Five former leaders of two state-run companies Vietnam Steel Corporation and Thai Nguyen Iron and Steel JSC (TISCO) has been arrested on charges of mismanagement causing major losses in a US$344 million steel project, VnExpress reported.The Vietnamese police have prosecuted four former steel executives on the charges of infringing investment regulations and mismanagement of public asset, causing losses in phase 2 of the TISCO’s project.
Machinery and equipment MCC delivered had rusted and become damaged after lying unused for long. Photo: Ba Do
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The project was approved in 2005 with total capital of over VND3,800 billion (over US$242 million), including two main bidding packages.
The first one was package of Tien Bo iron mine, which has been completed and put into use with a payment value of over VND224 billion (US$9.63 million).
The second one was EPC bidding package won by China Metallurgical Group Corporation (MCC) for more than US$160 million.
Findings of inspections conducted by the Government Inspectorate showed that the executives deliberately violated investment regulations by irrationally raising the investment of TISCO's upgrade plan from VND3,800 billion (US$163.4 million) to over VND8,100 billion (US$348.3 million).
At that time, the total value of TISCO’s payment for the project is more than VND4,400 billion and TISCO had paid MCC 92% of the contract value at the time, but much of the work was left incomplete, according to the Government Inspectorate.
In 2013, MCC and contractors halted the contracts. Machinery and equipment delivered by MCC has corroded and become damaged after lying unused for long, the inspectors said.
The inspection results were forwarded to the Inspection Commission of the Party's Central Committee to consider punishments on these people.
