Auditors announce thousands of billions of dong in violations in BT and BOT projects

According to the audit results of build-transfer contract projects; build-operate-transfer projects (BT, BOT projects), in localities that have just been sent by the State Audit to the National Assembly, most of the projects have designated investors; there are projects that designated investors after the project implementation. The projects are mainly proposed by investors and included in the investment portfolio, for example, Bac Ninh has up to 72/83 projects proposed by investors.

According to audit results, most investment projects in the form of BT and BOT showed many serious violations, potentially causing budget losses and people having to pay high fees.

BOT project established without approval

The audit results of 9 BOT projects in 2019 showed that: The Ministry of Transport allowed the establishment of BOT projects before the Government approved the project policy, did not carry out the process of establishing, approving and announcing the list of BOT projects, approved the project before having the Environmental Impact Assessment Report; did not announce the list of projects, did not organize open bidding to select investors and most of them appointed construction contractors.

The audit results also required a reduction in the toll collection period for 7/9 projects by 6.4 years compared to the original plan, of which the Hoa Trung bridge project was reduced by 15.8 years; the Cha La bridge project was reduced by 13.9 years; the coastal road construction investment project through Hai Phong and 9 km in Thai Binh province was reduced by 1 year; the construction investment project and upgrading and expanding 4 sections of National Highway 60 connecting Rach Mieu bridge to Co Chien bridge in Ben Tre province was reduced by 7 years.

The Trung Luong - My Thuan Expressway Project Phase 1 under the BOT form (2nd audit) has discovered many violations and large capital increases.

Investment project to build and upgrade the Saigon River channel from Binh Loi railway bridge to Ben Suc port in 7.5 years; BOT project to renovate and upgrade National Highway 1A through An Suong - An Lacreduced by 6.3 years; investment project to build Ninh Hoa town section and renovate National Highway 26, Khanh Hoa province reduced by 4.9 years.

BOT projects were also incorrectly identified to increase the total investment, specifically including the investment project to build a coastal road section through Hai Phong city and 9 km in Thai Binh province under the form of public-private partnership of 45.4 billion VND, Trung Luong - My Thuan Expressway ProjectPhase 1 under BOT form (2nd audit) 61.9 billion VND,...

In addition, there are projects that have implemented some packages before selecting contractors; the investor's credit arrangement has not ensured the provisions of the BOT contract or has not ensured the project implementation progress; the contribution of equity capital is slow, and the determination of repair and maintenance costs in the Financial Plan does not have sufficient basis and legal basis.

The audit also pointed out that many projects had errors in design and estimates; implementation progress was slower than planned; acceptance and payment were still incorrect; and final settlement approval was delayed according to the provisions of the BOT contract.

The State Audit pointed out that most units still made mistakes in accounting and declaring obligations to the State budget, so through the audit, they had to adjust assets, capital sources, revenue, expenses and recommend increasing State budget revenue by an additional VND 1,976.07 billion.

Proposed handling of 925 billion VND, of which 288.3 billion VND is recovered and reduced payment, 618 billion VND is handled otherwise, 19,428 billion VND is collected and recovered taxes. Including projects with large handling ratios; reducing the time for collecting capital recovery fees of 7/9 projects by 56.4 years compared to the original plan.

More than 5,000 billion errors in BT projects must be handled

As a result of auditing 29 BT projects in localities, the State Audit also discovered many errors.

The State Audit discovered that in Bac Ninh province, 72 out of 83 projects proposed by investors had violations and large losses of money.

Most projects appoint investors; some projects appoint investors after the project has been implemented. Projects are mainly proposed by investors and included in the investment portfolio, such as Bac Ninh with 72/83 projects proposed by investors.

The State Audit discovered that in Hanoi, most projects determined the initial total investment much larger than the actual implemented value.

Specifically, the project to build a road from Ngoc Thuy dike to Thuong Thanh new urban area, Long Bien district, reduced its estimate by 69 billion VND, and the cost of compensation for site clearance decreased by 754 billion VND; and the project to build a 2.5-meter road from Dam Hong to National Highway 1A reduced by 251 billion VND.

This route is about 3.8 km long, 40 m wide, passing through Ngoc Thuy, Duc Giang and Thuong Thanh wards, Long Bien district (Hanoi) and has many violations.

The approval of adjustments to some contents is not in accordance with regulations and still has errors. A typical example is the project to build a road connecting to Phu My bridge. This project has a total adjusted investment of 226 billion VND, including the reason of calculating the wrong time of the original price of the cost of compensating for raw materials, fuel, and materials; wrong unit price for the settlement of completed volume...

The State Audit pointed out that there are localities that approved the area and provisional land price exceeding the value of the BT project. Thanh Hoa is an example. This locality approved the area and provisional land price exceeding the value of the BT project by 875 billion VND. At the time of the audit, the investor had to pay land use fees according to the actual land area allocated, exceeding the value of the BT project by 735 billion VND.

There are localities that signed contracts that did not comply with regulations and did not ensure the principle of parity. In Khanh Hoa province, the project of branch road system (phase 2) of the northern Cam Ranh peninsula tourist area, the decision to allocate land fund to pay back capital to investors with a value of 1,100 billion VND (calculated at the unit price of 459,000 VND/m2) to pay for the BT contract with a value of 312 billion VND did not ensure the principle of parity as prescribed in Clause 3, Article 3, Decision No. 23/2015/QD-TTg.

The State Audit found that in many localities, land allocation to investors for payment of BT projects was carried out when there was a temporary suspension document from the Ministry of Finance; land allocation for payment of BT projects was not in accordance with planning and land use plans; land allocation before BT projects were completed was not in accordance with regulations and land allocation to investors for implementation of counterpart projects was not through auction as prescribed by the 2013 Land Law.

The State Audit also pointed out the inappropriate determination of land unit prices; The work of determining land prices to be allocated to investors in some projects still has shortcomings and inadequacies. Bac Ninh, Thanh Hoa, and Hanoi City apply the method of comparative assets when appraising the value of assets that have not been successfully transacted but are only offered for sale on the market, the comparative assets do not ensure equivalence with the valued assets, some indicators of comparison of adjustment rates are still inappropriate, the time of determining land prices of the corresponding project is not consistent with the time of deciding to allocate land...

The audit results of 29 BT projects recommended handling 5,228 billion VND, including projects with a large handling rate (accounting for 25%) compared to the audited value (Before 2018, the State Audit recommended handling 7,453 billion VND in 37 projects)./.