Miscalculation of Total Investment by Nearly VND 310 Billion
A section of the Bac Giang – Lang Son Expressway.
According to the inspection report, the Bac Giang – Lang Son BOT project was approved by the Ministry of Transport (now the Ministry of Construction) in 2015, with a total investment of over VND 12,188 billion. The project operates under a Build-Operate-Transfer (BOT) contract, allowing the investor to recover capital through toll collection.
The Government Inspectorate identified multiple errors in the calculation and appraisal of the total investment. Specifically, certain construction costs were miscalculated, inflating the project’s value by nearly VND 310 billion (excluding interest and land clearance expenses).
Notably, the Ministry of Transport approved the project without updating the Environmental Impact Assessment (EIA) report, violating the Environmental Protection Law. Additionally, the approval decision was issued before receiving the Ministry of Finance’s input on toll booth locations, contravening the Prime Minister’s directives. The construction timeline (2015–2017) was deemed unrealistic, contributing to project delays.
The inspection concluded that the TEDI – VECC design consortium inaccurately forecasted traffic volume, with unrealistic growth rates of 131–186% between 2019 and 2020. This miscalculation directly undermined the project’s financial viability, leading to significant losses.
Furthermore, the contract between the Ministry of Transport and the investor contained provisions inconsistent with the tender documents, negotiation outcomes, and project approval decision. The Ministry signed the BOT contract despite the investor’s failure to meet the required equity capital and financial conditions under the Procurement Law, posing substantial risks to project execution.
In May 2018, the Ministry of Transport transferred authority over the project to the Lang Son Provincial People’s Committee. However, the province signed six contract addendums without fully adhering to the procedures outlined in Decree 150/2015/NĐ-CP. The Inspectorate attributed these issues primarily to internal instability among investors, frequent changes in capital contributions, and consortium membership, resulting in years of delays.
Low Project Efficiency, Insufficient Revenue to Service Bank Debt
According to the Lang Son Provincial People’s Committee, the project investor submitted a capital investment settlement proposal totaling VND 8,387 billion, but the province approved only VND 8,161 billion after review. The Inspectorate uncovered errors in the completed estimate, inflating it by nearly VND 80 billion, and identified additional deductions of over VND 93 billion during settlement, bringing the total financial irregularities to nearly VND 99 billion.
The report emphasized, “The project failed to meet its initial objectives, achieving low efficiency. Toll revenue at the time of inspection fell short of the financial plan outlined in the contract, leaving the enterprise unable to service its bank loan principal and interest.”
The Government Inspectorate recommended that the Prime Minister direct the Ministry of Construction, Ministry of Finance, and Lang Son Provincial People’s Committee to review and clarify the responsibilities of individuals and organizations involved across all project phases. Strict measures, including compensation for damages, should be enforced if violations resulting in budget losses are identified.
The Inspectorate also instructed the Lang Son Provincial People’s Committee and the project enterprise to deduct nearly VND 99 billion during capital investment settlement and review construction-period interest expenses for corresponding adjustments. If criminal violations or state asset losses are detected during implementation, the Inspectorate mandated the transfer of relevant files to investigative agencies for legal action.
Beyond financial adjustments, the Government Inspectorate required the Lang Son Provincial People’s Committee to collaborate with the Ministry of Construction and the Institute of Economics (Ministry of Construction) to review the application of 2020 construction norms in the Bac Giang – Lang Son BOT project.
The Inspectorate advised the Government to comprehensively review the appraisal, approval, and monitoring mechanisms for transport BOT projects to prevent losses, waste, and ensure transparency in revenue, expenditure, and investment recovery.
