Four multi-trillion VND projects under Central Steering Committee's scrutiny

The Standing Committee of the Central Steering Committee for Anti-Corruption, Wastefulness, and Negativity has agreed to place four cases and matters showing signs of wastefulness under its supervision and direction: the Vicem Operations and Trading Center Tower project of the Vietnam Cement Corporation (Vicem); Hoi Xuan Hydropower project in Thanh Hoa Province; the Ministry of Foreign Affairs headquarters construction project; and Subproject 2 (Lim – Pha Lai) of the Yen Vien – Pha Lai - Ha Long – Cai Lan railway project.

These are all projects that have dragged on for years, remain incomplete or only partially finished, and exhibit signs of severe wastefulness. 

Regarding the Vicem’s project, earlier this month,  the Department of Investigation for Corruption, Economic Crimes, and Smuggling Crimes have initiated criminal proceedings against four former Vicem leaders and officials for "violating regulations on the management and use of state assets, causing loss and wastefulness."

The former Vicem leaders caught in legal trouble include: Le Van Chung, former Chair of the Members’ Council; Nguyen Ngoc Anh, former General Director; Du Ngoc Long, former Project Management Director; and Hoang Ngoc Hieu, former Head of the Appraisal Department.

Of these, three have been detained, while former General Director Nguyen Ngoc Anh has been released on bail.

The Vicem Operations and Trading Center Tower project is located at Lot 10E6 in the new Cau Giay urban area (Nam Tu Liem District, Hanoi) on an advantageous position along Ring Road 3, near the Keangnam building.

Vicem once tried to sell it without success and now wants to ‘revive’ it and put it into use.

The Vicem Operations and Trading Center project kicked off in 2010, with an investment total of VND2,743 billion (after adjustments). The tower features 31 above-ground floors and four basements.

Its goal was to build Vicem’s headquarters, offices for member units, an auditorium, and commercial services.

The project broke ground in May 2011. By August 2015, the rough construction was completed. However, since 2015, it has been left abandoned.

In June 2015, the Ministry of Construction (MOC) approved the plan allowing Vicem to retain management and use it to implement the project.

Later, Vicem requested MOC to ask for the PM’s permission for the corporation to draw up a plan and seek partners to transfer the project to recover invested capital.

In March 2017, MOC submitted a report and received the Prime Minister’s approval in principle to allow Vicem to transfer the project.

In 2017, the project appeared in the conclusions of an audit by the Ministry of Finance’s Inspectorate regarding compliance with financial, accounting, and tax laws at Vicem. The Vicem Operations and Trading Center was one of six investment projects deemed unsuitable and beyond the company’s business scope, leading to suspension for transfer or divestment.

According to the conclusions, as of June 30, 2017, the project’s verified value was nearly VND1,200 billion, with payments exceeding VND1,200 billion (due to advance payments under the contract that had not yet been verified and settled by the investor).

Restarted, yet fate remains uncertain

The reason for the project’s stagnation, according to Vicem’s report at the time, was a failure to accurately assess Hanoi’s office rental market during planning and approval. The rental rate was set at $45-50 per month, while the reference rate at the time was only $28.

Thus, continuing the project would not ensure investment efficiency. Additionally, per government policy, investments outside a company’s core business must align with its core business fields, and state-owned enterprises were barred from contributing capital or investing in real estate. 

Consequently, since 2015, Vicem reported to MOC a plan to transfer the project. However, Vicem later reported that the transfer process faced numerous difficulties and legal obstacles concerning investment, land, and the arrangement and handling of state-owned enterprise assets.

Moreover, the transfer occurred during a tough period for the real estate market, particularly the commercial center and office rental segment, preventing the project from being sold.

As a result, Vicem again requested MOC to report to the PM to seek the approval for it to continue to build the tower.

In 2023, Deputy Prime Minister Tran Hong Ha issued a directive requiring MOC to incorporate feedback from ministries and Hanoi’s People’s Committee, instructing Vicem to proceed to complete the project.

Earlier this month, Vicem officially resumed construction of the Vicem Operations and Trading Center Tower after a decade of abandonment.

Hong Khanh