Many violations at Vung Ang Economic Zone

On April 14, the Government Inspectorate (GIA) announced the conclusion of the inspection of the compliance with the law on investment in basic construction and land management and use for a number of projects in Ha Tinh province in the period 2004-2011 with many violations in this province, especially in the Vung Ang Economic Zone (EZ). This conclusion also had the direction of Prime Minister Nguyen Tan Dung and Deputy Prime Minister Nguyen Xuan Phuc.

Lack of transparency in bidding

TTCP believes that the investment in the construction of Vung Ang Economic Zone in general and the implementation of the Formosa project (a large-scale FDI project) has directly promoted the socio-economic development of Ha Tinh province, as shown by the rapid increase in budget revenue from this Economic Zone, from 526 billion VND in 2011 to nearly 1,350 billion VND in the first 7 months of 2013, accounting for 51% of the total budget revenue of the whole province.

However, in the investment management of Ha Tinh province, there are still some violations and shortcomings. Specifically, the capital allocation according to the plan is low compared to the total approved investment (44.28%; some projects have invested but lack capital). The reason is that when deciding to invest in some projects, the province did not carefully consider the ability to arrange capital sources and the ability to provide capital according to progress, leading to a situation of investment being spread out, prolonged, and low investment efficiency.

Ha Tinh province also revealed limitations in organizing bidding and assigning contractors, leading to a lack of competitiveness and transparency. The situation of delayed progress of bidding packages is too large, with up to 557/1,120 bidding packages (accounting for 50%), falling mainly into packages due to designated bidding or limited bidding. Not being able to select contractors with sufficient financial capacity and practical capacity is one of the main reasons for delayed progress, increasing settlement value, and wasting the State budget.

TTCP also stated that the Vung Ang Economic Zone Management Board's granting of a 70-year investment certificate to the investor Formosa Hung Nghiep Iron and Steel Company Limited without collecting discharge fees is not in accordance with regulations. Along with that is the delay in collecting resource tax and not collecting enough environmental protection fees for sand used to level the ground for the construction of the steel mill complex and Son Duong deep-water port of Formosa Company...

"First kill, then report"

In particular, there were many violations in the investment project to build a water supply system for Vung Ang Economic Zone. This is an urgent project, one of the indispensable infrastructure conditions to attract investment in important projects such as Formosa Ha Tinh's iron and steel production; Vung Ang 1 and 2 thermal power plants. Due to budget difficulties, Ha Tinh province proactively proposed and the Prime Minister agreed to implement the project in the form of socialized investment in infrastructure projects in Vung Ang Economic Zone. The investment in building a water supply system for Vung Ang Economic Zone has also been supported by the state with resources.

However, before 2012, this project had some shortcomings and violations. For example, Vung Ang Investment and Development Joint Stock Company decided to approve the project when the investment capital source had not been determined; Ha Tinh Provincial People's Committee chose an investor who was not specialized and had no experience in implementing the project.

In particular, when the state capital portion in the total approved investment amount and the mechanism for managing the state capital support have not been determined, by March 15, 2013, 240 billion VND out of the total of more than 600 billion VND of state budget capital (accounting for 40%) had been disbursed; the investor carried out the bidding (including contractors who are shareholders of the investor) without the Prime Minister's permission, which is a violation. The order and procedures for selecting the project investor did not comply with regulations (before the Prime Minister issued a directive), demonstrating "cutting first, reporting later", haste, subjectivity and voluntarism.

In addition to violations in construction investment management, the Government Inspectorate also pointed out violations by Ha Tinh province in land management and use. There are signs of long-term lax management in some districts in land management in general and forestry land in particular. Land recovery and site clearance compensation in Ky Anh district have some major shortcomings, causing a high risk of lawsuits. Ha Tinh province also issued 30 mineral exploitation licenses outside the planning; issued 15 mineral exploitation licenses in the Vung Ang Economic Zone not in accordance with the planning. Through inspection, the Government Inspectorate discovered financial violations amounting to over 493 billion VND.

From the inspection results, the Government Inspectorate recommends that the Chairman of the People's Committee of Ha Tinh province must rectify many issues, including strictly implementing the Prime Minister's instructions related to the Vung Ang Economic Zone; handling finances... In particular, it is necessary to strictly review the violating collectives and individuals, and handle violations with the right people and the right mistakes. In case there are signs of personal gain, it must be transferred to the investigation agency for criminal prosecution. The Government Inspectorate also recommends that the Prime Minister assign the Ministry of National Defense and the Ministry of Public Security to continue to coordinate with the People's Committee of Ha Tinh province to implement measures to ensure national security in the Vung Ang Economic Zone...

Following the direction of Deputy Prime Minister Nguyen Xuan Phuc on the announcement of the inspection conclusion in Ha Tinh province, the Government has agreed with the proposal of the Ministry of Planning and Investment to continue to maintain the 70-year term in the certificate granted to the Vung Ang Economic Zone project.

According to SGGPonline