Unveiling the Truth: Government Inspection Exposes Wrongdoings in Five Wind Power Projects in Gia Lai

Serious Violations Uncovered in Gia Lai Wind Power Projects

The Government Inspectorate of Vietnam has issued Conclusion No. 263, dated July 19, on the inspection of the People’s Committee of Gia Lai province’s responsibilities in managing and using land with origins from agricultural and forestry farms, as well as in exploiting sand, soil, and gravel and managing construction investments in the province. The inspection period covered the years 2016 to 2020.

Specifically, the Inspectorate’s conclusions highlighted violations in five wind power projects in Gia Lai. These include the Mountain Development Wind Power Plant Project with a capacity of 50MW and a total investment of VND 1,916 billion, and the Tay Nguyen Wind Power Plant Project with the same capacity and investment level. Both projects are located in Bau Can, Chu Prong, and were scheduled to be implemented from June 2020 to November 2021.

During the implementation of these projects, several violations were identified. The Department of Planning and Investment and other relevant departments failed to properly assess the financial capabilities of the project companies. Despite this, they advised the provincial People’s Committee to issue Decision No. 325 and Decision No. 326 on July 21, 2020, approving the investment proposals even though the investors did not meet the financial requirements (lacking financial capability statements and proof of contributing 20% of the total investment as required). This is a clear violation of regulations.

Consequently, just one month after obtaining the investment approval and without completing land procedures or initiating construction, the two wind power companies started transferring their shares. By November 6, 2021, they had sold 99.7% of their shares to a foreign investor, Cty EPVN W2 Company Limited.

As of now, both projects are behind schedule and have exceeded their investment timelines. The first company has installed only 10 out of 15 turbines, while the second has installed only 2 out of 15. However, the authorities have neglected their management responsibilities and failed to advise on the retrieval of the deposited funds.

Representatives of the project investors explained that as of now, both projects have been completed with a total investment of VND 3,202 billion. According to them, this capital comprises 30% of owner’s equity and 70% of borrowed capital from the parent company, with no loans from domestic banks. They asserted that the investors have the financial capacity to implement and complete the projects as required.

Regarding the share transfer to the foreign investor, they stated that it is a legal form of investment permitted by Vietnamese law, as per the Law on Investment 2014, Article 25, Clause 2, Point a.

Allegations of Forest Land Encroachment

The Inspectorate also pointed out violations in two other wind power projects: the Chơ Long Wind Power Plant Project with a capacity of 155MW and a total investment of VND 6,246 billion, and the Yang Trung Wind Power Plant Project with a capacity of 145MW and a total investment of VND 6,593 billion. Both projects are located in three communes of Kong Chro district.

The conclusions of the Inspectorate revealed that when the provincial People’s Committee approved the investment proposals, Mr. Nguyen Nam Chung was the legal representative of both projects. The investors did not have the required owner’s equity equivalent to 20% of the total investment for each project. Additionally, Mr. Chung, as the legal representative, had previously violated land use regulations and was sanctioned by the People’s Committee of Hoa Binh province in 2020 for constructing a gas station and a supermarket without permits. Despite this, the Department of Planning and Investment advised the approval of the investment proposals in August 2020, demonstrating a lack of responsibility and a violation of regulations.

Moreover, during the implementation of these projects, several other violations occurred, particularly regarding the decision to allocate 98,500 square meters of forest land to the Chơ Long Wind Power Project, which went against the Prime Minister’s instructions. The company proceeded with the construction of the wind power project on forest land before changing the land use purpose, violating the Law on Land 2013. However, the provincial authorities failed to detect and address these violations promptly.

The Inspectorate clearly stated that the directors of the Departments of Planning and Investment, Natural Resources and Environment, Industry and Trade, and Labor, War Invalids, and Social Affairs, as well as the chairman and vice-chairmen of the provincial People’s Committee, and other related organizations and individuals during the inspected period, are responsible for these shortcomings and violations.

The Inspectorate requested the provincial People’s Committee to direct relevant authorities to inspect and review the share transfer process, the employment of foreign workers without proper reporting, adjustments to the project schedules, and the compensation and support provided before leasing the land for the projects. The Committee should also ensure the proper collection of deposited funds and take appropriate action regarding the identified violations. If there are any indications of criminal offenses, the case should be transferred to the competent authorities for handling in accordance with the law.

On August 13, a leader of the provincial Department of Industry and Trade informed Tien Phong that they are continuing to inspect and review the situation to handle the violations in the five wind power projects accordingly.