Minister wants $10.7 bln to modernize his agency

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Báo Tuổi Trẻ English - 30 month(s) ago 1 readings

Minister wants $10.7 bln to modernize his agency

The Vietnamese Ministry of Transport will need some VND223 trillion ($10.7 billion) for a proposed industrialization and modernization scheme.

highway A section of National Highway 1A that runs through Binh Tan District, HCMC Photo: Tuoi Tre

Accordingly, the scheme, which has been given the green light by Minister of Transport Dinh La Thang , will be carried out from now to 2020 with a vision for the next decade.

The scheme will also be applied to member companies and related agencies under the management of the ministry.

The investment portfolio under the project includes 12 groups, from building new head offices and setting up information technology (IT) infrastructure facilities, to purchasing equipment, developing fleet of ships and aircraft and training human resources.

One of the first projects in the portfolio is the building/maintenance/upgrade of head offices for the member companies and subsidiaries under the management of the ministry.

The cost for this aspect of the plan is estimated at some VND12.17 trillion. Most of these projects are supposed to be carried out within the 2012-2015 period.

In particular, the capital to be spent for the construction of the offices for the ministry will be VND1 trillion, while that for other departments and bureaus will be some VND4.8 trillion.

Apart from that, the program of developing the IT infrastructure facilities for enterprise management and administration purposes will cost VND505 billion until 2030.

The largest fund of VND100 trillion will be set aside for developing the fleet for Vietnam Maritime Corp (Vinalines) meant to serve the nation’s industrialization and modernization process.

According to the scheme, Vinalines plans to spend VND30 trillion to purchase an additional 67 ships, including 48 cargo carriers, 14 container carriers and five oil tankers with a designed loading capacity of at least 15 million tons from now to 2015.

The scheme doesn’t mention the feasibility and economic effectiveness of developing such a fleet, especially in the current context of the maritime industry facing problems due to money loss, and many private enterprises having to sell their ships for debt payment.

In the 2016 to 2020 period, an additional VND70 trillion will be spent to buy another 95 ships, including 50 cargo carriers, 25 container ships and 20 oil tankers.

The second largest spending amount will be some VND80.1 trillion on developing an aircraft fleet for Vietnam Airlines , of which VND43.84 trillion will be spent for 2012-2015 period and VND36.245 trillion in the following five years.

If all goes according to plan, by 2020 Vietnam Airlines will have 171 aircraft, of which 70 units will be directly owned by the corporation, while the rest will be leased.

The scheme also clarified the list of aircraft that Vietnam Airlines may own or lease, including the Boeing 787-9, Boeing 777, Airbus A350, A321 and A320, ATR72-200 and Fokker 70.
Similar to the maritime sector, the scheme mentions nothing about the market factors and economic effectiveness that may impact the investment program.

Up to VND15.38 trillion will be disbursed for the group of public enterprises, mainly for the three firms of the Vietnam Air Traffic Management Corp, Northern Vietnam Maritime Safety Corp and Southern Vietnam Maritime Safety Corp.

As for capital sources, the ministry has suggested that the state treasury provide funds worth VND20 trillion for software program investment and IT infrastructure development to serve management work and building the head offices for the state management agencies and other public services.

The remaining capital will be raised from the enterprises’ ownership capital, loans, and ODA funds, and from society.

In addition, the ministry also suggested that the government should support preferential loans and create favorable tax mechanisms, as well as provide manpower, to realize the aforementioned scheme of industrialization and modernization.

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