By Ho Binh Minh

HANOI, April 23 (Reuters) - Vietnam is privatising businesses ranging from banks to energy and telecoms firms into a booming stock market, but a plan for the first flotation of shares in a state hospital is deadlocked.

Social organisations have objected to the plan to partially privatise one Ho Chi Minh City hospital on a trial basis, even though the state would still hold a majority stake of 60 percent.

"The trial privatisation is too early and inappropriate," Le Hieu Dang, a senior official in the city's Fatherland Front umbrella organisation of the ruling Communist Party was quoted as saying in Liberation Saigon newspaper in April.

Reports in other state-run media said health officials are also concerned that a partly private hospital would raise treatment fees that poor people could not afford.

The city is Vietnam's largest, with 8 million people, and income disparities are widening, a concern for the government, which has opened the economy to market forces to boost development and reduce poverty.

Vietnam's state-run health care system and hospitals are straining to treat a populace vulnerable to a wide variety of infectious and non-infectious diseases.

The middle class that has emerged in the booming economy use internationally-operated clinics or go to Singapore for treatment of serious illnesses if they can afford it.

The health sector's value accounted for just 1.45 percent of Vietnam's gross domestic product of $60 billion in 2006, down from 1.48 percent in 2005, government figures show.

Health care is not listed as an area where the state is mandated to fully own facilities such as clinics and hospitals.

RESTRUCTURING

The Health Ministry and the city government picked Binh Dan Hospital, valued at 90 billion dong ($5.6 million), for the restructuring.

According to the plan, after selling 20 percent of shares to outsiders and 20 percent more to employees, the state would still own 60 percent in the hospital.

Binh Dan officials did not respond to a Reuters inquiry.

"The target is to raise funds to invest in treatment activity and ease the problem of patient overloads," Nguyen Thieng Duc, deputy head of the committee overseeing the process, was quoted by the city's Law newspaper as saying.

But the Fatherland Front chapter's deputy chairman Dang rejected the plan.

At a public meeting this month, intellectuals and social organisations objected to privatising hospitals and schools. All schools and universities are state-run.

One lawyer was quoted as saying at the meeting that major private investors would drive hospitals and schools toward profits, which could affect educational and health goals for all 84 million Vietnamese.

Hospital director Dr Nguyen Chi Hung said in an interview with Tuoi Tre (Youth) newspaper this month that Binh Dan would strive to support poor patients after any IPO.

Just three of the 107 companies listed on the Ho Chi Minh City stock market <.VNI> are in the health sector, Hau Giang Pharmaceutical Co. <DHG.HM>, Domesco Medical Import and Export Co. <DMC.HM> and Imexpharm Pharmaceutical Co. <IMP.HM>.

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