Vietnamese Gov’t stipulates fields under State control post-privatization

The Vietnamese Government is expected to hold over 50% of the stake at state-owned enterprises (SOEs) in the fields of clean water supply and sewerage.

Production at Ca Mau Fertilizer Plant. Photo: Hoang Anh

The move was revealed in Prime Minister Pham Minh Chinh’s decision No.26/2021/QD-TTg on the list of business fields in which SOEs must undergo privatization.

The government would hold a maximum of 50% of stake in fields of environmental sanitation; wastewater treatment; public lighting in order to ensure consistent service quality.

Other services that are subject to state ownership are between 35 and50% including urban planning, audit, road and bus station maintenance, trade promotion, industrial parks development, among others.

The prime minister requested ministries and localities to soon submit a list of SOEs in such fields that would be privatized for the 2021-2025 period, with the deadline set in the fourth quarter of this year.

The Ministry of Planning and Investment (MPI) is tasked with cooperating with other agencies in reviewing the existing privatization policy and the current progress of SOEs privatization.

In 2020, nine SOEs were privatized for proceeds of VND949 billion (US$41.2 million), which resulted in a total of 180 state firms completing the privatization process in the 2016-2020 period and raising VND36.5 trillion ($1.58 billion) for the state budget.

The process remains pending in 89 SOEs, including 13 in the capital city and 38 in the country’s southern hub. The others include six managed by the Committee for State Capital Management (CSCM), four under the Ministry of Industry and Trade (MoIT), and two under the Ministry of Construction (MoC).

Major bottlenecks in the privatization process include business valuation and the approval of land-use plans to prevent possible revenue loss for the state budget after privatization.