On March 7, Deputy Prime Minister Le Minh Khai chaired a meeting of the Steering Committee for handling the existing weaknesses and shortcomings of some projects and enterprises with slow progress and low efficiency in the Industry and Trade sector, and discussed options for handling the Quang Ngai Shipbuilding Industry Co., Ltd (DQS).
PROJECT RESTRUCTURING PLAN SUBMITTED IN Q2/2024
Huynh Sy Hung, Vice Chairman of the State Capital Management Committee in Enterprises, said that based on assumptions about the market and using 100% of DQS’s capacity, as well as proposals for handling the current obstacles and shortcomings of DQS approved by PVN, two scenarios for DQS’s production and business results for the 2023-2035 period have been proposed.
The first scenario, restructuring and additional investment in shipyards and related items, is estimated to generate an average annual revenue of around 1,313 billion VND and an average annual profit of around 64 billion VND for the 2023-2025 period. The second scenario, restructuring and additional investment in shipyards and related items, as well as the demolition of ships, is estimated to generate an average annual revenue of around 1,499 billion VND and an average annual profit of around 65 billion VND.
According to Mai Thi Thu Van, Deputy Head of the Government Office, the DQS restructuring plan has been included in the 2024 work program of the Party Central Committee. It will be submitted to the Party Central Committee in Q2/2024.
Mai Thi Thu Van emphasized that PVN’s proposal for the restructure of the company requires a special mechanism. However, neither the State Capital Management Committee nor PVN have clarified the legal basis and determined the authority and policy mechanisms that need to be proposed to the Prime Minister and the Deputy Prime Minister – Head of the Steering Committee to address these issues.
Therefore, Mai Thi Thu Van emphasized that the State Capital Management Committee and PVN need to be more proactive and determined in implementing the directives of the Government leaders. The development plan for DQS is within the jurisdiction and direct responsibility of PVN and the State Capital Management Committee at the enterprise level – the representative agency of the owner under the provisions of the law.
CONCERNS ABOUT THE FEASIBILITY OF THE RESTRUCTURING PLAN
Representatives of relevant ministries and agencies expressed concerns during the meeting, stating that PVN’s proposed options still lack the necessary details to meet the requirements and clarify the feasibility, optimal solutions, and complete resolution of the further restructuring plan for DQS. There is still no agreement among the relevant parties on the proposed plan, the deadline for finalizing the data and reporting, the specific mechanism, and the handling of debts, especially with lenders and related contractors.
Representatives of the Ministry of Finance and the Ministry of Justice stated that PVN’s documents have not finalized the data and clarified the feasibility and optimal solutions proposed. A comparison with other options should be made to determine the best optimal, effective, and feasible option for consideration and decision-making by the competent authorities.
Therefore, it is proposed to clarify the feasibility and optimization of the plan, publicly disclose information and data, reach a consensus among the relevant stakeholders, and clarify the legal basis for the specific mechanism and the legal consequences if the specific mechanism is applied.
Leaders of the Ministry of Construction and the State Audit Office also emphasized the good potential of DQS for developing the shipbuilding and deep-water port industry from a national perspective. The reality shows that continuing the restructuring of DQS was agreed by the Steering Committee members. However, PVN needs to evaluate in more detail and determine the development potential of DQS to submit it for consideration and decision-making by the competent authorities. Furthermore, the financial status of DQS and the operational efficiency of DQS after restructuring should be clarified.
The Central Economic Commission, the State Audit Office, and the Ministry of Justice all agreed that a final plan should be proposed to the Party Central Committee. The longer it takes, the greater the cost. It is necessary to clearly distinguish and separate the political mission of state-owned enterprises involved in handling weak enterprises from the production and business tasks and activities based on market mechanisms, in order to propose a specific mechanism for handling.
REENGINEERING PROJECT PLAN MUST BE SUBMITTED BY MARCH 25 AT THE LATEST
Speaking at the meeting, Deputy Prime Minister Le Minh Khai expressed dissatisfaction that the Steering Committee had held multiple meetings to address the DQS project, but the proposed options from the Committee were still not specific and reasonable.
Deputy Prime Minister Khai stated that although the proposal for restructuring is good, the explanation and accompanying measures are still not feasible, specific, cohesive, and persuasive enough. Therefore, the final solution must be chosen to effectively resolve the issues and cannot be prolonged indefinitely, affecting the relevant agencies.
Deputy Prime Minister Khai requested the State Capital Management Committee at the enterprise level to consider and study the opinions of the Steering Committee members, improve the plan, and report it to the Government Permanent Deputy Prime Minister no later than March 25. The plan should be evaluated and propose the most optimal solution. The solution must be feasible, effective, and minimize losses and waste, with clear procedural requirements. The relevant units must be persistent, receptive to suggestions on the spirit of seeking solutions to address the obstacles in this project.
