Violations on land management

 

According to the conclusion of the Government Inspectorate, during 2012-2015, ACV used the wrong capital source to invest in the construction of the new $13.1-million E6 runway project at Danang International Airport. Thereby, ACV has to pay additional corporate income tax of VND62.674 billion ($2.76 million). Additionally, ACV made mistakes in evaluating state-owned assets at the moment of equitisation.

 

The Government Inspectorate has also detected that ACV and some airport branches leased 2.931 hectares of land and contributed capital for the wrong purposes.

 

ACV had not completed the procedures to rent out 1.924 ha of land to the state before the equitisation as prescribed, leaving no basis for the payment of land rent.

 

While the 7.63 ha of defence land for the expansion of Tan Son Nhat International Airport was cleared, the procedures conducted by the Ministry of Transport (MoT) and the Ministry of National Defence (MoD) to allocate the land to ACV were not in accordance with regulations. The incorrect calculation of the compensation of the cost of works on the land resulted in a total loss of VND61.605 billion ($2.71 million). MoT, MoD, ACV, and consultancy company ADCC are responsible for this loss. 

 

The inspection of ACV’s business activities claims that the company recorded an increased value of assets without any invoices and documents to allow for the VND70.413 billion ($3.1 million) depreciation of fixed assets.

 

From 2007 to December 2014, ACV did not pay land rent and needs to pay the state a total VND309.019 billion ($13.6 million).

 

ACV did not carry out the bidding in accordance with the regulations but has been appointing contractors to lease most of the land to provide airport services since 2010 (only in 2014 and 2015 ACV has signed 803 contracts worth VND701.185 billion, equivalent to $30.82 million).

 

Losses of VND3.652 trillion

 

The conclusions of the Government Inspectorate also outlined some of ACV’s violations in equitisation and the divestment of VND903 billion ($40 million). This company needs to pay corporate income tax of over VND692 billion ($30.5 million). There were also many violations in the way ACV set the rent it submitted to MoT, causing a loss of VND297 billion ($13.1 million) at a project of Danang International Airport.

 

The equitisation process at ACV has been too slow, leading to the financial damages and difficulties of selecting strategic investors. Thus, the company could not reach the goals of the divestment.

 

Regarding the management of investment and construction activities, the Government Inspectorate set out: “While carrying out some investment projects, the investor (ACV), consultancy contractor (ADCC), and construction contractor (ACC) did not make and approve a blueprint or provide essential evaluations. Adding more work items was not in accordance with regulations and procedures. Applying the wrong price of material transportation caused a loss of VND3.561 billion ($157,000). The company also approved projects before the Civil Aviation Authority of Vietnam could approve projects under groups A and B. The total investment capital of the approved plans was VND73.641 billion ($3.25 million).”

 

The Government Inspectorate also outlined a series of violations related to the state management of aviation and construction, such as the operating time of landing or take-off, the price of aviation services, and the fees charged by Vietnam Airlines.

 

As a result, the Government Inspectorate recommended the relevant agencies to request the company to explain or investigate the total loss of VND3.652.5 trillion ($161 million) and the handling of the 7,225ha area. Deputy Prime Minister Truong Hoa Binh has agreed with this conclusion.

 

By Nguyen Huong

 

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