The Ho Chi Minh City - Trung Luong Highway in southern Vietnam
The construction minister told a meeting on Monday that the draft of revised construction law, if approved, will allow the government to control state-funded projects better and lessen waste.
Minister Trinh Dinh Dung said the current Construction Law, which was passed in 2003, has many limitations, leading to waste that could account for 1-10 percent of a project’s costs.
He said the existing law fails to draw the line among methods and contents of investment, and the scope of management as well as the responsibility of related parties in managing projects that use different funds aside from the state budget.
This has led to a situation in which the government applies one method of management for all the projects – assigning an agency as the project’s investor, and without strict supervision -- while the consultant joins hands with the contractor in increasing the project’s costs, he said.
Moreover, while designs play an important role in deciding a project’s effectiveness and feasibility, the current law does not stipulate the participation of major agencies in overseeing the process of design, which is another reason for waste, according to the minister.
Nguyen Van Duc, vice chairman of Ho Chi Minh City Real Estate Association, pointed out that since the law accounts for the cost of design and consultation in a proportion to the project’s total cost, so relevant parties try to increase the total cost as much as possible.
Duc said for foundations alone, waste accounted for 70-80 percent of their costs, adding that the costs increase more when work is delayed by three to nine months.
An expert who requested anonymity said he once filed complaints with agencies in HCMC in 2011 about wasteful spending on many public works in the city.
He said buildings were built with foundations specific for vulnerable soil, even though they were located on good soil.
The meeting was organized by the ministry in collaboration with the National Assembly’s Science, Technology and Environment Committee in HCMC to collect experts’ opinions on the bill.
In Vietnam, the government, which has applied measures to tighten public spending in recent years, is often criticized for wasteful spending.
Vietnam's budget deficit ceiling was set at 5.3 percent of gross domestic product (GDP), or VND224 trillion (US$10.6 billion), this year.
Under a National Assembly’s resolution, the deficit must be spent on public projects and repaying debts.
Last year the cap was fixed at 4.8 percent of GDP.
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