Capital of more than 1,800 billion VND

Recently, the Investigation Police Agency (Ministry of Public Security) has clarified violations in the investment and implementation process of the Ban Mong Reservoir Project, Nghe An Province (invested by the Irrigation Investment and Construction Management Board 4 - Board 4 under the Ministry of Agriculture and Rural Development) which was behind schedule, had to adjust the total investment many times, causing great waste to the state budget.

On October 31, 2024, the Investigation Police Agency initiated a criminal case of "Violating accounting regulations causing serious consequences" and "Violating bidding regulations causing serious consequences" occurring at Department 4 - Ministry of Agriculture and Rural Development, Hoang Dan Investment and Construction Company Limited (Hoang Dan Company) and related units; at the same time, prosecuted and applied preventive measures against 8 defendants.

According to the report dated May 21, 2024 of the National Assembly's Committee on Science, Technology and Environment examining the Government's report on the implementation of Resolution No. 135 dated November 17, 2020 of the National Assembly on changing the purpose of forest use to implement the Ban Mong Reservoir Project, this project is located in Nghe An and Thanh Hoa provinces.

This is a group A irrigation project, permitted for investment by the Prime Minister, and approved by the Ministry of Agriculture and Rural Development since 2009.

Ban Mong Reservoir has a capacity of 225 million m3, providing irrigation water for 18,871 hectares of crops along the Hieu River; providing water for industrial production and people's lives; supplementing water in the dry season for the Ca River, reducing floods for the downstream of the Hieu River; and simultaneously generating electricity with a capacity of 45MW.

The project started construction in 2010. In 2011, due to difficulties in capital sources, the project had to stop and delay progress, so in the 2012-2016 period, investment capital was only allocated to the technical stopping point, the rest was transferred to the 2017-2020 period.

In 2017, after the project was re-implemented, forestry laws changed a lot, regulations on technical and economic norms for construction and site clearance were adjusted, so the cost of project implementation increased.

Specifically, the project's compensation, support and resettlement component increased 2.2 times, from VND860 billion to VND1,906 billion. After the technical suspension, in 2017, the project was re-allocated capital from the medium-term capital source for the period 2016-2020, but was still calculated according to the total amount at the time of investment decision (unit price in 2009), so the allocated budget was not enough to complete the project.

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Perspective of Ban Mong reservoir project. Photo: Nghe An Newspaper

Therefore, the Prime Minister has allowed the project investment to be divided into two phases to suit the reality with the allocated capital.

Notably, in the process of implementing Resolution No. 135, the Ministry of Agriculture and Rural Development directed investors to review the capital sources for implementing the project's tasks and the capital sources needed to complete phase 1. Through review, the capital sources needed to be supplemented are 1,808 billion VND.

However, due to difficulties in determining the legal basis and irrigation land targets of the provinces, it was not until October 2023 that the Prime Minister approved the adjustment of the investment policy and in February 2024, the Ministry of Agriculture and Rural Development approved the adjustment of the investment project phase 1.

The capital to implement the project in phase 1 is adjusted to 5,552 billion VND.

According to the report of the Ministry of Finance and the Ministry of Agriculture and Rural Development, of which, the capital source for the period 2010-2020 is 3,496 billion VND, which has been arranged and disbursed at 100%; the period 2021-2025 is 2,056 billion VND, of which the medium and long-term capital arrangement is 1,882 billion VND.

However, by May 2024 (the time the National Assembly's Committee on Science, Technology and Environment reported), only nearly VND 447 billion had been allocated, accounting for 23.75% of the planned medium-term capital, and VND 200 billion had been allocated in 2024.

A series of ministries and localities were named.

According to Decision No. 1248 approving the adjustment of the project investment policy and Decision No. 532 approving the adjustment of the project investment, phase 1 must end on December 31, 2025. There is not much time left while the remaining volume is very large, mainly belonging to the components of site clearance, compensation, resettlement support, and replacement forestation under the responsibility of the People's Committees of Nghe An and Thanh Hoa provinces.

The Committee on Science, Technology and Environment noted that currently, the allocated capital is sufficient to implement the remaining tasks of the project phase 1, but the resolution of difficulties and problems related to reforestation, site clearance and lack of irrigation land is still very slow. If not resolved soon, the completion of the project phase 1 on schedule will not be guaranteed.

Regarding responsibility, the committee said that the Ministry of Agriculture and Rural Development has not been really thorough in inspecting, guiding, and coordinating with localities on reforestation work; there are no specific instructions for localities on paying money into the Vietnam Forest Protection and Development Fund.

The Ministry of Planning and Investment is slow in advising on approval of adjustments to project investment policies.

Regarding the People's Committees of Nghe An and Thanh Hoa provinces, the committee believes that they have not fulfilled their responsibilities for the components of site clearance, resettlement, changing forest use purposes and reforestation; and have not seriously implemented the National Assembly's resolution.

In addition, the cost estimate is not close to reality; the capacity of staff preparing for project investment is still limited, not forecasting and not fully anticipating difficulties and problems leading to major problems, having to adjust the total project investment many times; not proactively building a project implementation plan commensurate with the capital allocation progress.

The Committee recommends that the Government direct the strict implementation of Resolution No. 135 of the National Assembly on changing the purpose of forest use to implement the Ban Mong Reservoir project. In addition, it determines the responsibilities of the Ministry of Agriculture and Rural Development, the People's Committee of Nghe An province, and the People's Committee of Thanh Hoa province in implementing the tasks and components of the project according to the approved decision.

Recommend that the Government direct the development of a plan to implement unfinished tasks of the project to serve as a basis for the National Assembly to supervise, especially the conversion of forest use purposes and replacement forest planting.

Regarding this project, recently, the Investigation Police Agency (Ministry of Public Security) has clarified violations in the investment and implementation process of the Ban Mong Reservoir Project (invested by the Irrigation Investment and Construction Management Board 4 - Board 4 under the Ministry of Agriculture and Rural Development) which was behind schedule, had to adjust the total investment many times, causing great waste to the state budget.

Accordingly, the investigation agency has initiated a case for violations occurring at Department 4, Hoang Dan Investment and Construction Company Limited and related units; at the same time, prosecuted and applied preventive measures against 8 defendants.

On October 17, 2022, the National Assembly's Committee on Science, Technology and Environment also reported on the results of monitoring the implementation of Resolution No. 135 of the National Assembly on changing the purpose of forest use to implement the Ban Mong Reservoir Project (Nghe An).

According to the committee's assessment, the project has a long implementation period of over 14 years due to difficulties in capital arrangement; when capital is arranged, it is necessary to adjust and change economic and technical norms many times, due to price fluctuations, increased site clearance costs; changes in legal regulations leading to inevitable increases and arising of project costs.

The longer the project takes, the higher the public investment costs, leading to a waste of investment resources.

Clarifying violations in the implementation of the Ban Mong Reservoir Project, Nghe An Province, the Investigation Police Agency has initiated a case due to violations occurring at Department 4 - Ministry of Agriculture and Rural Development, Hoang Dan Investment and Construction Company Limited (Hoang Dan Company) and related units.