The Ministry of Transport has been in the front line in restructuring its affiliated State-owned enterprises, Deputy Minister of Transport Nguyen Hong Truong told Hai quan (Customs) online newspaper.
Will you tell us some of the outstanding achievements in the equitisation of State owned enterprises (SOEs) in the transport sector?
By January, 2011, the Ministry of Transport had 94 State-owned enterprises. All faced big problems, due to a shortage of capital resources. Bad debts and high interest rates seriously affected their production. Many were on the verge of bankruptcy.
To solve the problem, in the last three years, the Ministry of Transport has successfully equitised 54 enterprises, including some big corporations, such as Viet Nam Airlines. In the first seven months of 2014, another nine enterprises were equitised.
What were the challenges that the ministry faced during the restructuring process?
There were quite a few challenges. First was the incomplete and unsynchronised legal system. This was the main obstacle for us to restructure big corporations, particularly the Viet Nam Shipbuilding Industry Corporation (Vinashin).
Secondly, there was a shortage of capital resources to do restructuring, particularly money to solve bad debts. In addition, high interest rates and the dramatic decline in the stock market were extra burdens.
Last but not least, was the lack of experiences. By early August this year, more than 100 SOEs had been equitised. However, they still face many challenges, particularly the volatile prices of raw materials and fuel and strict credit regulations.
What lessons have been learned from the restructuring process?
There are two main ones. Firstly, restructuring must be carried out synchronously, ranging from a communication campaign, policy implementation and measures to solve problems that arise.
Secondly, there must be strong co-ordination between line ministries and offices from the central Government down to the grass roots level. I want to emphasise the importance of having strategic investors before the initial public offering (IPO) is launched.
And finally, there must be strong commitment and determination from the ministry's Party Committee to restructuring transport enterprises under the ministry's management. This was the solid foundation for the success in restructuring more than 100 enterprises by the end of July.
In your opinion, has the ministry achieved its equitisation target for this and following years?
I'm confident that with lessons learned in the past three years that by the end of next year, the restructuring process of State owned enterprises in the ministry will be completed. So is their withdrawal of capital from non-core business. — VNS