A view of the new branch of Bạch Mai Hospital in Hà Nam Province. —VNA/VNS Photo

HÀ NỘI — The Government Inspectorate has announced their findings into the violations in the investment and construction of the two new branches of Bạch Mai Hospital and Việt Nam–Germany Friendship Hospital, stating that an estimated losses of nearly VNĐ80 billion (approximately US$3.2 million) to the State budget have been incurred.

The conclusion comes from the agency’s recently issued inspection report, which highlights multiple breaches of regulations in the project implementation process.

According to the findings, in 2014, the Key Healthcare Project Management Unit, the investor in the projects, submitted a proposal, which was approved by the Minister of Health, to hire foreign consultants for the development of the hospital projects (both based in capital city Hà Nội) in the northern province of Hà Nam.

However, the inspection revealed that both the Minister of Health and the Key Healthcare Project Management Unit at the time had seriously violated regulations on public procurement. They deliberately selected a predetermined foreign consulting firm, bypassing legal procedures and competitive bidding requirements.

In the project proposal, the Project Management Unit justified the need for foreign consultants by stating that the hospital buildings required advanced architectural designs and modern materials to accommodate increasingly sophisticated and diverse medical equipment. They claimed that domestic consulting firms were not capable of meeting these demands, thus necessitating the hiring of foreign consultants.

Despite this claim, the investor failed to provide any evidence proving that domestic consulting firms were unable to meet the project requirements. In fact, prior to this, a domestic consultancy had already provided project development services and technical design consulting for a hospital with an even larger capacity.

The Government Inspectorate concluded that while the Director of the Key Healthcare Project Management Unit only proposed hiring foreign consultants to develop the project, the Minister of Health went further. In Decision No 996 dated March 21, 2014, the Minister not only approved this proposal, but also extended it to include hiring foreign consultants to design both projects even though there had been no such recommendations, and the two projects had not yet received official approval at that time.

Subsequently, in Notification No 417 dated May 9, 2014, the Minister of Health issued a directive naming VK Group, a company based in Belgium, as the designated consulting firm for the projects, despite the fact that no contractor selection process had taken place.

The Government Inspectorate emphasised that the proposal and approval of hiring VK Group as the foreign consultant were both subjective and intentionally biased. This decision was made without a proper assessment of the capacity and experience of domestic firms, in clear violation of Việt Nam’s laws on bidding and the regulations governing the engagement of foreign consultants in construction projects.

The Inspectorate assigned responsibility to the Minister of Health, the Director of the Key Healthcare Project Management Unit, the Department of Medical Equipment and Construction, and other related units and individuals.

Furthermore, the inspection found that the process of proposing and approving architectural design plans showed signs of dishonesty and a lack of transparency. There was evidence of an intentional effort to select VK Group to participate in the architectural design phase, despite insufficient grounds to confirm the company's qualifications and without properly evaluating the capabilities of domestic firms.

These actions represent serious violations of Circular No 23/2009 issued by the Ministry of Construction, as well as the regulations on hiring foreign consultants in construction activities within Việt Nam.

In addition, the Government Inspectorate determined that numerous violations occurred during the implementation of four foreign consulting packages, including TV4/2014, TV5/2014, TVBM-04 and TVVĐ-04.

The Minister of Health, the Key Healthcare Project Management Unit and various involved units and individuals were found to have deliberately violated the law on public procurement. These violations included dividing the bidding packages without considering the technical requirements, procedural order or project integration and including the specific names of foreign consulting contractors in the bidding plans submitted for approval.

Furthermore, they structured the names and scopes of the bidding packages in a way that narrowed the consultancy's responsibilities, a move that limited competition and transparency.

The process of negotiating and signing consultancy contracts also contained serious violations. The signed contract values were significantly higher than the standard consultancy cost norms for investment and construction projects.

Specifically, the consultancy contract for project development was approximately 5.6 times higher than the norm, with an estimated overpayment of about VNĐ35.8 billion for the two projects. Meanwhile, the value of contracts for technical design and construction drawing consultancy, particularly two architectural design consultancy contracts that made up 72 per cent of the total, was around 2.3 times higher than the standard, resulting in an estimated excess of over VNĐ69 billion.

Altogether, the total value of the consultancy contracts exceeded the normative cost by around VNĐ104.86 billion. Of this amount, payments made exceeded standard rates by about VNĐ80 billion, representing a provisional loss of VNĐ80 billion to the State budget.

Given the signs of serious legal violations under the 2015 Penal Code, the Government Inspectorate has forwarded the documents and records related to the four consultancy packages to the Ministry of Public Security for further investigation.

The Inspectorate further clarified that for packages TV4 and TV5, the invited consulting firms to prepare bidding proposals were not the authors of the selected architectural design plans, which violates Decree No 85/2009 and undermines competition.

Similarly, for packages TVBM-04 and TVVĐ-04, the consulting firms invited to submit proposals were also not the authors of the selected architectural designs. In these cases, architectural design services were directly awarded without proper bidding, in violation of procurement laws.

All four consultancy packages did not meet the legal criteria for contractor designation, yet they were still implemented in that manner. This constitutes prohibited practice under the bidding regulations.

These two projects, initiated in 2014 under the Prime Minister’s directive, were expected to be finished by 2017. The projects adopted a design-build-operate contract model, a novel approach in 2014, which caused difficulties during implementation.

In January 2021, construction was suspended by the contractor. — VNS