As of the end of 2011, 63 provinces and cities across Vietnam owed a combined VND91 trillion (US$4.29 billion) in payment arrears to construction companies over basic construction projects, the State Audit of Vietnam has reported. A few of the localities with the largest arrears are Ha Tinh (VND9.69 trillion), Dong Thap (VND3.33 trillion), Nghe An (VND6.31 trillion), and Bac Ninh (VND2.85 trillion), according to the report. The massive debts have exacerbated the hardship of many constructors, sending some to the verge of bankruptcy, and workers to unemployment, commented Dr. Tran Dinh Thien, head of the Vietnam Economic Institute. “These arrears are the root of bad debts in the economy, causing difficulties for both the government and local businesses,” he said. The finance ministry, meanwhile described the arrears as “multi-layer debts,” in which the government first failed to pay business A, which in turn did not have money to pay its partner B, and so on. At the end of the debt series, employees would not be paid, while the businesses also failed to clear bank loans due to the lack of money initiated from the failure to pay of the localities whose projects they were working on. According to a recent report by the Labor Union of the transport ministry, 3,200 people from 98 companies have lost their jobs, while the total unpaid labor wages as of the end of June were VND160 billion. The main reason behind this bitter fact is that the localities have failed to clear payments with businesses even when their projects were finished, while many others projects have been stopped halfway due to the capital shortage. Another statistic from the transport ministry reveals that there are as many as 200 projects whose constructors have yet to receive a combined VND2 trillion worth of payments. A representative of Cienco 1 said it has yet to receive payment from a locality three years after finishing a project there. Meanwhile, Pham Dinh Hanh, director of Nghe An-based Hoa Hiep Co Ltd, said the government owes his company VND40 billion. “Most of the businesses’ capital is from bank loans, so the late payment from the localities is a big dead to them,” he lamented. tuoitrenews.vn/business/12963/vietnamese-localities-post-shocking-43-bln-in-payment-arrears
Posted on: Mon, 09 Sep 2013 15:17:58 +0000
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