Vietnam PM urges probe into cement plant
22-JUL-2008 Intellasia | Thanhniennews
Jul 22, 2008 - 7:00:00 AM
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Vietnamese prime minister Nguyen Tan Dung has called for concerned agencies to hasten an investigation into alleged financial irregularities and tax fraud at a state-run cement plant.
Several ministries and the state-run construction and building materials corporation COSEVCO should expedite the handling of financial irregularities at the Song Gianh cement plant which were uncovered by the government Inspectorate in April, PM Dung instructed in a dispatch on Friday.
The Song Gianh cement plant project, in the central province of Quang Binh, was undertaken by the Da Nang-based COSEVCO which is under the Ministry of Construction.
The plant was commissioned in 2006.
In its report, the government Inspectorate blamed former COSEVCO chair Tran Xuan Dinh for violations of bidding regulations at the Song Gianh cement plant.
Dinh and six of his subordinates were arrested in February for alleged financial wrongdoings during the construction of a wood plant built by COSEVCO in the central province of Quang Tri in 2005.
PM Dung asked the Ministry of Construction and COSEVCO to make a thorough review of alleged improper payments and dodgy equipment purchases at the Song Gianh cement plant.
The review is to report back by September at the latest, the note said.
According to the April report by the government Inspectorate, arrested chair Dinh was blamed for allowing German contractor Polysuis AG to be paid in euros when the cost of building the plant had been calculated in US dollars.
The oversight was estimated to have caused the loss of around 540 billion dong (US$33.5 million) of government funds.
The government Inspectorate found Polysuis AG imported equipment from Asian countries instead of Europe as stipulated in its contract.
It also concluded COSEVCO had violated bidding regulations by appointing 11 building subcontractors without carrying out any bidding process.
The completed cement plant has fallen short of targets, with its 2006 losses estimated at around 66 billion dong (US$4.1 million).
The plant still owes banks about 3 trillion dong (US$188 million), the Inspectorate's report found.
In Friday's dispatch, PM Dung also told the Ministry of Public Security to further probe a suspected 2.3 billion dong (US$143,000) tax fraud involving a Mercedes car worth 45,000 euros (US$71,200).
During the construction of the cement plant, Polysuis AG gave COSEVCO the car and the corporation then sought permission to resell the vehicle to an employee of the German contractor to avoid paying the import taxes of 2.3 billion dong.
However, the Inspectorate found chair Dinh had been using the car until the day he was arrested.
Those found to have violated financial regulations should feel the full weight of the law, PM Dung said.
In its April report, the government Inspectorate also called on police to widen their investigation into COSEVCO's other activities.
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