, Mobifone and Global Telecommunications Technology Corporation (GTEL) are urged to persist in promoting investment projects aimed at developing and popularizing the telecommunications infrastructure system. Their endeavors extend to the creation of data centers, cloud computing infrastructure, digital technology infrastructure, and digital platforms, driving motivation for digital economic development. Simultaneously, these entities are expected to assume a pivotal role in pioneering research on emerging technologies, including semiconductor chips.

In 2023, the Vietnam Oil and Gas Group (PVN) reported a total revenue of VND942.8 trillion, surpassing 39% of the annual plan

Addressing challenges in gas power projects

The Vietnam Electricity Group (EVN) will expedite the implementation of the 500 KV Circuit 3-line projects, connecting Quang Trach (Quang Binh) to Pho Noi (Hung Yen), expected to achieve operational readiness by June 2024.

EVN, along with the Vietnam Oil and Gas Group (PVN), the Vietnam Coal and Mineral Industry Group (TKV), and their affiliated units, is requested to diligently execute the National Electricity Development Plan for 2021-2030 with a vision toward 2050 (Power Plan VIII). This roadmap ensures national energy security while meeting the electricity demands of production, business, and public consumption. To overcome bottlenecks and challenges inherent in gas thermal power projects, both EVN and PVN are requested to actively propose solutions to competent authorities. Their collaborative efforts aim to accelerate investment progress in gas power projects and other related ventures.

Additionally, the Vietnam Petroleum Group and other SOEs play a pivotal role in the petroleum sector. These entities must enhance their capacity to forecast global market price fluctuations proactively. They need to secure a stable petroleum supply for the economy, mitigating the impact of volatile world petroleum prices.

SOEs entrusted with managing and operating agricultural infrastructure systems such as irrigation works must continue to effectively address drought and saltwater intrusion to contribute significantly to national food security and bolster agricultural exports.

The Northern Food Corporation and Southern Food Corporation are actively and proactively engaged in the effective execution of the "Sustainable Development of One Million Hectares" project, specializing in high-quality, low-emission rice cultivation, intricately linked with green growth in the Mekong Delta until 2030.

The Vietnam Rubber Group is expected to leverage its strengths for the production and export of rubber latex products, concurrently promoting wood processing activities and the export of fine furniture.

Enterprises providing seafood exploitation services maintain an important role in offering logistical support to offshore fishermen, thereby fostering the growth of the marine economy.

SOEs under the Ministry of Industry and Trade, Ho Chi Minh City People's Committee, Hanoi City People's Committee, and People's Committees of centrally-run provinces and cities, operating in industry, trade, services and tourism, persistently enhance the competitiveness of industrial manufacturing enterprises. Their focus extends to bolstering the supporting industry sector, fostering e-commerce development, driving the growth of the domestic market, advancing logistics, and revitalizing tourism products in tandem with the night economy in major cities.

SOEs delivering public services in localities are entrusted with the responsibility of efficiently providing public services, ensuring social security, and elevating quality of life, with a particular emphasis on urban flood prevention and ensuring a consistent supply of clean water.

In the realm of construction and development of urban infrastructure and housing, SOEs are poised to spearhead social housing projects and worker housing initiatives. Their commitment aligns with the swift and effective implementation of the "Investment and Construction of at Least One Million Social Housing Apartments" project, with a target of completing around 130,000 apartments in 2024.

State-owned commercial banks remain steadfast in reviewing and streamlining lending and disbursement procedures, aligning with regulations. This effort is to reduce costs, striving to lower lending interest rates and ensuring interest costs to underpin economic recovery.

Enhancing the investment and business environment

Government entities, including ministries, agencies, People's Committees of centrally-run provinces and cities, and owner representative agencies, are actively advancing the reform of administrative procedures to enhance the business investment environment. Their focus is on eliminating unnecessary, inappropriate and unfeasible regulations, decisively reducing administrative burdens, and proactively addressing challenges to expedite customs clearance, particularly for seasonal agricultural and aquatic products.

They are requested to rectify and thoroughly overcome any tendencies to evade responsibilities in fulfilling public duties. Simultaneously, support is pledged for officials exhibiting the courage to innovate, act decisively and assume accountability for the collective welfare, encompassing the interests of both the populace and businesses.

The Prime Minister requested ongoing scrutiny and enhancement of mechanisms, policies and legal frameworks pertaining to the corporate bond market, land use rights, real estate, labor, science, technology and energy. This approach aims to elevate the efficiency of resource mobilization and utilization for production and business activities.

Actualizing land law

The Prime Minister urged the Ministries of Natural Resources and Environment, Finance, and Agriculture and Rural Development to swiftly present detailed decrees to the Government, ensuring the implementation of the Land Law. This initiative is poised to breathe life into the Land Law, facilitating resource mobilization, fostering socio-economic development, and bolstering the production and business endeavors of SOEs.

In tandem, People's Committees of centrally run provinces and cities are accelerating the reorganization and management of local enterprises' properties within their jurisdiction, wielding their authority to eliminate impediments and liberate resources for production and business growth. It is incumbent upon them to promptly allocate and lease land, determining land use fees in strict accordance with legal stipulations.

Furthermore, the Prime Minister urged researching and establishing conducive conditions for expediting procedures related to land use rights certificate applications, particularly for land earmarked for construction works supporting railway transport operations.

Source: Vietnam Business Forum