Gov’t Inspectorate proposes new contract for HCM City waste treatment complex

In a report and recommendations to the Prime Minister, the Inspectorate said the waste treatment plant had committed environmental protection violations.

The Inspectorate demanded clarification of the responsibilities of organisations and individuals involved in signing the contract with VWS, including the departments of Natural Resources and Environment, and Planning and Investment.

According to the Inspectorate’s report, total revenue of VWS from 2006 to 2016, including the first nine months of 2017, was VND5.334 trillion (US$230.86 million).

Of the figure, total operating costs were VND4.250 trillion. Pre-tax profits were VND1.097 trillion, while post-tax profits totalled more than VND1 trillion, according to the audited financial statements of the enterprise.

After nearly 11 years of operation, the average annual profit of VWS was nearly VND100 billion, an extremely high profit percentage (25.8 per cent return on operating costs), the Inspectorate report said.

The unit price of waste treatment of $16.4 per tonne was too high, while the advance of $9 million given by HCM City authorities to VWS was not in accordance with Vietnamese law, the report said.

According to the Inspectorate, the HCM City People’s Committee intentionally violated the Law on the State Budget and other regulations when it advanced $9 million to VWS.

The city’s People’s Committee had previously said the advance of $9 million to VWS was done to reduce waste treatment costs from US$16.96 to US$16.4 per tonne.

But the Government Inspectorate said that such an advance was against the Law on the State Budget and that the treatment costs were still too high.

In addition, using the US dollar in valuing the project and in contracts signed between the two sides was also a violation of Vietnam’s regulations on foreign currency management.

Environmental issues

Though VWS said the waste treatment facility at Da Phuoc used advanced technology, results from inspections showed that t