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

Update: July, 12/2018 - 15:00
A view of the Đa Phước Solid Waste Treatment Complex in HCM City’s Bình Chánh District. Photo moitruongvadothi.vn
Viet Nam News

HCM CITY — The Government Inspectorate of Việt Nam has recommended that a contract between HCM City and Việt Nam Waste Solutions Inc (VWS) for receipt and treatment of solid waste at the city’s Đa Phước Solid Waste Treatment Complex should be re-negotiated.

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 VNĐ5.334 trillion (US$230.86 million). 

Of the figure, total operating costs were VNĐ4.250 trillion. Pre-tax profits were VNĐ1.097 trillion, while post-tax profits totalled more than VNĐ1 trillion, according to the audited financial statements of the enterprise.

After nearly 11 years of operation, the average annual profit of VWS was nearly VNĐ100 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 Việt Nam’s regulations on foreign currency management.

Environmental issues

Though VWS said the waste treatment facility at Đa Phước used advanced technology, results from inspections showed that the complex was just “burying waste hygienically”.  

The process to bury waste had also caused bad odours, according to the Government Inspectorate’s report.

Last year, VWS was fined over VNĐ3.5 billion for violations of environmental law and was forced to repair damages it had caused.

However, recent inspections revealed that the smell from the complex continues, affecting the life of residents in the area.

The Government Inspectorate in its report quoted the Inspectorate of HCM City as saying that the closure of dumping site No 3 at Phước Hiệp Landfill in the city’s Củ Chi District had caused damages of VNĐ1 trillion to the State budget.

Prior to the Government Inspectorate’s recent report, the Inspectorate of HCM City had asked city authorities to re-open Phước Hiệp waste treatment complex for further operation. But it remained unopen.

The Phước Hiệp waste treatment facility, which can receive and treat 8,000 tonnes of waste from HCM City and neighbouring provinces per day, would be able to operate until 2030, according to the Inspectorate of HCM City.

The Government Inspectorate in its report also said the Đa Phước complex includes a facility to produce compost fertiliser, but it has never been put into operation.

The Government Inspectorate asked the PM to order city authorities to conduct a review of individual and collective responsibility for errors and shortcomings at the complex project. 

In a related matter, Deputy PM Trương Hoà Bình recently asked the Government Inspectorate of Việt Nam to respond in writing to complaints about environmental violations from residents who live near the Đa Phước treatment complex.

Bình also asked the Government Inspectorate to resolve problems related to financial losses to the State budget incurred by the project and the contract signed between VWS and city authorities. — VNS

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