Inspectors in Tien Giang Province have initially concluded that the Dong Tam Water B.O.O Corporation has violated three laws and caused losses of at least VND165 billion (USD7.92 million).
The Dong Tam Water B.O.O Corporation's water plant
The provincial authorities announced the results of the inspection of the Corporation’s operations yesterday, and Nguyen Van Chien, spokesman of the committee, said the former chairman of the provincial People’s Committee, Tran Thanh Trung, and a research team led by deputy director of the Finance Department, Tran Van Hung, should be blamed for the wrongdoings and the loss caused by the project.
In 2007, Prime Minister Nguyen Tan Dung directed the chairman of the provincial People’s Committee to develop a project to upgrade the province’s water supply to 170,000 cubic metres per day for the Go Cong area, inspectors said.
The authorities, however, did not follow the directive, instead setting up another project in the form of Build-Own-Operate (BOO) to establish the Dong Tam Water B.O.O Corporation, which was planned to supply only 90,000 cubic metres per day.
This BOO project cost more than VND1 trillion (USD48 million), while the original upgrade would have cost only VND890 million.
The Corporation later built just 44 km of water pipelines, while if upgrades had been carried out, the length of the pipes would have been 130 km.
More seriously, the BOO form is not provided for in the Investment Law, but the authorities still developed the project without asking for permission from the Government, inspectors said.
Water price too high
After the Corporation’s water plant was put into operation in July 2010, the authorities fixed the water price at VND8,000 (USD0.38) per cubic metre, which is expected to increase to VND16,000 according to a 20-year roadmap, causing strong objections from the public. Meanwhile, the regulated water price for households in the province is only VND4,500 per cubic metre.
As a result, the province’s budget had to provide VND350 billion (USD16.8 million) every year to offset for the difference between the regulated price and the randomly fixed price.
In addition, the inspectors also initially discovered that the total cost of the project as shown in the Corporation’s books was VND165 billion (USD7.91 million) higher than the actual cost.
Meanwhile, the Corporation not only violated the Investment Law but also the Construction Law and the Bidding Law, inspectors said.
Provincial spokesman Chien said the authorities would report to the Prime Minister about the inspection’s results.
The authorities will also negotiate with the Corporation to acquire all of the stakes of the investors from Ho Chi Minh City at the Corporation, as a way to supply water to locals at reasonable prices, he said.