Just completed construction
The project “Improving the capacity of the Quang Nam health sector” started from a memorandum of understanding (MOU) between the Ministry of Planning and Investment (on behalf of the Government of Vietnam) and the Embassy of Italy (on behalf of the Government of Italy) using ODA loans from the Government of Italy.
The MOU covers the provision of a concessional loan for a health service improvement program in selected areas in Central Vietnam and the Hue University of Medicine and Pharmacy.
The Prime Minister approved the investment policy on December 9, 2010 (No. 2243/TTg - QHQT). The People's Committee of Quang Nam province approved the investment project on December 11, 2012 (No. 4073/QD - UBND) and 3 times of adjustment and supplementation (2015, 2018 and 2020). The total investment of the project is over 107.1 billion VND (ODA capital of the Italian Government is over 3 million EURO, local counterpart capital is over 26.2 billion VND).
The project's goal is to invest in building a modern, complete, and synchronous Quang Nam health system from the province to the district and commune levels, capable of meeting the increasingly high and diverse needs of the people in terms of protection, care, and health improvement, reducing morbidity and mortality rates, increasing life expectancy, and improving quality of life...
However, after more than 13 years of investment, the project has only completed and handed over the construction and installation component in 2020. Mainly, it will build new ones and renovate some degraded items of commune-level health stations in Hiep Duc and Nong Son.
The equipment procurement component of more than 2.25 million UERO has only just "touched" the implementation step after the feasibility report was approved, not yet qualified to organize bidding, implement procurement and equipment installation.
According to Vice Chairman of the Provincial People's Committee Tran Anh Tuan, the medical equipment component invested in units (Quang Nam Provincial General Hospital, Nong Son Medical Center, Hiep Duc Medical Center, 115 Emergency Center) has expired.
Unable to continue implementing the approved project, the People's Committee of Quang Nam province has requested the Ministry of Finance to consider and agree to cut the medical equipment procurement component and end the project. Quang Nam will invest in the cut medical equipment part using public investment projects with state budget capital to promptly serve the medical examination and treatment work at the beneficiary units.
Many questions have been raised: Why, after 13 years since the loan was approved, the project has not been completed? Why has the time taken so long, and the equipment procurement component with a large investment value (ODA capital of more than 2.25 million EURO) not been able to be implemented, encountering so many unfeasible obstacles?
Mr. Tran Xuan Vinh - Vice Chairman of the Provincial People's Council said that investment efficiency is the main thing of a project. What can be done if construction is completed but there is no equipment? Has the investor fulfilled his responsibility? When will the project be completed when the local budget is increasingly in deficit?
Waiting for relevant procedures
According to Mr. Nguyen Quang Thu - Director of the Department of Planning and Investment, the project equipment procurement component has been promoted and surveyed since 2020, but has not been successful.
In addition to the impact of the COVID-19 pandemic, other subjective reasons have delayed the investment process. The most difficult thing is that the review and unification of the list and configuration of medical equipment must be consulted many times with the beneficiaries, the issue of equipment valuation, the EURO/VND exchange rate continuously decreased compared to the initially approved exchange rate, leading to the need to review and adjust the list and quantity of equipment accordingly...
Regarding the recommendations and proposals of the People's Committee of Quang Nam province, the Ministry of Finance agreed to end the project and use local public investment capital to complete the remaining items.
The Ministry of Finance also said that cutting down on equipment procurement and ending the project as proposed by the Quang Nam Provincial People's Committee means that the project has not achieved the target approved by the competent authority (ODA capital has been used to build a medical station but there is no equipment). The Italian Government can consider the project a failure and will handle it according to the provisions of the memorandum of understanding (MOU).
One of the provisions of the MOU discusses that in the event of a delay in project implementation of more than 24 months, the parties will discuss the continuation of the project and will “decide on specific actions.”
Force majeure cases will continue until the project is completed and funded. The Ministry of Finance has requested the People's Committee of Quang Nam province to proactively discuss with the Ministry of Planning and Investment and the sponsor to take appropriate measures to minimize the consequences of the project's termination.
According to Deputy Minister of Finance Nguyen Duc Chi, Quang Nam must analyze the results, causes, and responsibilities of the locality and project owner in having to end the project, and report to the Prime Minister for consideration and decision.
Based on the approval of the Prime Minister, the People's Committee of Quang Nam province discussed with the Ministry of Planning and Investment to handle the termination of the project according to the provisions of the MOU between the two governments. This is the basis for the Ministry of Finance to discuss with the Italian side about the loan cancellation procedures and project termination in the relevant financial agreement.
According to Mr. Nguyen Hung - Deputy Director of the Department of Planning and Investment, the project is not feasible to continue implementing and completing the investment contents. The consulting units cannot meet the correct list and standards, equipment configuration according to the list and configuration previously agreed upon by the sponsor.
Many of the current equipment are no longer in production or have changed configurations and standards, and have no name on the market to determine the price. According to the sponsor's request, the medical equipment procurement component must be organized for international bidding, and 25% of the equipment must be of Italian origin, so implementation will be difficult, seemingly impossible.
In addition, the Prime Minister has adjusted and extended this project three times, only allowing the implementation period and loan agreement to be extended until December 31, 2023. Quang Nam is waiting for related procedures to be able to complete the project.
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