Directive No. 22/2005/CT-TTg on building solutions to reduce input costs and enhance competitive capacity for air and maritime transportation enterprises

DIRECTIVE

On building solutions to reduce input costs and enhance

 the competitiveness of air and maritime transport enterprises

______________________

In recent years, despite many events occurring worldwide such as the September 11, 2001 incident in the United States and the SARS outbreak at the beginning of 2003 in many countries around the world, which affected the economy generally and the aviation and maritime sectors specifically, the operations of transport enterprises in these two sectors have maintained a steady growth rate year after year. Statistical figures show that enterprises in the aviation and maritime sectors have made efforts to maintain stable and profitable business operations. During the period from 2001 to 2004, Vietnamese air transport enterprises achieved an average annual growth rate of 9.7% for passengers and 18.7% for cargo and mail. The total number of ships in the marine transportation fleet increased from 336 units in 2000 to 1,007 units today, with the Vietnamese marine transportation fleet carrying over 36 million tons of goods in 2004, including 23.1 million tons of international shipping.

Achieving these notable results was primarily due to timely issuance by state management agencies of appropriate macro-management mechanisms and policies, creating favorable conditions and stimulating the development of aviation and maritime transport enterprises. Additionally, it was due to the enterprises' efforts to innovate and implement effective production and business plans through proactive measures. Enterprises boldly invested in modernizing equipment, technology, and facilities. The national fleet of aircraft and ships has been rejuvenated and expanded in quantity, effectively fulfilling its role as the main force in transportation. Transport enterprises actively explored and sought new markets and customers to increase their market share in transportation.

However, the operational results of aviation and maritime transport enterprises are not yet solid and are significantly influenced by external factors. Their competitive ability on the international market remains weak, with a low market share internationally, while the domestic market, although small, is fiercely competitive, especially for maritime transport enterprises. Furthermore, the attractiveness of airports and seaports for international activities is limited due to relatively high aviation and maritime fees compared to other countries in the region.

Vietnam has proactively integrated into the international community to leverage and utilize existing advantages in international trade, such as low labor costs, advantageous geographical location, and diverse climate. Aviation and maritime transport enterprises need to further strengthen their competitiveness in response to the demands and challenges of international and regional integration, contributing actively to international trade exchanges between Vietnam and other countries. In the short term, it is necessary to quickly find solutions to reduce input costs to enhance the competitiveness of aviation and maritime transport enterprises. The development of solutions and timelines to reduce input costs and enhance the competitiveness of aviation and maritime enterprises must closely follow the following contents:

a) Increase transportation productivity, reduce costs to lower prices while improving service and product quality.

b) Develop infrastructure, invest in modern equipment and facilities.

c) Enhance business management capabilities to compete with enterprises in the region and internationally; maintain the domestic transportation market.

d) Proactively integrate into the international community, ready to seize opportunities and adapt to changes when Vietnam joins international economic organizations.

đ) Prioritize the development of advanced science and technology, comprehensive training of human resources with modern knowledge and mastery of new scientific and technological techniques.

e) Promote administrative reform to create a favorable, transparent, and equal environment for enterprise operations.

To successfully implement the above contents, the Prime Minister instructs:

1. The Ministry of Transport:

a) Direct and create conditions for aviation and maritime transport enterprises to proactively build solutions to reduce input costs and enhance their competitiveness in accordance with the characteristics, business environment, financial conditions, and other resources of the enterprises.

b) Lead and coordinate with relevant ministries and sectors to develop and issue or submit to competent authorities for issuance of transparent mechanisms and policies to create favorable conditions for aviation and maritime transport enterprises to compete fairly and operate equally.

c) By the end of the fourth quarter of 2005, complete the restructuring plan for aviation and maritime transport enterprises and supporting services, and complete the restructuring in 2006 to ensure a fair competitive environment, thereby improving service quality and reducing costs.

d) Lead and coordinate with relevant ministries and sectors to accelerate administrative reform in the aviation and maritime sectors to facilitate market development, investment in modernization of means and equipment, and organizational stability for enterprises.

2. The Ministry of Planning and Investment:

a) Prioritize investment plans for upgrading infrastructure in the aviation and maritime sectors and purchasing modern means and equipment.

b) Actively seek and negotiate Official Development Assistance (ODA) sources to supplement investment and procurement by aviation and maritime sector enterprises.

c) Directly promote investment promotion and attract foreign investors to invest in priority areas of the aviation and maritime sectors.

3. Ministry of Finance:

a) Lead and coordinate with the Ministry of Transport and the Ministry of Commerce to consider and issue or submit to competent authorities for issuance of tax policies (especially import-export taxes, temporary import re-export, temporary export re-import of transportation means, spare parts, materials) as reasonably requested by enterprises and other policies aimed at encouraging the development of the national fleet of aircraft and ships.

b) Continue to implement the roadmap for reducing various types of prices, fees, and maritime and aviation charges towards eliminating distinctions between domestic and foreign entities as well as between international and domestic operations, ensuring that by the end of 2005, these will not be higher than the regional ASEAN average.

c) Direct the General Department of Customs to review and apply customs inspection procedures, ensuring simplicity, convenience, and speed, thereby facilitating the release and circulation of transportation means carrying goods.

4. The Ministry of Trade:

a) Take the lead and coordinate with the Ministry of Transport to study and issue or submit to competent authorities for issuance policies and procedures aimed at facilitating the activities of buying, leasing, renting, exchanging, importing, and exporting aircrafts, ships, equipment, materials, and spare parts, particularly those products not yet produced domestically.

b) Coordinate with the Ministry of Transport to provide and update market and price information on public media networks; organize extensive consultations on market conditions, prices, and related issues.

5. Vietnam Airlines Corporation, Vietnam Maritime Corporation:

a) Proactively develop and implement solutions to reduce input costs and enhance their enterprises' competitive capabilities in accordance with business characteristics, environment, financial situation, and other resources. These solutions must be developed comprehensively across investment, market, trade, product policy, science and technology, management organization, and human resource training aspects.

b) Accelerate the process of organizing operations according to the parent company-subcompany model as approved in projects, ensuring close and unified relationships between the corporation and its subsidiaries, thereby minimizing intermediary costs arising from unreasonable organizational structures. Strictly implement plans to restructure and equitize member enterprises.

c) Adhere strictly to laws and contribute opinions to relevant state agencies (through specialized associations if possible) regarding necessary amendments and supplements to current legal regulations.

d) Proactively seek and expand foreign markets and partners. Continuously improve technology and apply advanced technological progress in production and business activities. Effectively fulfill reporting and providing specialized information to relevant state agencies. business operations. Properly implement reporting and information provision systems for relevant state agencies.

The Ministry of Transport is responsible for monitoring and urging the implementation of this Directive; report to the Prime Minister on the progress, results, and difficulties encountered during implementation, and propose measures for resolution.

Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial People's Committees under the central government, Heads of agencies, organizations, and individuals concerned are responsible for enforcing this Directive.