City denies inspectorate findings on road project losses

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Authorities in Ho Chi Minh City have denied the government inspectorate's recent findings that their violations in approving and monitoring a road project had caused losses of over US$44.3 million to the state budget.

 

In a letter sent to Thanh Nien Friday, the city's People's Committee said that the inspectorate had not given proper attention to their explanations before announcing the findings on the Tan Son Nhat Binh Loi beltway project.

 

Earlier this week, the inspectorate said that municipal authorities had estimated the value of five plots of land, which were given to the project investor GS Construction & Engineering Corporation under a build-transfer contract signed in 2007, at rates that prevailed long before the plots became available.

 

The land plots were supposed to have the same value as the Korean-owned company's investment in the project. The land was rented to the Korean company to build residential areas, trade and service centers.

 

The early estimates, made in 2005 instead of 2008, when the latter was allowed to rent the land, resulted in losses to the excheque, inspectors said.

 

Some of the land lots, like the one in District 10, had reached the value of $51.6 million in 2008, while it was estimated at $37 million in 2005.

 

However, Nguyen Thanh Tai, vice chairman of HCMC People's Committee, said in an interview with Tuoi Tre that the losses of over $44 million mentioned by the inspectorate's report was, in fact, related to a plot in Thu Thiem area of District 2.

 

Tai said the plot's value was then estimated in accordance with the value of another piece of land in Binh Thanh District.

 

He said that the latter had an area that was almost double the one in Thu Thiem, yet was worth only over $50 million. Meanwhile, the one in Thu Thiem was worth more than $100 million.

 

So, "it's impossible to say that the city had caused losses," the vice chairman said. 

 

In response to inspectors' conclusion that the city had violated financial management regulations in failing to follow the local financial department's consultancy division to estimate the land's value, Tai said various changes had taken place that made the department's calculations outdated.

 

The city's People's Committee had already explained  the changes in writing, he added.

 

Regarding the inexplicable VND138.4 billion ($7.09 million) "indirectly paid" to GS as found by the inspectorate, the municipal authorities said in the letter that GS acted both as the investor and main contractor, and the money was actually fees for the contractor, including air tickets.

 

"It was necessary to make estimates for the fees," the authorities said.

 

On the other hand, the authorities admitted their mistakes in amending the plan approved in 1997 without permission from the Prime Ministers.

 

Still, they said the modifications were made for the public's sake and to speed up the project's progress.

 

Meanwhile, Tran Van Truyen, chief of the government inspectorate told Tuoi Tre that before announcing their conclusions, the inspectorate met with related agencies many times and asked them for explanations.

 

He said that the conclusions have been reported to Prime Minister Nguyen Tan Dung, and the HCMC People's Committee can make their explanations to him. He can consider the arguments of both sides before coming to conclusions on the inspection's findings, he said.

 

Despite the controversies, Tai said the project, which was launched in June 2008, will still go on.

 

The beltway project will connect the Tan Son Nhat International Airport in Tan Binh District with northeastern areas of the city when it is put into operation in 2013 as scheduled.

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