The project got off the ground on May 10, 2008 and was handed over to the Ninh Binh Nitrogenous Fertilizer Plant project management unit on September 23, 2012. The project management unit later temporarily transferred the whole facility to Ninh Binh Nitrogenous Fertilizer Co. Ltd. on October 15, 2012.

During the inspection, wrongdoing and irregularities involving the development and management of Ninh Binh Nitrogenous Fertilizer Plant and the operations of Ninh Binh Nitrogenous Fertilizer Co. Ltd have been detected.

Ninh Binh Nitrogenous Fertilizer Co. Ltd. constantly racked up losses between 2012 and 2015. The feasibility study estimated accumulated losses in the first three years would be nearly US$48 million, equivalent to some VND1.02 trillion based on the December 31, 2014 exchange rate.

In fact, accumulated losses from 2012 when the plant went into production to the end of 2014 was over VND1.7 trillion, or VND694 billion greater than estimated.

Vietnam National Chemical Group had approved adjustments to the project based on low financial efficiency evaluation results, which entails a lot of potential risks. The head of the project management unit had not complied with rules.

For the trial run, the project owner provided the contractor with an amount of coal that exceeded the EPC contract. After several rounds of negotiations, the project owner and the contractor have yet to agree on the value of and the responsibility of each party to such excessive coal volume.

Construction work was 420 days behind schedule, leading to additional costs, including VND527 billion in interest for the extended EPC contract.

The project owner received the plant from the contractor when specifications had not met the requirements in the feasibility study and the signed EPC contract. Operations of the production lines and equipment were unstable, with the number of operational days and capacity below the levels given in the approved feasibility study.

After more than four years of commercial operation, the project owner and the contractor have yet to endorse the acceptance and official handover of the project and as they are still busy solving the existing problems. Since they have not reached an agreement on responsibility of each party to the issues arising during the contract implementation process, the project remains unresolved.

The Ministry of Industry and Trade requires Vietnam National Chemical Group, the project management unit and Ninh Binh Nitrogenous Fertilizer Co. Ltd. to review and clarify responsibilities, and propose coping measures.

Source: Bizhub.vn