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A cash cow over-milked
Son Nguyen
Friday,  May 25, 2018,16:52 (GMT+7)

A cash cow over-milked

Son Nguyen

Wastefulness in many circumstances is unfathomable, especially when it comes to using other people’s money. This proves right to numerous public investment projects, and a typical case study has surfaced this week when the State Audit of Vietnam delivered a report appraising public investment projects at the ongoing National Assembly sitting in Hanoi.

In the report delivered on Monday, Ho Duc Phoc, head of the agency, cannoned lawmakers’ attention to a project to refurbish the Sao Khe River landscape in Ninh Binh Province, whose investment has jumped from a mere VND72 billion to roughly VND2,600 billion now. Such a weird phenomenon takes headlines far and wide.

The project was first approved in 2001. After several rounds of adjustments and revisions, according to the news site Dan Tri, its initial cost has multiplied by 36 times, which is unimaginable by any standard. According to the news site, whatever reason may be used as an excuse, the incredible upsurge in the project cost is unacceptable.

“It can be likened to a house owner initially planning to build his home with a single floor, and during the process of construction, the house turns into a skyscraper with 36 floors. That’s a myth, even if the house owner wins a grand prize of lottery while in construction,” says Dan Tri.

The Sao Khe is a small river stretching only 14 kilometers and its width varies between 20 meters and 140 meters. With the latest investment approved, the cost of cosmetic make-up for the river averages out at nearly VND200 billion a kilometer, according to the news site.

Nguyen Quang Vinh, deputy director of Ninh Binh Agriculture Project Management Board as the owner of the Sao Khe project, admits in Nguoi Lao Dong that the project has undergone four times of adjustment. “Initially, the project was meant to dredge the river stretching 14 kilometers. In the following stages, the project was supplemented with many new components, such as embankments along several sections of the river, sluice gates and several bridges across the river, plus cultural works,” he is quoted as saying in the paper.

On the sidelines of the National Assembly sitting in Hanoi, Nguyen Thi Thanh, top leader of the province’s Party Committee, told assembled reporters that “it is the mechanism that led to the project’s capital blowing out of proportion.”

“The project was licensed over ten years ago. The initial aim was how to have the project included in the list of national public investment projects, so it was designed to have a small scale to get easily approved,” she is quoted in Phap Luat Online. “However, when it came to execution, such a small scale was not accepted (by local authorities), so the project has been revised up and approved. Therefore, its scale has been getting bigger and bigger.”

Thanh also bluntly stresses that such a mindset applied not only to the Sao Khe project, but to many others elsewhere, according to Nguoi Lao Dong. “The general mindset in many other localities is to keep projects small and less costly so that they can be approved,” she is quoted as saying. The newspaper says that after 17 years of execution, the project is still far from completion although as much as VND1,223 billion has been disbursed.

Commenting on the capital upsurge at the Sao Khe project, the news site Soha laments the burden on taxpayers due to this project and other similar ones, saying such projects are tumors weighing heavily on taxpayers. “A project seeing its capital multiplied by 36 times cannot be simply considered as abnormal. It is the weird malformation on the shoulders of tens of millions of Vietnamese taxpayers.”

According to the news site, many policymakers are trying to map out new ways to increase the tax revenue so as to replenish the State coffer, instead of mulling ways to check the huge funds being wasted in such projects. Tran Du Lich, an expert serving as a member in the Prime Minister’s Consultancy Group, is quoted in the news site as commenting that “the national budget is not a family’s coffer that husband and wife can resort to at will.”

In fact, as shown in the report by the State Audit of Vietnam, wastefulness and random capital adjustments are seen at not only the Sao Khe project, but at numerous other public investment projects as well.

The coal-importing port at Vinh Tan Hydropower Complex, for example, has been approved to revise up the investment capital three times, with an additional sum of VND3,020 billion, Tien Phong reports, citing the State Audit of Vietnam. Similarly, O Mon 1 Hydropower Plant has had its capital revised up by VND10,322 billion, while Dakdrinh and Nam Chien 4 hydropower projects also have had their investment capital jumping by VND1,488 billion and VND3,361 billion respectively.

“That is extremely shocking; and after the shock comes the indignation,” says Lao Dong in a commentary. “Those figures (on increased investment) are verdicts against carelessness in the process of capital construction as well as in the approval process,” says the paper.

According to Lao Dong, as many public investment projects have been dragging their feet, wastefulness is apparent, let alone corruption, and the State budget becoming depleted is due to such projects. Various taxes are raised to replenish the State budget, but tax revenue will never be sufficient to compensate huge funds being wasted.

In his report at the National Assembly, Ho Duc Phoc of the State Audit of Vietnam stated that after reviewing 1,497 public investment projects, his agency now proposes authorities to have sanctions against numerous projects with over VND10,120 billion wrongly used, says the news site Meanwhile, Do Van Sinh, a deputy from Quang Tri Province, suggested that the Ministry of Planning and Investment as the agency overseeing public projects to launch probes into all problematic projects, especially the Sao Khe project, and submit a report to the National Assembly.

Overspending allocated funds at public investment projects, in fact, has a long history, since many localities and agencies have for years seen the State budget as a cash cow, and have managed to over-milk it. In an old news story on the topic, Nguoi Lao Dong says that between 2006 and 2012, there were 2,682 public investment projects financed by the Government bond with the combined capital of VND409,415 billion approved. However, by 2012, such projects have had their combined capital revised up to VND684,794 billion, or an increase of 67% against the initial funds approved.

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