Quang Ngai requests to cancel project proposal worth more than 814 billion VND

The People's Committee of Quang Ngai province has just sent Official Dispatch No. 2869/UBND-KTTH to the Prime Minister on the supplementary report to cancel the proposal for the project to improve urban environmental infrastructure and minimize the impact of climate change in Kon Tum city using ODA capital (Official Development Assistance) from the Government of Finland (PIF).

According to the People's Committee of Quang Ngai province, the reason for canceling the project proposal is that the sponsor's policy has some contents that are different from the provisions of Vietnamese law such as: the project must have a contractor from Finland participating in the bidding and winning the bid; the project must have a percentage of goods originating from Finland and must be approved by the official export credit agency of Finland; after the project owner and contractor from Finland sign the project implementation contract, the Ministry of Foreign Affairs of Finland will consider negotiating, signing the Loan Agreement and deciding to finance the project.

The project has a relatively large investment preparation cost, about 18 billion VND, and may face the risk of being decided to invest but unable to sign the Loan Agreement due to legal problems or spending a lot of time to carry out the related procedures to sign the Loan Agreement according to regulations.

The project also has one-time fees paid before loan disbursement (credit guarantee fee) estimated at about VND25,993 billion and other payments such as loan principal of about VND135 billion, bank fees of about VND8,432 billion and re-lending management fee of VND2,095 billion.

Meanwhile, currently, every year the locality must balance and arrange the provincial budget of about 32,588 billion VND to pay principal, interest, and loan fees for projects.

Therefore, balancing and arranging for one-time payment of loan fees before disbursing the loan and other project payments will put great pressure on the local budget, affecting the regular expenditure tasks of the provincial budget.

From the above difficulties and problems, based on the provisions of the law on public investment and the no objection of the Ministry of Finance , the People's Committee of Quang Ngai province reports to the Prime Minister for consideration and decision to cancel the Proposal for the Project to Improve urban environmental infrastructure to minimize the impact of climate change in Kon Tum city - Component of the Drainage and Wastewater Treatment System of Kon Tum city, Kon Tum province plans to borrow ODA capital from the Government of Finland.

Regarding the project, the People's Committee of Quang Ngai province assigned the Department of Finance to preside over and coordinate with the Department of Construction and relevant localities to review and advise competent authorities to consider and arrange medium-term public investment capital for the period 2026 - 2030 of the province and other legal capital sources to invest in renovating and upgrading the drainage and wastewater treatment system in a number of key areas, especially in the central wards in Kon Tum city (old) and Quang Ngai city (old), ensuring compliance with the practical situation and budget balance.

The Project to Improve Urban Environmental Infrastructure to Mitigate Climate Change Impacts in Kon Tum City; Component: Drainage and Wastewater Treatment System in Kon Tum City proposed by the People's Committee of Kon Tum City (old) was officially approved by the Ministry of Foreign Affairs of Finland in May 2021 and the Project Proposal was approved by the Prime Minister in Decision No. 767/QD-TTg dated June 27, 2023.

The total investment of the project is over 814 billion VND; of which ODA capital from Finland is over 562 billion VND, the rest is matched by the locality. Of the ODA capital, there is nearly 183 billion VND in non-refundable aid, loan capital is over 379 billion VND.

Source: https://baodautu.vn/quang-ngai-xin-huy-de-xuat-du-an-hon-814-ty-dong-d398072.html