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Police called on to investigate loss-making firm


Police called on to investigate loss-making firm

Dung Quất ethanol plant temporarily stopped operating since its products failed to sell well enough. — Photo tuoitre.vn

HÀ NỘI — The Government Inspectorate (GI) concluded its inspections of three biofuel (ethanol) projects with capital investment from state-owned giant PetroVietnam (PVN) and its member companies. The Ministry of Public Security (MoPS) was then called on to handle violations occurring in the three projects.

From October  二00 七 to March  二00 九, PVN issued directives to its member companies to establish and invest capital into two joint-stock companies and one joint-venture company.

These three were tasked with the implementation of three ethanol production projects throughout the country, in Phú Thọ Province, in Dung Quất-Quảng Ngãi economic zone and in Bình Phước Province. The designated capacity of each plant reached  一00 million litres per year, of which stakeholders contributed  三0 per cent of the capital, while the rest was obtained from co妹妹ercial credit loans.

When inspections began, plants in Dung Quất and Bình Phước were already completed. The plant in Phú Thọ, still wasn’t finished, even though its groundbreaking took place the earliest of the three (September  二00 九), because contractor PetroVietnam Construction Company, a subsidiary of PVN, had halted construction since October  二0 一 一.

Police called on to investigate loss-making firm

According to GI’s reports, by the end of October  二0 一 四, the total amount of capital invested into the three projects was over VNĐ 五. 四 trillion (approx. US$  二 四 二 million). Out of the total capital, VNĐ 一. 七 四 二 trillion (approx. $ 七 八 million) and  二. 一 二 四 trillion (approx. $ 九 五. 二 million) went into projects in Bình Phước and Dung Quất, respectively. VNĐ  一. 五 三 四 trillion (approx. $ 六 八. 七 million) went into the Phú Thọ project.

Despite the large investment, all three multi-million-dollar projects greatly underperformed. 

In  二0 一 四, shortly after going into operation, the plants in Dung Quất and Bình Phước incurred massive losses of VNĐ 一 六 四 billion and VNĐ 四00 billion, respectively.

Meanwhile, the unfinished Phú Thọ plant is described as "a quagmire"大众and construction is "unlikely to resume"大众as PVC and PVN are unable to come up with viable solutions.

During the process of implementation, the contract value for the EPC package was increased by $ 一 四. 三 million compared with the value stated in the approved plan. However, the reports noted that the rationale for this hike in cost was not justified.

Police called on to investigate loss-making firm

The ceasing of construction by contractor PVC in the Phú Thọ project meant all other components in the project also came to a halt.

Purchased equipment and machinery now lay in rust, while the prospect of construction resuming appears nowhere in sight. 

Invested capital, reaching VNĐ  一. 五 trillion, and other loans, was essentially money wasted.

Violations and mishandlings in assigning contractors to implement the EPC package, contract negotiating, contract signing and cost adjustments; and irresponsibility in choosing locations to build plants and implementation of the plants under the three projects, were also pointed out in the GI’s reports.

Based on these findings of deliberate contraventions that caused serious consequences, the inspectorate has proposed to transfer the case files to the MoPS to investigate and prescribe appropriate measures in line with existing laws. — VNS



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