A multi-billion dollar project has been stalled for years; what is the way out?

A series of projects, including large-scale projects with investments of tens of trillions of dong, have been stalled for many years. This is not simply a matter of delays, but also raises issues about the efficiency of capital utilization, asset management, and the responsibility of the parties involved.

Editor's note:

The Standing Committee of the Central Steering Committee on Anti-Corruption, Waste, and Negative Phenomena unanimously agreed to place four cases and incidents with signs of wastefulness under its monitoring and guidance: the Central Operations and Trade Transaction Center building project of Vietnam Cement Corporation (Vicem); the Hoi Xuan Hydropower project in Thanh Hoa province; the construction project of the Ministry of Foreign Affairs headquarters; and Sub-project 2 (Lim - Pha Lai), part of the Yen Vien - Pha Lai - Ha Long - Cai Lan railway line project.

These are all projects that have dragged on for many years, are unfinished/only partially completed, and show signs of serious waste. VietNamNet reviews the investment process of these projects.

The losses are immeasurable.

Speaking to PV.VietNamNet , Lawyer Truong Anh Tu, Chairman of TAT Law Firm, pointed out the reality that many projects across the country are unfinished and abandoned, causing waste, such as projects in Hanoi, the land plots at 8-12 Le Duan and 2-4-6 Hai Ba Trung (Ho Chi Minh City), or at the Saigon Agricultural Corporation (Sagri).

"The financial waste is clearly visible. Trillions of dong are buried in unfinished projects, meaning lost opportunities to reinvest in more urgent areas. It's not just the initial investment that's affected; the opportunity cost is also an immeasurable loss," Mr. Tú said.

Furthermore, several abandoned projects located in prime locations in Hanoi demonstrate inefficient land use. These areas could have generated enormous economic value if properly developed. However, instead of realizing their potential, many plots of land have become abandoned structures, deteriorating over time.

Furthermore, this expert also noted that such prolonged projects raise concerns about the management capacity of the investors, the transparency in implementation, and the accountability of the individuals and organizations involved.

"These consequences not only affect the project itself but also impact public trust in state-owned enterprises regarding the management of public capital and assets," lawyer Truong Anh Tu assessed.

Vicem's project, abandoned for many years, is now being restarted. Photo: Thach Thao

According to Mr. Tu, one of the biggest risks when dealing with stalled projects is the lack of transparency in divestment or transfer. In many previous cases, public assets have been acquired at prices lower than their actual value through uncompetitive transactions, leading to significant losses for the state.

The lawyer outlined key principles to avoid mistakes, ranging from transparent valuation and public auctions to accountability reviews.

"The principle of transparent valuation is that if a divestment decision is made, independent appraisal units must be involved to ensure that the asset value is accurately determined according to market prices. Furthermore, public auctions must ensure that the project transfer is conducted through a public auction, with supervision from relevant authorities to prevent conflicts of interest," Mr. Tú analyzed.

The lawyer asserted that without strict control over the divestment process, state-owned enterprises could easily fall into a spiral of legal disputes and risk asset losses.

It's not just about finding a way to handle a single project.

Based on legal and practical considerations, according to lawyer Truong Anh Tu, there are three feasible approaches to resolving the situation of unfinished projects while ensuring legal and financial viability.

Firstly, continue development with a strategic partner. If the project still has potential, the developer can collaborate with a financially capable and experienced investor to complete the construction. This is the least risky option and can still benefit all parties.

The second approach is controlled divestment. This means that if the investor wants to withdraw, a public auction should be organized to ensure that the assets are valued accurately, preventing them from being sold cheaply to vested interests.

Another option is functional renovation. Accordingly, if continued development is not feasible, consideration could be given to changing the purpose of use for more efficient exploitation, instead of allowing the building to continue to deteriorate.

"Regardless of the chosen option, it's crucial to have a clear strategy and a determination to implement it, avoiding prolonged delays without concrete solutions. The core issue isn't just finding a way to handle a single project, but also establishing a more transparent and rigorous management mechanism for projects using state capital," lawyer Truong Anh Tu emphasized.

Source: https://vietnamnet.vn/du-an-nghin-ty-dap-chieu-nhieu-nam-dau-la-loi-thoat-2382819.html