Lessons from weak projects and future directions

DNHN - Under the Government's and Prime Minister's stern leadership, several weak and sluggish projects have seen significant improvements, with some becoming operational and profitable. However, numerous obstacles remain in dealing with underperforming projects as a result of market development conditions, giving legal counsel to firms dealing with EPC contract disputes, and addressing challenging financial concerns, among others.

To review the achieved results, thereby drawing lessons from experience and proposing new mechanisms for handling inefficient projects that still exist, on April 5, the Government Portal organized Organized the Seminar "Handling weak projects: Lessons learned and future directions". 

Mr Ho Sy Hung, Vice Chairman of the Committee for the Management of State Capital at Enterprises said on the talk show that 5 projects have been removed from the list of 12 long-lasting, loss-making projects including the Dinh Vu polyester fibre production machine, 1-Hai Phong DAP fertilizer factory, Phu Tho biofuel factory (PVB) and Binh Phuoc biofuel factory (OBF); Dung Quat Biofuel Factory. Up to now, the projects have no longer had problems with mechanisms and policies.

Mr Ho Sy Hung stated:”All 5 projects are proposed to handle problems for businesses in the direction of following the market, respecting the legal entity of the business, without rough intervention. Projects are considered above, below, forward and backwards according to the principle of efficiency, classifying each project or group of projects. Especially for projects with resilience, seeing effective and stable prospects, they will be focused on handling soon”.

Deputy Minister of Industry and Trade Dang Hoang An affirmed:”It is possible to assert that we have never witnessed projects receiving such close, consistent, and ongoing direction”. 

Because the previous Government and this class were tasked with directing up to twenty meetings during completing these initiatives. Ministry and branch participation are also very close, including Industry and Trade, Finance, Planning and Investment, and Justice. Credit institutions, led by the government and project sponsors, also took an active role; participating agencies and units unanimously executed several linked solutions aimed at resolving project-related challenges.

National Assembly delegate Phan Duc Hieu, Standing Member of the Economic Committee of the National Assembly acknowledged:”With considerable effort in the first year of the new term, the Government and its ministries and branches can be recognized to have made significant achievements. While the handling of weak projects continues to exist, I value two points: projects that have been actively managed and managed successfully”.

Particularly for the Thai Binh 2 Thermal Power Plant, although it is not on the list of 12 weak projects, it is also a project that has been "frozen" for 11 years. Recently, under the drastic direction of the Government, the Prime Minister, the synchronous participation of the ministries, branches and projects organized the first fire of unit 1 on March 23, to dissipate the power grid on April 30 and burn coal for the first time of unit 1 on June 16. 

Deputy Minister of Industry and Trade Dang Hoang An said that, with the request of the Prime Minister "at all costs, by all means, this project must be put into operation", the project investor - Vietnam Oil and Gas Group and the investor of the project. Contractors on the construction site put a lot of effort.

Deputy Minister said:”The Ministry of Industry and Trade maintains the Office of the National Steering Committee on Electricity Development at the Minister's request to keep abreast of weekly developments. The number of personnel working on the project site has climbed to 1,000 so far, significantly more than during the previous restart period. Additionally, I anticipate that between now and June 16, we will achieve two significant milestones. Connecting to the grid for the first time in late April and initiating coal combustion in unit 1 for the first time on June 16. 29 contractors, both domestic and international, are working concurrently on the construction site, completing a succession of critical tasks to support coal burning”.

Mr Dang Hoang An, Deputy Minister of Industry and Trade, underlined the idea of handling weak backlog projects is to maintain flexibility and adaptability for each project. Particular attention must be paid to Prime Minister Pham Minh Chinh's guidance; every project that can be completed must be completed while adhering to reality and the legal framework; anything entangled, or going beyond the framework, should be submitted to the National Assembly. This is a critical basis for the proper disassembly and subsequent management of projects. 

Mr Ho Sy Hung stated that the Steering Committee will meet with businesses to re-evaluate the project's status, assess backlog issues and reasons, and determine what businesses require. Any assistance with processes and rules, including trust... to ensure the survival of businesses. Simultaneously, establish a path for empowering firms to be autonomous and self-reliant.

At this point, the solution for projects that require additional funding will be to assign firms to aggressively seek out financing sources to shape initiatives that continue to face numerous obstacles. Corporations and organizations must adhere to fundamental principles, and take the initiative in developing production and commercial plans, goods, and the ability to reorganize these initiatives. Throughout the process, contacts between state management agencies and businesses will occur. 

With regards to the EPC contract issues, Mr Ho Si Hung stated that if there is no disagreement on the EPC contract, the message would be transmitted via the arbitration system. Simultaneously, allowing businesses to divest and reorganize their investments, etc.

Mr Phan Duc Hieu stated that it is critical to be decisive and aggressive with the remaining projects. Must agree on fundamental concepts, specify the rights and obligations of associated parties, and be enacted into law. Simultaneously, the following set of regulations must include a system that enables the individual executing the work to feel secure while performing it.

Dr Nguyen Si Dung concluded that the Prime Minister's methodology is critical in steering the process of dealing with weak projects. That is to say, it is to be done. Once a significant problem is detected, it must be addressed immediately. Thai Binh 2 Thermal Power Plant's rebirth is an example of when the Prime Minister appoints a Deputy Prime Minister to oversee the project. 

Nguyen Duong