How to deal with wasteful and ineffective projects?

The Government needs to specifically report on plans to handle wasteful and ineffective investment projects that the public is concerned about.

On the morning of October 17, the Standing Committee gave opinions on the report on the socio-economic situation in 2016 and the plan for 2017.

The Economic Committee's audit report, presented by Chairman Vu Hong Thanh, assessed the implementation of tasks and solutions according to the National Assembly's resolution, stating that the Government has directed ministries and branches to implement many solutions to support businesses in terms of market and credit growth in line with the economic recovery momentum. Reasonable money supply management has created conditions to stabilize interest rates and support exchange rate stability in the context of a sharp increase in CPI compared to 2015.

Chairman of the National Assembly's Economic Committee Vu Hong Thanh.

However, the high bad debt ratio and the weakness of some commercial banks, and the interest rates on government bonds, although decreasing, are still quite high, making it difficult to lower the interest rate level for businesses to borrow capital, the appraisal agency analyzed.

Regarding the restructuring of credit institutions, there are opinions that there are still many problems, and that risk management, operations, auditing, and internal control activities at some credit institutions still have risks. The situation of divestment of investment capital by credit institutions in non-financial sectors and fields or risky investment fields and divestment of State-owned corporations and groups in the banking sector is still slow.

Credit growth for real estate has slowed down but risk control still needs to be strengthened to ensure sustainable market development. Newly zoned bad debt has not been completely resolved.

“According to the State Bank’s report, bad debt as of September 2016 was about 2.62% of total outstanding debt. If we count bad debts transferred to VAMC (about 4.8%) and restructured debts, the bad debt ratio will be much higher,” said Mr. Vu Hong Thanh, suggesting that the Government should report more clearly on upcoming solutions to handle bad debts that VAMC has bought back, and the restructuring of bank debts of large domestic enterprises.

Need to report on handling wasteful and ineffective projects

The audit report stated that many opinions commented that the restructuring of state-owned enterprises has had little change. The speed of equitization of state-owned enterprises is slow, partly due to the lack of drastic participation of ministries and branches, and the lack of determination of the responsibilities of enterprise leaders.

In addition, the number of enterprises in which the State holds 100% of charter capital is still large, and the production and business efficiency of many state-owned enterprises is not commensurate with the potential and resources assigned by the State.

The auditing agency requested that the Government should report specifically on the effectiveness of state capital management and use and plans to handle wasteful and ineffective investment projects that the public is concerned about.

Specifically, the Dinh Vu fiber factory project (total investment capital of 7,000 billion VND), the Dung Quat Bio-Ethanol Biofuel factory project (one of the three key national ethanol factories, total investment capital of 2,200 billion VND). The Thai Nguyen Iron and Steel Factory expansion project phase 2 (total investment capital of 8,000 billion VND), the Phuong Nam pulp factory project, Long An province (total investment capital of 3,000 billion VND), the Ninh Binh Fertilizer Factory project (total investment capital of 12,000 billion VND)./.

According to VOV