At a meeting with the Supervisory Delegation of the National Assembly Representative Delegation of Dong Nai province, Sonadezi pointed out many difficulties and obstacles in divestment, project bidding, site clearance as well as proposed solutions.

On August 2, 2022, the delegation led by Deputy Secretary of the Provincial Party Committee, Head of the National Assembly representative delegation of Dong Nai province Quan Minh Cuong had a meeting at the Industrial Park Development Corporation (Sonadezi) on business activities and the preservation and development of capital of state-owned companies in the 2019-2021 period.

Working session of the Supervisory Delegation at Sonadezi

At the monitoring session, the members of the Supervisory Delegation were interested and had opinions on the management and use of capital and assets; the investment and divestment of state-owned capital from Sonadezi and divestment of the Corporation’s capital from enterprises; project investment activities; Sonadezi’s development strategy, and so on.

Equity increased by 20% in the 3 years of Covid

Sonadezi was equitized and officially started operating as a joint stock company on February 1, 2016 with a charter capital of VND 3,765 billion. Sonadezi is currently investing in 6 subsidiaries, 11 affiliates and 5 financial investments with a total investment value of more than VND 3,200 billion as of December 31, 2021.

Sonadezi Chairwoman Do Thi Thu Hang reported on the Corporation’s operation

Currently, Sonadezi and its subsidiaries have been investing in building 11 industrial parks (IZs) with an area of more than 4,500ha as well as dozens of residential and urban areas with an area of up to hundreds of hectares, and service projects.

In the past 3 years, despite the huge impacts of Covid, Sonadezi continued to maintain growth, preserve and develop state-owned capital, make full payments to the State budget. The Corporation’s financial position is healthy with the ratios of equity, total assets, profit after tax and dividend payout ratio all increasing in over the years.

In the 2019-2021 period, Sonadezi’s equity increased from VND 7,730 billion to VND 9,275 billion (up 20%), total assets increased from VND 18,300 billion to nearly VND 22,000 billion (up 20.2%) ), profit after tax increased from VND 1,171 billion to VND 1,497 billion (up 27.8%) and ROE increased from 17.08% to 19.58%.

In the 2019-2021 period, Sonadezi’s equity increased from VND 7,730 billion to VND 9,275 billion (up 20%), total assets increased from VND 18,300 billion to nearly VND 22,000 billion (up 20.2%) ), profit after tax increased from VND 1,171 billion to VND 1,497 billion (up 27.8%) and ROE increased from 17.08% to 19.58%.

Difficulties and problems prolonged for years

In the report to the Supervisory Delegation, Sonadezi Chairman Do Thi Thu Hang raised many difficulties and problems facing the Corporation. Among those, she highlighted the difficulties and obstacles in activities such as compensation and site clearance for project implementation; Valuation of land use rights in enterprise value for divestment of state-owned capital. These issues have lasted many years, greatly affecting Sonadezi’s performance.

Hang also shared about Sonadezi’s difficulties in developing new projects due to inadequacies in land use right and project bidding procedures; increasing compensation costs and land prices. In some case, changes in legal regulations also affect the Corporation’s ongoing projects.

Mr. Tran Thanh Hai – Sonadezi’s CEO reported some difficulties and problems of Sonadezi

In addition, the leaders of Sonadezi and its subsidiaries raised many obstacles in the process of implementing investment procedures and implementing projects. Such obstacles lead to delay, unsatisfactory investment efficiency, and failure to create a driving force for growth. At the same time, issues were also mentioned when it came to repricing land rental unit price, retrospective collection of land rent, inconsistent and unpractical instructions from the various authorities, and so on.

Ms. Luong Minh Hien – Deputy Sonadezi’s CEO proposed the removal of difficulties in land rental unit prices

Quoting the difficulties and obstacles in their practical operations, Sonadezi and its subsidiaries have proposed to the National Assembly, the Government, ministries and central branches new policies that need to be promulgated the existing ones that need to adjusted to suit the current situation.

Sonadezi, among other things, proposed to inherit the rights, obligations and land in Bien Hoa 1 Industrial Park after equitization in accordance with the law. Sonadezi also proposed the review of the regulations on profit distribution to better reflect each development stage of enterprises. It proposed the Ministry of Finance consider formulating and promulgating specific criteria for the exclusion of factors affecting production and business activities of enterprises when evaluating performance and classifying enterprises. Another proposal, at the same time, is about reviewing the regulations on the time for declaration and payment to the state budget of dividends paid by joint-stock company for the relevant state-owned capital.

Regarding the development of new projects, in order to ensure time and price confidentiality when participating in the auction for land use rights and project bidding, Sonadezi proposed the Dong Nai Provincial People’s Committee issue regulations with specific provisions on the order and time frame for reviewing and giving opinions when requested by the representative of the state-owned capital in the Corporation. At the same time, a mechanism of decentralization and delegation of power is to be considered for the representative of the state-owned capital in Sonadezi to decide to participate in project auctions and bidding to improve flexibility in the implementation process.

Quickly remove difficulties to enable enterprises’ growth

Discussing the difficulties facing Sonadezi and its subsidiaries and their proposals, Vice Chairwoman of Dong Nai Provincial People’s Committee Nguyen Thi Hoang said that the Provincial People’s Committee always creates favorable conditions for businesses to develop. It regularly holds meetings with Sonadezi and instructs departments and agencies to support by removing difficulties and obstacles for enterprises.

Mrs. Nguyen Thi Hoang – Vice Chairwoman of Dong Nai People’s Committee spoke at the monitoring session

“Many of Sonadezi’s proposals today are related to the overlap between laws and decrees and the overlap between laws themselves. The Provincial People’s Committee requested the Supervisory Delegation to note and continue to make recommendations to the National Assembly, the Government and relevant ministries and central agencies to help businesses overcome difficulties, “ said Mrs. Hoang.

Regarding Sonadezi’s recommendations to the People’s Committee of Dong Nai Province about the land rent of Bien Hoa 1 Industrial Park, Mrs. Hoang said that the Provincial People’s Committee had proposed to the Government many times and requested the Department of Finance continue to submit a proposal for solution. Regarding difficulties in developing new projects related to bidding procedures, investor selection, and auctions under the Investment Law, the Provincial People’s Committee assigned the Department of Finance to review regulations and review regulations on coordination at the request of Sonadezi. Regarding Sonadezi’s difficulties and outstanding issues in compensation and site clearance, the Provincial People’s Committee has and will continue to instruct departments and localities to support Sonadezi.

Speaking at the conclusion of the monitoring session, Mr. Quan Minh Cuong, Deputy Secretary of the Provincial Party Committee, Head of the National Assembly Representative Delegation of Dong Nai province highly appreciated the performance of Sonadezi over the past 32 years. Sonadezi has made many contributions to Dong Nai, especially in the development of industrial park infrastructure, thereby creating locations and technical infrastructure foundation for investors to manufacture in industrial parks, creating a great source of revenue for the state budget as well as hundreds of thousands of jobs for workers.

Mr. Quan Minh Cuong – Deputy Secretary of the Provincial Party Committee, Head of the National Assembly Representative Delegation of Dong Nai Province delivered an instructional speech

“Sonadezi has done a good job of preserving and developing capital. However, in order to develop quickly and firmly in the coming time, Sonadezi needs a long-term development strategy to exploit the advantages of transport infrastructure and Long Thanh International Airport which, after being completed and put into operation, will be a very large traffic, economic, social and cultural exchange and connection point of the whole country and the Asian region . Besides, Sonadezi is requested to promote its strengths in industrial park infrastructure and maintain solidarity for further development. In the process of equitization and divestment, Sonadezi must comply with the provisions of the law and preserve capital,” emphasized Mr. Quan Minh Cuong.

Regarding the problems and recommendations raised by Sonadezi, Mr. Quan Minh Cuong asked the relevant authorities to systematically review whether these problems originate from the law, mechanism, perception or any other reason that may be ascribed to the authority or Sonadezi itself. The National Assembly Representative Delegation of Dong Nai province fully acknowledged the outstanding issues, problems and proposals of Sonadezi and will request relevant departments and agencies to explain, implement and report on the resolution results. At the same time, the Supervisory Delegation will summarize and report to the National Assembly, the Standing Provincial Party Committee, the Provincial People’s Committee and the People’s Council of Dong Nai Province to obtain instructions and directions on resolving such issues, especially those relating to compensation, site clearance, land rent prices, and so on.

Kim Hue