Debt in basic construction, why (?!) - Part 2: Urgent project... unfinished
(QBĐT) - The investment mindset of “asking-giving”, “asking for money, spending it”, debt… later and the habit of “waiting and relying” have caused many urgent and essential projects to have their investment time extended, leading to waste and deterioration. That is also the cause of outstanding debt and basic construction debt in localities.
Báo Quảng Bình•12/06/2025
>>> Article 1: "Revealing" huge debts
Many projects are waiting for… capital!
Many local infrastructure investment projects, due to lack of initiative in capital sources and lack of capital, have been "shelved" for many years. The situation where businesses wait for localities to disburse and repay debts to have money for construction, while localities wait for money from land use rights auctions, is a vicious cycle that leaves many urgent and essential projects unfinished, causing waste.
Trung Trach Kindergarten (Bo Trach) is one such project. This kindergarten started construction in 2019, with a total investment of 23 billion VND, of which the local budget is more than 16 billion VND, and the higher-level budget is more than 7 billion VND. According to the plan, in 2023, the project will be completed, put into use and pay off the "debt" of a standard school. However, after more than 6 years of construction, Trung Trach Kindergarten is still unfinished and has been "abandoned" for many years.
According to our observations, the project has basically completed the rough construction of the 2-storey classroom buildings and functional buildings. Some auxiliary buildings are under construction, in disrepair, and the campus around the schoolyard is overgrown with grass. Unfortunately, due to long-term abandonment, some locations of the classroom buildings have shown signs of deterioration, cracks, and leaks.
According to the leader of Trung Trach Commune People's Committee, the reason why the Trung Trach Kindergarten project has been unfinished for many years is due to lack of capital. Currently, the project has only accepted more than 60% of the volume, equivalent to a capital of more than 8 billion VND disbursed to the contractor. The local budget capital cannot be balanced to continue allocating to the project, because the budget revenue from the auction of land use rights from 2021 to present has not met the plan and must be prioritized to pay off outstanding construction debt.
Trung Trach Kindergarten (Bo Trach) project has been "shelved" for many years due to lack of capital.
In Dai Trach commune, in addition to the two unfinished projects of Dai Phuong Kindergarten, the head office building, and the parking lot of Primary School No. 2, the road project from Dai Nam village to Phuong Ha is only about 55% completed.
According to local leaders, this is an essential project, invested with 13 billion VND, started in 2022, expected to be completed in 2024, but has not been completed yet, due to lack of capital. So, urgent and essential projects have now become "shelved" projects waiting for... capital.
A local leader frankly said: “If we don’t do it, we will be criticized by our superiors. But if we don’t have the resources, what can we do? If we do it, we will have to pay. Investment resources at the commune and ward levels all depend on land auctions. If we can auction the land, we will have money to pay, otherwise we will have to pay the debt.”
Waiting for the ward and commune to pay the debt!
That is the answer of leaders of most localities that still owe XDCB. Chairman of the People's Committee of Quang Phuc Ward (Ba Don Town) Nguyen Tien Thanh said: "Currently, the ward still has a few billion VND, but we don't know how to disburse it. Because there is very little time left from now until the ward is merged and a new ward is established. We will probably have to transfer the debt to the new ward to resolve it."
According to the Chairman of the People's Committee of Dai Trach Commune (Bo Trach) Nguyen Thi Thu Nga, the policy of implementing the works and projects was built from the beginning of the term and implemented in accordance with regulations and plans. However, during the implementation process, due to difficulties in revenue, the locality flexibly applied to "share" a little for this project, a little for that project.
A leader of the Department of Finance said that currently, districts, towns and cities have not reported specific data on the debt status of construction investment projects as required by the province. Only after having official data summarizing the debt status of construction investment projects of communes, wards and towns, will there be a solution.
A local leader who was recently transferred from the district level said that after checking and reviewing, he discovered that many previous projects were invested in by the locality. Whenever there was money, they spent it without calculating or subjectively thinking that the revenue would be abundant every year. In reality, there were years and localities where the revenue from auctioning land use rights amounted to tens of billions of VND, but there were also years when no revenue was collected. For example, some localities, seeing the abundant revenue, "generously" spent hundreds of millions of VND to equip the village cultural house with facilities, instead of mobilizing social resources.
Some localities decide to build projects with a budget of billions of dong, but have only a few hundred million in hand. The remaining amount must be asked for or have to delay debt from the construction unit. The construction project this year, this phase is not completed, and continues to be extended to next year. Each year, a small amount of capital is allocated, so the investment project keeps dragging on. Not to mention the mindset that "being a leader means having to have projects" is one of the reasons leading to outstanding debts and construction debt of localities at the grassroots level.
In the coming time, along with the arrangement of administrative units at all levels according to the 2-level local government model, to promote the initiative and creativity of local governments, the Central Government has a policy to promote decentralization and delegation according to the principle of "locality decides, locality does, locality is responsible". Then, institutions and regulations will be completed for implementation. However, in the conditions that localities, especially disadvantaged areas, have not yet proactively taken the initiative in resources, support from higher levels for urgent and essential projects is necessary. However, when deciding to support investment in projects, competent authorities need to require localities to demonstrate the resources allocated for the projects, to ensure that investment capital is used effectively, not wasted. Only then can the current situation of scattered, fragmented, and ill-calculated investment be limited.
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