VietnamNewsToday.com

NA Standing Committee analyses ineffective gov’t bonds

Several economists have raised concerns that projects using government bonds are not being carried out effectively.

Phung Quoc Hien, chairman of the National Assembly’s Committee for Finance and Budget, worried that government bond-funded projects may be unable to raise sufficient private capital for their expansion plans.

Hien addressed the issue at a meeting on January 7 held with the National Assembly (NA) Standing Committee. He said that many of these projects had expanded in scope during the construction and planning phases.

According to the committee’s figures, total investment in government bond projects between the period of 2003-2010 skyrocketed from VND246.447 trillion ($12.32 billion), to the current VND558.654 trillion ($27.93 billion) – an increase of 226.68 per cent.

The projected budgets of almost all government bond-backed projects have increased substantially from what was originally approved. Some estimates have even been tripled or quadrupled. Government bond-backed projects are routinely expanded dozens of times, while the maximum rate considered acceptable is 20 per cent.

Not do plans for expansion drive up the cost of projects, but the rise in labour costs and construction materials are also contributing factors.

Ha Van Hien, chairman of the NA Committee for Economics blamed the developers who were awarded these projects, saying, “They were too hasty in their estimates during the bidding process. Then during construction they have to increase the original price because of unforeseen costs. If additional capital is not raised, some of these projects may even be left half-done.”

Pham Minh Tuyen, head of the NA Deputies’ Affairs Committee also admitted a lack of funding when it came to certain construction projects, saying that additional investment will be required to finish many of them. He added, though, that more care must be taken before making such approvals.

“Some roads that were supposed to be 90 metres wide have been widened further. Some hospitals, which were supposed to contain 300 beds, have been made into 700-bed hospitals,” said Phung Quoc Hien.

If the situation is not improved, projects may simply be left undone, Hien said, adding that the total investment in government bond-backed projects could surpass the projected VND558.654 trillion ($27.93 billion) by 20-30 per cent.

He also recommended that the government should not licence new projects before a thorough investigation into this problem.

Minister of Planning and Investment Vo Hong Phuc said that any concerned ministries should carefully scrutinise pending projects and that contractors for projects that had been expanded should be forced to seek private investment.

From VietNamBusiness

Newer Articles
  • EVNTelecom asks for government’s approval to sell 12pct stake for VTC
  • Vietnamese enterprises expanding into international markets
  • Ernst & Young Vietnam role to be examined
  • Vietnamese firms invest over $24.5b in foreign countries as of July-end
  • Vietnam Insurance Market: Keeping Double-digit Growth
  • Vietnam’s economy looks grim with ADB’s forecast
  • Fearing recession in EU, Vietnamese businesses try to seek new markets
  • Rise in bad bank debt exposes economy
  • Tighter spending helps curb inflation
  • Expert predicts inflation at single-digit rate in 2012
Older Articles
  • MoF sets targets for fiscal year 2011
  • Economy set to cool in 2011 after red hot 2010
  • Credit hurdles to trip up foreign-backed projects
  • Vietnam’s financial company opens rep. office in Laos
  • Less optimistic, Vietnamese firms still upbeat in 2011
  • Vietnam’s knowledge economy index remains low despite rapid growth, experts
  • Pillars to lift national development higher
  • Vietnam gets raw end of the deal
  • Policies have key role in attracting investment
  • Jewellery trade makes strong rise despite high gold price
Latest News
  • Vietnamese software firms consider Japan as the major market
  • Despite problems, 2011 FDI spending equals 2010
  • EVNTelecom asks for government’s approval to sell 12pct stake for VTC
  • Vietnamese enterprises expanding into international markets
  • Ernst & Young Vietnam role to be examined
  • Vietnamese firms invest over $24.5b in foreign countries as of July-end
  • Vietnam Insurance Market: Keeping Double-digit Growth
  • Vietnam’s economy looks grim with ADB’s forecast
  • Ministry rejects import-export tax changes
  • Government okays anti-dumping suit against US
For Foreigners
  • Adb: policy tightening will lower inflation
  • HSBC, Barclays to advise Vietinbank’s planned overseas dollar bond sale
  • Vietnam govt to service debt for troubled cement projects
  • Calm heads prevail as the forex market to remain cool
  • Further fiscal & monetary tightening in coming months
  • IMF cuts Vietnam’s inflation forecast to 9.5pct in 2011
  • Vietnam’s dong has best week since 1997 after dollar rates curb
  • Vietnam tightens control over state-bank partnership
  • Foreign investors list problems in Vietnam
  • Foreign invested enterprises complain about customs procedures

BusinessTradeVietnamGovernmentFDIWorld economyVietnamese PartyEconomyEconomicMarketState managementPrime MinisterHCM cityHanoiHo Chi MinhCPIAsianWorldAmericaEuropeNguyen Tan DungHau GiangMekong DeltariceStandingMekongCambodiausajapanchinakoreaLai ChauHoa BinhHoi AnChu LaiQuang NamDa nangCan thoSon LaPower PlantMinistry of IndustryDung QuatOilSingaporeThailandMalaysiaIndonesiaLaosVietnameseFDI capitalinvestorsforeign investorNetherlandsUSservicetransportationinfrastructuretourismVNPostExpressSpainGoldTra fishexportcontractstouristMiddle AreaConstructionShipbuildingIndustryCompanyIndustrial ZonebudgetDong NaiBinh DuongVung TauTay NinhBinh PhuocTay NinhLong AnTien GiangUS investorshydropower plantQuang NinhNha TrangStock ExchangeHNXIndexcapitalAgricultureDong ThapAn GiangExport-Processing ZoneYen BaiLao CaiLai ChauDien BienSon LaHoa BinhPhu ThoHa GiangTuyen QuangBac KanLang SonCao BangmanufacturersAseanRussiadevelopmentAviationinflationHong KongAmericanChamber of CommerceSeafoodODAWBIMFFEDAsia-PacificAssociationcountriesEuropeanmarine economyThanh HoaNghe AnNam DinhHa TinhPhu LýVinh PhucBac NinhBac GiangHung YenHai DuongBinh ThuanBinh PhuocLam DongGia LaiKon tumQuang NgaiQuang BinhQuang TriNinh ThuanCa MauBac LieuSoc TrangTra VinhKien GiangVinh LongBen TreincomespoliciesLawassetsNatural GasBuildingstatisticsstrategyDa Latmineral exploitationprocessingindustrieselectricitywatersupplyEnterprisesforestryfisherycommunicationsreal estatetransportationCorruptionbauxiteSecuritiesInsuranceBankFinanceAccountgoodsTrade BalancecoffeeCoalfestivalHa NamNinh BinhHoa BinhUniversityArtsBooktravelVietnam VisaVisaPagodaCommitteePeople's CommitteeVinashincompaniesHoa PhatHSBCACBvietcombankvietinbank

Copyright 2010 © VietnamNewsToday.com 
Powered by: CIINS Design by: Webdesign.vn