Viet Nam: Strengthening Support for State-Owned Enterprise Reform and Corporate Governance Facilitation Program

Sovereign Project | 39538-036

Summary

The proposed TA will help MOF in strengthening the institutional process and the policy framework to sustain SOE reforms, and help it in preparing candidate SOEs to implement their individual restructuring plans, as each is different and unique from the other with regard to its mandate and business lines.

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Project Name Strengthening Support for State-Owned Enterprise Reform and Corporate Governance Facilitation Program
Project Number 39538-036
Country Viet Nam
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8387-VIE: Strengthening Support for State-Owned Enterprise Reform and Corporate Governance Facilitation Program
Technical Assistance Special Fund US$ 800,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector Public sector management - Economic affairs management
Gender Equity and Mainstreaming
Description The proposed TA will help MOF in strengthening the institutional process and the policy framework to sustain SOE reforms, and help it in preparing candidate SOEs to implement their individual restructuring plans, as each is different and unique from the other with regard to its mandate and business lines.
Project Rationale and Linkage to Country/Regional Strategy SOE reform is an inherently complex process, requiring holistic financial and corporate restructuring. First, this is a novel approach for Viet Nam, formulated with the help of the ADB MFF project. Such expertise is not available within SOEs and MOF, and it takes external support to carry out the due diligence process and in the process strengthening if required, of already developed restructuring plans. Second, MOF has developed (in consultation with ADB) a set of criteria for shortlisting selected SOEs for restructuring support under the MFF's PFR2 and PFR3, which will enable MOF to assess and rank candidates with the highest potential to meet the reform objective. Selection criteria were discussed by MOF in a workshop with all relevant stakeholders and disseminated through the MOF website. Selected SOEs will be considered for participation in the second phase of the project and will undergo rigorous due diligence by the MOF team, given that the loan is guaranteed by the government. ADB is committed to supporting capacity development of MOF, and in turn of the SOEs, in this process. Third, PFR1 implementation has underscored the need for sustained technical support to participating SOEs, and also the lack of required technical capacity at MOF. MOF has been assigned by the government to take the lead in the development and implementation of an SOE restructuring program, which takes into account and builds on lessons and experience gained from the implementation of the pilot restructurings under the MFF.
Impact Improved profitability of restructured SOEs and management of state managed investments.
Project Outcome
Description of Outcome Improved capacity of MOF to ensure that selected SOEs are transformed into financially viable and efficiently managed enterprises.
Progress Toward Outcome In progress
Implementation Progress
Description of Project Outputs

1. Support MOF in conducting due diligence of selected SOEs

2. Finalizing the restructuring and implementation plans of selected SOEs

3. Developing Knowledge products for future SOE reforms in Vietnam

Status of Implementation Progress (Outputs, Activities, and Issues) The TA is under implementation since May 2014. Consultants both individual and firm have been engaged under the project. Their tasks include assisting MOF in monitoring the implementation of SOE reform. Specifically for the consulting firm, it is tasked to undertake due diligence on the SOEs participating in the next project (PFR3) under the MFF program. Due diligence is on going. Project team monitors project implementation progress through review missions and communication with the EA.
Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design Consultations were held with Ministry of Finance, State Owned Enterprises and relevant stakeholders on the methodology and approach to short-list and selct State Owned Enterprises for particpation in the SOE refrom program supported by ADB.
During Project Implementation TA is now effective. The recruitment of the consulting firm has been concluded in Manila on 18 March 2014. The consulting firm will undertake the tasks under the TA and will commence its services by mid May 2014.
Business Opportunities
Consulting Services

1. International Consultants

a. State-Owned Enterprise Reform and Corporate Governance Specialist Team Leader (international, 5 person-months, intermittent)

b. Corporate Restructuring Specialist (international, 4.5 person-months, intermittent)

c. Financial Restructuring Specialist (international, 4.5 person-months, intermittent)

d. SOE Legal and Regulatory Expert (international, 2 person-months, intermittent)

e. Social Safeguard Specialist (international, 2.5 person-months, intermittent)

2. National Consultants

a. SOE Reform and Corporate Restructuring Specialist (national, 12 person-months, intermittent)

b. Financial Specialist (national, 12 person-months, intermittent)

c. SOE Legal and Regulatory Expert (national, 6 person-months, intermittent)

d. Poverty and Social Development Specialist (national, 3 person-months, intermittent)

e. Gender Specialist (national, 2 person-months, intermittent)

f. Social Safeguard Specialist (national, 2.5 person-months, intermittent)

g. Translator and Editor (national, 5 person-months, intermittent)

Responsible ADB Officer Prasanna Kumar Jena
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SERD
Executing Agencies
Ministry of Finance28 Tran Hung Dao
Ha Noi, Viet Nam
Timetable
Concept Clearance 26 Apr 2013
Fact Finding 02 May 2013 to 09 May 2013
MRM -
Approval 19 Jun 2013
Last Review Mission -
Last PDS Update 11 Sep 2014

TA 8387-VIE

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
19 Jun 2013 13 Feb 2014 13 Feb 2014 31 Dec 2014 30 Sep 2015 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
800,000.00 0.00 100,000.00 0.00 0.00 0.00 900,000.00 19 Jun 2013 419,599.17

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