WORLDBANK on Vietnam - Vietnam uses over 739tr dong for public investment in 2006-2010 period
The World Bank (WB), Ministry of Planning and Investment (MPI), and Asian Development Institute on September 8 and 9 have jointly held an international seminar on strengthening public investment management, and enhancing the effectiveness of public investment. Participants also shared their experiences in mapping out strategies that could help countries improve public investment management.
According to MPI, around 286 trillion dong was used for public investment during the 2001-2005 period, accounting for over 23 percent of the total social investment. For 2006-2010 period, the figure is estimated at over 739 trillion dong, accounting for 24 percent of the total social investment. The proportion figure is expected to remain the same in the period of 2010-2015.
The state capital for public projects and programmes holds a large proportion. Hence, it is very important and necessary to manage and use this source effectively. Therefore, Vietnamese government should have suitable measures and policies to use the national capital source more efficiently.
Martine Rama, Acting director of the WB's East Asia Development Department said Vietnam is one of the countries having high public investment proportion, nearly 40 percent of the total GDP.
However, Martin also pointed out Vietnam's shortcomings in public investment management, such as insufficient attention to regional development in the overall investment plan; no strategic environment assessment to make key selections (e.g. mining sector); decentralisation leading to overlapping and ineffectiveness; disconnected relation between state capital and current budgetary expenditure; and overlapping among related laws such as State Budget Law, Construction Law and Bidding Law, etc.
Sharing Korean's reform experiences, Jay-Hyung Kim, Managing director of Public and Private Infrastructure Investment Management Centre, Korea Development Institute completely agreed with Vietnamese government's direction to follow the general trend. He added that the project appraisal would be better if it is decentralised to localities.
Director of MPI's Foreign Economic Relation Department Ho Quang Minh said, in order to promote the effectiveness of public investment in the future, Vietnamese government would focus on perfecting the guides on public investment management, especially investment from the state budget. Moreover, the government would also focus on improving the policies and mechanisms for the project consultation, supervision and management to be more transparent; specifically defining responsibilities of each area and each level; strengthening the inspection and supervision activities, correcting the ineffective projects and the investments not included in the overall planning, and overcoming losses and corruptions.
In addition, Vietnam would comprehensively carry out the measures such as assigning investment decision makers and investors to bear more responsibility, and accelerating the implementation of project constructions, etc. vietplus
FINANCING - PetroVietnam, foreign banks sign derivatives deals
State oil and gas group PetroVietnam has signed agreements with three foreign banks to help limit risks when it conducts derivatives transactions, the Vietnamese government said on Thursday.
PetroVietnam signed the International Swap and Derivatives Association Master Agreement with BNP Paribas (BNPP.PA), Sumitomo Mitsui Banking Corporation (8316.T) and Standard Chartered Plc (STAN.L) on Thursday, the government said in a statement.
The deal would help PetroVietnam "balance and limit changes, prevent risks of interest rates, exchange rates and prices of goods, and diversify the group's financial activities", the statement said.
It quoted PetroVietnam deputy Chief Executive Nguyen Tien Dung as saying the group would have high funding requirements in due course, and using derivatives transactions would help mitigate associated risks.
Dung did not detail upcoming investments, but PetroVietnam has been seeking funding for the construction of several major projects, including two oil refineries, after Vietnam's first such facility started running at full capacity earlier this year.
CAPITALISATION - SBV to review capital rules
The State Bank of Vietnam will review new strict capital adequacy requirements imposed on commercial banks by Circular No 13, following an outcry from the banking sector and a directive from the government.
The announcement late Wednesday helped boost shares on the nation's stock market yesterday.
The review and analysis of Circular No 13 would aim to address shortcomings in various risk management provisons, including the imposition of stricter capital adequacy ratios, the State Bank said.
A deadline for conclusion of the review was not disclosed. However, last month, prime minister Nguyen Tan Dung ordered the State Bank to review the circular and report its findings and possible solutions before the new regulations were scheduled to take effect on October 1.
Circular No 13 would require commercial banks to increase their capital adequacy ratios from 8 to 9 percent, as well as impose other risk management measures.
For instance, the circular would restrict banks from lending out funds from non-term deposits made by the State or State entities, the social insurance fund or commercial lending organisations.
According to media reports, many commercial banks and the Vietnam Banking Association complained that this last provision would require commercial banks to leave idle as much as 35 percent of deposited funds. They urged the central bank to extend the deadline for complying with the circular in order to give banks more time to restructure investment portfolios.
Fiachra Mac Cana, managing director of the research department of HCM Securities Co, predicted that the review would not result in any significant changes to the requirements but would allow banks more time to comply and adjust loan and capital ratios.
A central bank official who asked to remain unnamed told Vietnam News yesterday that Circular No 13 was indeed the opening salvo of what would be an ongoing programme of stricter risk management measures to be imposed on the nation's banking system.
Many economists, the official noted, have complained that the capital adequacy ratios in Circular No 13 were still too low to adequately guard against risk. The newly passed Law on Credit Institutions to take effect in January includes provisions stricter than those in Circular No 13, he noted, but still short of the Basel standards for finance and banking.VNNEWS
RENEWABLE ENERGIES - Finland wants to develop clean technologies in Vietnam
A delegation representing 15 Finnish enterprises said here on Tuesday they wanted to look for local partners to develop renewable energy, wastewater treatment, industrial waste management and other environmental technologies.
Some of the Finnish companies introduced their clean technologies at a seminar held here on Tuesday were Neste Oil Corporation, Cargotec, GD Power, Kemira, Fincumet, YIT and Outotec.
"We identify Vietnam as a key market in Southeast Asia and want to have direct partners in developing our innovative clean technologies to address Vietnam's energy and environmental challenges," said Santtu Hulkkonen, executive director of Cleantech Finland who represented the Finnish delegation.
He told the seminar that the clean-tech sector in Finland included some 2,000 enterprises operating in energy efficiency, clean industrial processes, renewable energy, and waste management and treatment.
Janne Mielck, vice president of the New Ventures of the Neste Oil Corporation, told the Daily on the sidelines of the seminar that his corporation was seeking suppliers from Vietnam for producing environmentally friendly diesel.
Neste Oil is a refining and marketing corporation specialising in low-emission technologies, especially high-quality oil products for vehicles.
"By the end of this year, we will open a plant producing renewable diesels in Singapore with an annual capacity of 800,000 tonnes, so we are here to seek partners for supplying raw materials such as vegetable oil and non-edible oil for our plant in Singapore," said Janne Mielck. He added his company expected to buy some 100,000 tonnes per year from Vietnam.
Huynh Kim Tuoc, director of the HCM City Energy Conservation Centre, told the seminar that "Vietnam targets renewable energy to account for 7 percent of the total energy supply by 2020 and up to 11 percent by 2050 compared to less than 3 percent now."
"While the hydropower source as an important renewable energy of the country has been fully tapped, Vietnam should urgently exploit other renewable sources such as wind power, solar power, and other bio-fuels," he said.
Tuoc added that Finnish enterprises with good technologies could definitely find a lot of opportunities to develop projects of solar energy around the country.
Besides, Tuoc also encouraged Finnish enterprises to invest in wind power projects, including the manufacturing of equipment for wind power plants.
According to the city's energy conservation centre, it has become very urgent for Vietnam to develop renewable energy as power shortage is a big worry for all economic sectors.SGTD
POWER - Construction on Bac Lieu wind power plant starts
Cong Ly Construction, Trading and Tourism Co Ltd has officially started construction works on a wind power plant in Bac Lieu province yesterday Sep 9, 2010.
The plant is situated in an area of about 500 hectares in NHa Mat Ward, Vinh Trach Dong Dist, Bac Lieu province, near Vinh Chau Dist, Soc Trang province. With designed capacity of 99 MW, Bac Lieu wind power plant project has been included in the general power development plan for 2006-2015 period.
The total investment capital to build this power plant is estimated at about 5 trillion dong.TBKT
Korean group wishes to invest in thermo power plant in Vietnam
Early this week, Lee Daebong, chair of the South Korea-based Charmvit Group revealed that his group was planning to invest in a thermo power plant in Vietnam. "We were waiting for adjustment in power selling mechanism from Vietnam's ministry of industry and trade that allows the power generators to adjust the sales price for distributors in case there are changes in retail prices", he added.
Charmvit Group plans to cooperate with the largest power generator in South Korea to carry out thermo power plant in Vietnam, if the project's feasibility is ensured. Lee Dae-bong refused to release any information relating to the planned thermo power station, but affirmed that the mechanism about adjusting the wholesales price would play a key role for realising the project.
Oliver Massmann
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