The Co Chien River Embankment Repair Project (section belonging to Ward 1, Vinh Long City) has just been “named” by the Inspectorate of the Ministry of Finance with many errors in the process of planning, arranging and disbursing capital. If not urgently remedied, this important project is at risk of being behind schedule, affecting the goal of preventing riverbank erosion and ensuring safety for the surrounding area.
Insufficient capital, project difficult to finish
According to the inspection conclusion, the total investment of the Co Chien River Embankment Repair Project is VND 593,288 billion (Decision No. 2610/QD-UBND dated November 20, 2023 of the People's Committee of Vinh Long province). Of which, VND 500 billion is from the central budget reserve in 2023, VND 40 billion is from the local budget, VND 25 billion is from the budget for using public irrigation products and services and other sources.
However, at the time of the inspection (November 2024), the Inspectorate of the Ministry of Finance said that Vinh Long province had not yet allocated enough local budget capital to complete the project on schedule. Currently, the project is still short of about VND 53,288 billion compared to the total approved investment. This shortfall leads to a low disbursement rate, hindering the project's progress.
Procedures and disbursement still have many problems
According to the inspection conclusion, despite being allocated 500 billion VND from the central budget, the project still faces difficulties due to a number of reasons. First of all, this is a newly started project, requiring completion of many different investment procedures. The dossier on the list of capital allocation from the central budget reserve will only be officially approved in September 2023 and the project will not be eligible to start construction until February 2024.
The site clearance work in the center of Vinh Long City is also quite complicated. The survey, compensation and resettlement plan requires a lot of time, making it impossible to hand over the construction site on schedule. In addition, some adjustments in tax rates (from 10% to 8% according to the VAT reduction policy) also cause a difference in contract value, requiring additional documents to match the correct data.
Errors in establishing and approving total investment
According to the Inspection Conclusion, the process of establishing and approving the total investment at the Co Chien River Embankment Repair Project resulted in many inappropriate expenses, increasing the investment value compared to actual needs.
Some items such as the cost of underwater acceptance inspection, the cost of technical infrastructure (electricity, water) and the cost of planting trees were set at a higher level or were over-calculated. In many cases, each of these items was added about 1 billion VND compared to the norm.
Not only that, the determination of construction volume in items such as drainage culverts or An Binh ferry terminal is still inaccurate, causing the estimated value to exceed the actual scale of the project. The inspection agency believes that this could increase the value of the contract signed with the contractor to an unnecessary level, leading to the risk of loss of state budget.
Faced with the above situation, the Inspectorate of the Ministry of Finance requested the People's Committee of Vinh Long province and the Project Management Board to review and immediately deduct the excess expenses, and adjust the construction volume that does not match the reality. This move is to prevent the situation of unfounded project capital increase, avoid budget waste and ensure investment efficiency.
Inadequacies in construction contracts and compensation
The inspection conclusion also stated that some provisions in the construction contract No. 03/HD-BQLDANN&PTNT (signed on January 30, 2024) did not clearly state the scope of advance payment guarantee, recovery method and implementation time. Meanwhile, the approved compensation and resettlement support value was VND 205,688 billion, but the contract only stated VND 130 billion and had not been updated.
Similarly, the compensation contract signed with the Vinh Long City Land Fund Development Center lacks details on the progress of preparation, appraisal, compensation payment and site handover deadline. All these limitations may cause the project to take longer than expected.
Inspector requested urgent remedy
Faced with concerns that the project will continue to be delayed, the Inspectorate of the Ministry of Finance requested the People's Committee of Vinh Long province and the Project Management Board to:
Supplement the missing capital, combine with speeding up site clearance.
Review and adjust excess costs and update VAT policy if it falls within the period of reduction from 10% to 8%.
Add terms on advance payment guarantee, compensation value, and advance payment recovery period to the contract.
Determine the responsibilities of organizations and individuals involved in errors and send a report of results to the Ministry of Finance Inspectorate in the first quarter of 2025.
Based on the inspection results, the current conclusions point to technical and procedural errors, but do not confirm whether the project violates the law or not. However, if Vinh Long does not quickly handle the situation, the risk of delays and budget losses will increase.
The Inspectorate of the Ministry of Finance also requested units to determine responsibilities, review, and draw lessons from relevant collectives and individuals regarding the aforementioned shortcomings and limitations.
