Hanoi (VNS/VNA) - To improve thequality of public products and services, the Government in June 2015 issued adecision to transform public non-business organisations into joint-stockbusinesses.

This helped the State attract more privateinvestors to involve in producing public products and services, improvethe governance and quality of the units, and increase labour productivity andincome.

After four and a half years, the numberof successfully-transformed units has remained modest and there are manychallenges that need to be resolved.

Almost 340 public non-business units andorganisations have been enlisted for the transformation since June 2015. Of thetotal, 31 units have completed the process and 38 units have gained approvalfor their transition plans.

One of the units is the Transport Hospital,which became a joint-stock business in October 2015.

According to the Ministry of Finance, thetransformation plan has lagged behind schedule set for 2015-2020 period as thenumber of successfully-transformed units accounts for only 14.5 percent.

Some have not implemented the plan properlywhile others have delayed the transformation. In some provinces and districts,the post-transition business plans have remained inappropriate.

In addition, transformed units have not beenmanaged correctly and the quality of products and services dropped with some nolonger available.

To improve the transformation process, theMinistry of Finance is working on a new decree. According to Dang Quyet Tien, DeputyDirector of the Department of Enterprise Finance, the new decree is expected toresolve the issues public non-business units have encountered with theirtransformation.

Under the draft, a unit or an organisationthat wants to be transformed can be state and government agencies, units underministerial management, local authority departments and offices, schools,hospitals, sub-units of State-owned enterprises and State-owned limitedliability companies.

Nguyen Thi Le Thu of the National Institutefor Finance at the Ministry of Finance said to lure investors to targetedpublic non-business units, they should be productive and their products arewidely accepted and purchased.

Moreover, the products should be necessitiesand they should be accessible to a large part of the population.

A regulation is needed for those units toaddress their financial issues, property rights for assets and land areas, theState control and management, and policies towards employees in thepost-transition stage.

To assure the quality of products andservices provided in the post-transition stage, the State needs to issuestandards to supervise the production process and deal with violations.

The State has to control prices of someservices such as university fees, waste collection and management, and publictransport to make sure they are broadly affordable.

The transformation process needs to go intostages through which public non-business units are encouraged to fully takecontrol of their own finance and governance.

The State may either sell its ownershipentirely or issue shares to potential investors to increase the charter capitalof the unit.

Vu Hoang Quyen, World Bank senior economist,said the transformation must be assessed carefully and the Government needs tochoose the right sectors that are suitable for the transition.

“The State takes a big role in the managementof fundamental public services like healthcare and education. The list of unitsto-be-transformed must be developed upon the assessment of the Stateresponsibility in the post-transition units,” she said.

Other important factors include informationdisclosure and transparency, handling differences between the ceiling prices ofpublic services set by the Government and the prices provided by the privatised units,she added.

Quyen suggested the units are turned intoState-funded companies so they must get used to operating as a business,then they are totally privatised. In addition, the State must take control offinancial management in those businesses and its role must be legalised./.