Failing PVN projects to be bankrupted

Deputy Minister of Industry and Trade Hoang Quoc Vuong said the government might allow the Vietnam Oil and Gas Group (PVN) to agree to bankruptcy proceedings for some of its projects during a meeting on July 7.

Vuong repeated the Deputy Prime Minister Vuong Dinh Hue's criticism of PVN at a July 7 meeting that there was no improvement to deal with failing projects in recent years. The government will try to restart the projects, but if they prove inefficient they will let them go to the wall.


"There was a lack of aggressive directives from the PVN, other investors and contractors," Nguyen Vu Truong Son, director of PVN, admitted that it was their fault. He went on to say that they also needed directives from the government.

According to the Politburo, the government won't make any more investment into the projects. But Son said such perspective prevented them from finding investment as most of the shareholders are state firms.

"Bankruptcy is the worse solution but even then, money is still needed for hiring consultants and paying power and water bills. The electricity bill at PVTex Dinh Vu JSC is VND500m (US$22,000) a month," he said.

PVTex Dinh Vu's chairman Pham Van Chat said the factory had halted operation for the past 22 months. They will need a whole year to hire and train employees in order to restart the factory. About VND250bn (US$11m) will be needed to pay VND172bn debts, VND40bn maintenance fee, and VND17bn for training courses and more.

PVTex is taking salaries of some employees who are on overseas business trips to pay for 140 guards and maintenance employees at the time.

Phan Tu Giang, director of Dung Quat Shipbuilding Company, said nothing had been done ever since the company was transferred from the Vietnam Shipbuilding Industry Group (Vinashin) to PVN for restructuring. He hoped to be given projects as no one wanted to hire Dung Quat Shipbuilding Company when they see that the company is still bearing old debts. The proposal was refused.

Director of PVN Nguyen Vu Truong Son then said the only option left was bankruptcy. Son also asked PVOil to build a plan to gradually divest and file Phu Tho ethanol plant for bankruptcy. They will also try to restart ethanol plants in Quang Ngai and Binh Phuong and then divest from them. When a state-owned firm is bankrupted, its chairman and general director are banned from work in other state-owned firms.

Deputy Minister of Industry and Trade Hoang Quoc Vuong said a plan was ordered to be created and submitted to the government so that they could make some changes next year and completely deal with the losses in 2020.

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