The Prime Minister approved the scheme on experimentally converting the organization and operation of Southern Waterway Transport Corporation of the Communications and Transport Ministry after the model of parent company-affiliate company.

The objectives are to experimentally renew the organization and management, changing the administrative association between the Corporation and its independent cost-accounting member enterprises into the mechanism of financial investment; to create a close linkage, clearly determining rights and responsibilities regarding capital and financial interests among enterprises having the legal person status; to better provide information, marketing, consumption, supply, research and training services to member enterprises; to create conditions for enterprises to raise their production capacity, business efficiency and competitiveness.

The parent company shall be formed on the basis of reorganizing Southern Waterway Transport Company, Thu Duc port, Southern Waterway Transport Import-Export Company and the Corporation’s office. The parent company is a State enterprise, which directly carries out production and business activities, invests capital in affiliate companies and has to preserve and develop the State capital at the company as well as its capital invested in affiliate companies.

Affiliate companies comprise joint-stock companies and limited-liability companies with two members or more where the parent company holds dominant shares or owns dominant capital. The affiliate companies shall have the legal person status as well as their own assets, names and managerial apparatus, have to take civil liability within the value of their assets, and be organized and operate according to law provisions relevant to their legal forms.- (Summary)