Nov 16, 2012

Vietnam - Transport contractors cry because they cannot use up 4 trillion dong a month

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VietNamNet Bridge – The requirement that contractors have to spend all the monthly disbursement in full, about 4 trillion dong a month, which was thought to be applauded by contractors, has turned out to be a big problem for them.

Contractors pay money back

The Project No. 85 Management Unit belonging to the Ministry of Transport has officially admitted the failure in its efforts to speed up the disbursement for the project implementation.

Nguyen Thanh Van, Deputy General Director of the Project Unit, at the meeting reviewing the disbursement for key projects held by the Ministry of Transport, said he would pay back the sum of 240 billion dong to the ministry because the money cannot be spent on the building of the road linking the Noi Bai airport and Nhat Tan Bridge.

The huge sum of capital has been left unused because no one could anticipate the big problems in the site clearance.

“We can spent 260 billion dong out of the 500 billion dong worth of capital advanced, because a lot of households in Dong Anh district refused to receive the compensation money for their leave, even though the payment plan was approved by the local authorities,” Van explained.

It is obvious that the “redundant” capital amount would be allocated to other ODA (official development assistance) projects. Meanwhile, analysts have commented that the project’s management unit would be “punished” by the Ministry of Transport because it could not foresee the actual capital demand.

However, the project No. 85 is not alone. Other contractors have been put under the hard pressure to fulfill the disbursement plan.

A report by the Planning and Investment Department of the transport ministry, to date, only the Thanh Hoa and Ninh Binh provincial transport departments, and the Thang Long project have reached their finish points. Meanwhile, the investors of other projects all have to hurry up to spend money, since they have been told that the deadline for the disbursement is March 31, 2013.

According to the Ministry of Transport, by the end of September 2012, the Ministry of Transport still had not disbursed 4653 billion dong allocated by the state budget for 2012. If counting on the advanced capital for 2013, investors and contractors would need to spend 3973 billion dong a month in the fourth quarter of 2012.

Barriers block investors’ way

There are two reasons that make the disbursement become so difficult.

The first one is the delay in the budget allocation. Only by September 20, 2012, could the relevant ministries reach an agreement about the additional capital allocation for projects in 2013.

The second problem is that the transport ministry requested investors only make disbursement for new workload, while they cannot advance money or pay to construction units for the completed works.

Observers said that when setting up the requirements, the transport ministry aims to be sure that the capital could be addressed to the undone construction items, so that the whole projects could be completed on schedule.

However, they said since construction companies all met big difficulties in mobilizing financial sources, they have no new products to get disbursement.

“This was the reason that took contractors much time to reorganize the construction site after one year of sitting idle,” said Nguyen Duc Thang, Deputy Head of the Road General Department, which needs to disburse1260 billion dong.

Dat Viet

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