The State Audit "spotted" a series of projects making losses, loss of capital and behind schedule

Long Phu I Thermal Power Plant is one of the typical power source projects that are behind schedule. Photo: Nguyễn Thanh.

The State Audit has just sent to the National Assembly a report summarising the audit results in 2020. In 2020, the State Audit audited the financial statements and activities related to State capital in 2019 of 160 companies belonging to 17 corporations.

The results show all 17 audited corporations were profitable, and the rate of return on equity in some units was high.

Profit after tax in 2019 of some units was as follows: PetroVietnam Power Corporation (PVPower) VND 2,932.35 billion, PetroVietnam Technical Services Corporation (PTSC) VND 995.62 billion, PetroVietnam Transportation Joint Stock Corporation (as PVTrans) VND 982.09 billion, Central Power Corporation (EVNCPC) VND 767.9 billion, Urban Infrastructure Development Investment Corporation (UDIC) VND 671.22 billion, Saigon Transportation Mechanical Corporation - One Member Limited Liability Company (Samco) VND 588.85 billion, and Electricity Corporation of Ho Chi Minh City (EVN HCM) VND 548.51 billion.

The report of the State Audit also stated the management and use of capital and assets of audited enterprises still have some shortcomings. Most units still have errors in accounting, declaring obligations to the State budget, so through the audit, they have to adjust assets, capital sources, revenue, expenses and propose increasing revenue collection by more than VND 1,000 billion.

Some units purchasing materials are inappropriate with actual needs, leading to a backlog of materials and goods, slow rotation or large inventories. For example, at PVPower, Nhon Trach 2 Petroleum Power Joint Stock Company is VND 238.3 billion, Ha Tinh Petroleum Power Company is VND 229.6 billion, and Hua Na Hydropower Joint Stock Company is VND 12.4 billion.

In addition, the State Audit has identified several projects that have been stopped for many years and are behind schedule and ineffective.

The UDIC has an investment project to develop technical infrastructure for new urban areas in Yen Hoa, Cau Giay, Hanoi, which has been overdue for more than 16 years but has not yet been approved for extending project implementation by the Hanoi People's Committee. Hanoi Construction Corporation - Joint Stock Company (Hancorp) has Cao Xanh new urban area project - Ha Khanh B which has been delayed for 10 years and another delayed for six years.

The Long Phu 1 Thermal Power Plant Project is behind schedule for power generation projects under the Power Plan VIII approved by the Prime Minister.

PM Contractor was embargoed by the US government and unilaterally terminated the contract, brought a lawsuit against the Vietnam Oil and Gas Group (PVN) to the Singapore International Arbitration Center.

In addition, some investment units are inefficient like PVPower, where the dividend and profit distributed in 2019 reached 0.2% of total investment capital.

The accumulated loss as of December 31, 2019 of the parent company - PTSC investing in PTSC CGGV Geophysical Survey Co., Ltd is VND 2,121 billion, Quang Ngai Petroleum Services Joint Stock Company is VND 240.7 billion.

There are projects with negative capital, like Saigon Traffic Construction Company with negative equity of VND 344 billion.

The State Audit also pointed out that several investments of corporations in affiliated firms and other long-term investments suffered losses and lost capital. Specifically, the parent company - Saigon Real Estate Corporation has seven joint venture companies, with accumulated losses of more than VND 32.9 billion. Parent company - Samco has five joint venture companies, accumulated losses of nearly VND 195 billion.

Parent company - UDIC has five joint ventures, accumulated losses of VND 288.7 billion, one company stopped operations, two other investments accumulated loss of VND 32.1 billion and one long-term investment stopped working.

There are overseas investment projects but the efficiency has been poor. Specifically, MVOT Company (FSO Orkid ship) achieved 80%, PTSC Hai Phong achieved 47.6%, AP Company achieved 25%, VOFT Company achieved 17%, MV12 Twin Dragon Company was 13.44%.