Ministry of Industry and Trade requests PVN to resolutely handle 5 projects with losses of trillions

The leaders of the Ministry of Industry and Trade requested PVN to thoroughly handle 5 loss-making projects according to existing plans, without using additional State capital.

On the afternoon of July 7, the Ministry of Industry and Trade held a working session with the Vietnam Oil and Gas Group (PVN), determined to find a solution to handle 5 loss-making projects of this group, which are among the total 12 loss-making projects of the Industry and Trade sector.

The biggest problem is…money

Reporting to the leaders of the Ministry of Industry and Trade, Mr. Nguyen Vu Truong Son, General Director and Chairman of the Board of Directors of PVN, said that, implementing the direction of Deputy Prime Minister Trinh Dinh Dung, from the beginning of the year, the group has seriously assigned specific tasks to handle each project.

"Currently, the group has a specific plan and proposal to send to the Steering Committee and the Ministry of Industry and Trade, but due to objective and subjective reasons and financial problems, not much work has been done yet," said Mr. Son.

Deputy Minister of Industry and Trade - Hoang Quoc Vuong directed the Oil and Gas Group to implement a plan to handle loss-making projects.

The head of PVN also pointed out the difficulties and problems in handling the loss-making projects of the group. Specifically, the settlement of EPC contracts of the projects, each project has its own characteristics; the settlement is related to foreign partners as well as those outside PVN...

As for the Phu Tho and Dung Quat Biofuel Plants, PVN has decided to close the contract settlement, but will need the direction of the Ministry of Industry and Trade and the Government. In particular, the project needs bank loans, if there is no direction from the Government, contract payment and loan restructuring will be a big problem.

On the other hand, restarting projects is facing difficulties in terms of cash flow and costs, especially when these projects do not receive additional state capital. "This is the biggest obstacle, so it has not been implemented yet," Mr. Son expressed, adding that all projects have implementation plans but all require financial approval from shareholders, the Ministry of Industry and Trade and the Government to allow the use of capital.

For projects that require hiring consultants to evaluate assets and develop divestment plans, Mr. Son said that this is a negative option and the group does not want it, but still requires certain costs for consulting companies, maintaining assets, and protecting electricity and water for the project for a period of 18-2 years. "Dinh Vu fiber alone took 2 years and cost hundreds of billions, so we have to ask for further approval," said Mr. Son.

At the meeting, sharing the difficulties, Mr. Nguyen Hung Dung, Deputy General Director of PVN also said that the group has prepared all options, from auction, divestment and bankruptcy for loss-making projects. However, all options have the common difficulty of not being granted additional state capital to handle.

"If implemented strictly, it will be impossible to handle while superiors are directing to resolutely handle according to market mechanism principles, respecting the principles of autonomy and self-responsibility," Mr. Hung said.

The representative of Dinh Vu - Hai Phong PV Tex Fiber Factory also said that according to the Steering Committee's handling plan, it would take 6 months to restart this project, but due to the additional time needed to survey the situation, hire experts, etc., it would take about 12 months to repair and maintain before it could restart, and the current difficult problem is the time to train human resources.

“Regarding the budget, it is determined that PV Tex needs 256 billion VND to restart, but 172 billion VND has been used to pay off old debts, 40 billion VND for maintenance, 17 billion VND for training workers, hiring experts to buy tools, and also ensuring a stable power source,” said the leader of PV Tex.

Determined not to invest more state capital

Concluding the working session, Deputy Minister of Industry and Trade - Mr. Hoang Quoc Vuong reiterated the direction of Deputy Prime Minister Vuong Dinh Hue at the meeting on July 5.

The Ministry of Industry and Trade directed the drastic implementation of handling of loss-making projects in 2017, completing the handling plan so that all difficulties are basically resolved in 2018 and completely completed in 2020.

Mr. Vuong affirmed: The State does not invest more capital in loss-making projects, so businesses must have solutions, such as setting up a reserve fund if the project does not continue, goes bankrupt, and the transfer sale will collect a portion of the costs incurred from that project.

One of the loss-making projects of the Vietnam National Oil and Gas Group

“However, the priority is to restart the project before divesting. Therefore, enterprises operating under the mechanism of joint stock companies need to hold a shareholder meeting to agree on a plan to supplement capital, increase capital for handling, then agree to report to the Prime Minister before July 15. If the Government does not agree to shareholders adding more capital, the enterprise will switch to option 2, which is to transfer or sell,” Mr. Vuong stated.

Specifically, for the Dinh Vu fiber project (PV Tex), Mr. Vuong requested to follow the plan of the Steering Committee: Choose to restart the project and cooperate with foreign countries to negotiate in the most beneficial direction, so it is necessary to focus on this plan to re-evaluate the technical status and organize the restart of the factory.

Dung Quat Ethanol Project must restart the project before divesting. Phu Tho Ethanol Project implements the plan to stop implementation and go bankrupt, so PVN is requested to carry out dissolution and bankruptcy procedures to be resolved.

For the Binh Phuoc Bio-Refinery, PVN needs to work with its Thai partner soon to quickly restart it to both ensure good divestment and serve the bio-fuel replacement program.

Regarding the Dung Quat Shipyard project, Deputy Minister Hoang Quoc Vuong requested: To implement bankruptcy, it is necessary to settle the EPC contract and evaluate the contract for early settlement.

"Determine the value of old ships and immediately dispose of unused assets because the amount of these assets is very large. If handled immediately, the financial situation will improve," Deputy Minister Hoang Quoc Vuong pointed out./.

According to VOV