The State Audit of Vietnam (SAV) has uncovered several infringements of financial regulations and improper payments at the Cat Linh-Ha Dong urban railway project in Hanoi, which has seen delays, local media reported.The SAV, under the National Assembly, recently announced the results of its audits of the construction, management and use of investment capital in the railway project, where the main contractor is China Railway Sixth Group Co. Ltd.
A train test runs on the Cat Linh-Ha Dong urban railway in downtown Hanoi. Photo: TNO
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The project’s total investment ballooned by 205%, from the original estimate of some VND8.7 trillion (US$552.8 million) to more than VND18 trillion (US$868 million), including VND13.8 trillion, or US$670 million, in loans from China.
The SAV pointed out that the Railway Projects Management Board improperly spent VND91 billion (US$3.9 million) when the project was set up. Other VND14 billion (US$602,000) was also found unjustified at the management board of investment for construction of civil and industrial architectural projects of Hanoi. Both boards are asked to refund the inappropriate expenditure.
When it comes to the efficiency of the project, the SAV concluded that the investor failed to calculated operational costs. Therefore, the SAV said it was inaccurate for them to claim the project was commercially viable.
The unit was also responsible for determining the liability of consulting units that had made mistakes.
The SAV requested the Ministry of Transport to keep a close watch on its public investment and identify the responsibilities of individuals and organizations in the unlawful approval of the upward revision of the project’s investment.
Therefore, the SAV asked the investor to reduce the payment by VND175 billion (US$7.525 million) to the contractors as well as to negotiate with the general contractor to cut the payment by VND428 billion (US$ 18.4 million).
Besides, the SAV also revised down the declared management expenses, commitment fee, principal and interests by VND269 billion (US$11.567 million).
The auditing agency also proposed to handle collective and individual responsibilities in approving the total investment amount adjustments and improper bidding approval of Chinese investors.
Hanoi reports to the government on the project
Hanoi’s authority will report difficulties for the inauguration of the Cat Linh - Ha Dong urban railway project to the Vietnamese government and seek its instructions.
In early September, the Hanoi Party Committee made public the progress of the Cat Linh - Ha Dong urban railway project. Accordingly, Hanoi city has discussed with the Ministry of Transport about the handover of the railway to Hanoi’s administration.
However, due to some technical issues, registration, acceptance and taking over, which have not been agreed between the Ministry of Transport and the project’s general contractor, thus, the transfer of metro line has been continuously delayed, the report said.
