This information was detailed in the comprehensive inspection report on the project's proposal, implementation, and business operations, recently announced by the Government Inspectorate.

VINAINCON, fully known as Vietnam Industrial Construction Corporation, was established by reorganizing construction units under the Ministry of Industry and Trade. The enterprise operates in industrial construction, infrastructure investment, and building materials production.

The Quang Son cement plant project, located in the former Dong Hy district, Thai Nguyen, was approved in 2002. VINAINCON was the investor, with a total investment exceeding 2,775 billion dong. By the end of 2021, the project had accumulated losses of 1,943 billion dong.

The inspection identified violations stemming from the plant's construction and operation. Investment loan costs accounted for up to 95% of the total investment, with an unfeasible financial plan. This necessitated a shift from domestic to foreign currency loans, increasing capital costs and exchange rates by over 316 billion dong. The enterprise also committed bidding violations in many packages, inflating investment costs by more than 1,063 billion dong.

The project experienced delays of over five years. With repayment deadlines approaching and no revenue generated, overdue debts accumulated, leading to losses even before operation. VINAINCON's financial situation became difficult, lacking working capital and relying primarily on borrowed funds and appropriated capital, unable to balance cash flow for debt repayment. Poor material and asset management, coupled with significant bad debts, directly impacted business capital and increased costs.

The Quang Son cement plant project is located in Thai Nguyen province. *Photo: Quang Son Cement*

Bid price approved 17,6 million USD higher than planned

According to the Government Inspectorate, during project implementation, the enterprise showed signs of violating bidding regulations, construction investment regulations, and lacking responsibility, leading to serious consequences. For instance, in package 1 for supplying main production line equipment and technical services, VINAINCON approved the investment plan without proper authority. The bid price was more than 17,6 million USD (approximately 322 billion dong) higher than the investment plan, yet the bid was still awarded. Some contracted supply volumes were lower than required by the tender documents and bid proposals, but the contract price remained unchanged, risking losses of over 3,9 million EUR (over 79 billion dong).

For packages 2 and 3, the Government Inspectorate determined that VINAINCON and Quang Son Cement One Member Limited Company did not procure their own equipment and machinery for mining but instead leased them from Quang Son Limestone Mining Joint Stock Company, deviating from the investment plan approved by the Prime Minister. In 2008, VINAINCON failed to organize a tender to select a contractor for mining, excavating, and transporting limestone and clay for the Quang Son Cement Plant. A tender was finally held in 2023, resulting in a winning bid reduction of over 47,5 billion dong, indicating potential damages of this amount. The enterprise was also found to have illegally mined over 806 tons of rock, selling it as construction stone and earning illicit profits of over 46,5 billion dong.

Unauthorized investment adjustment

Beyond these violations, the Government Inspectorate also referred additional violations in several consulting and construction packages to the Ministry of Public Security for verification. VINAINCON independently adjusted the total investment and bidding plan without proper authority and was not permitted to adjust for price slippage compensation. In package 13, VINAINCON adjusted the total investment and investment plan without proper authority. The unit failed to prepare and approve designs and estimates for certain items, dividing them into 17 packages for illegal direct contracting. VINAINCON applied a unit price adjustment contract format, exceeding the Prime Minister-approved investment plan by over 31,3 billion dong.

For packages 14 and 19, VINAINCON's Board of Directors approved adjustments that exceeded the total investment. The investment plan was changed from a lump-sum contract to a unit price adjustment, which was inconsistent with the Prime Minister's approved plan, risking damages of over 213 billion dong. Given this series of violations, the Government Inspectorate has requested the Ministry of Public Security to verify VINAINCON's approval of adjustments exceeding the total investment, which violates the Bidding Law, Construction Law, and the Prime Minister's directives, risking 1,063 billion dong in damages. VINAINCON also gained illicit profits of over 46 billion dong from resource exploration and exploitation.

Regarding related responsibilities, the Government Inspectorate recommended that the Ministry of Industry and Trade, the Ministry of Finance, and the Thai Nguyen Provincial People's Committee review and hold accountable the involved collectives and individuals. Commercial banks were asked to review and address VINAINCON's debts as of the end of 2021, which include over 238 billion dong owed to BIDV and over 1,126 billion dong owed to VDB.