VietNamNet Bridge – The Government Inspectorate on Friday announced that the Viet Nam Posts and Telecommunications Group (VNPT) had made significant investment mistakes that had wasted a lot of money.

Staff go about their work at Viet Nam Posts and Telecommunications Group. It has been revealed that the company has made significant and hugely costly investment mistakes.

Inspectors concluded that the State-owned company carried out a large number of projects during 2006-11 but many witnessed changes during their implementation process.

The progress of many of the projects was seven to eight months behind schedule, pushing up investment costs and leading to a decline in capital efficiency.

In providing telecommunications services, VNPT failed to assess development potential, competitor abilities and market and technology development trends. It didn't strictly obey regulations on investment order and procedures.

Consequences were, for instant, that the company's Cityphone project suffered losses with a redundant asset depreciation value of VND168.5 billion (US$8 million), and some cable projects saw material inventories of nearly VND70.5 billion ($3.4 million).

VNPT's north-south marine fibre optics line project, financed with Japan's official development assistance (ODA) of nearly VND3 trillion ($142.8 million), had seen progress delayed nearly 10 years.

This was a result of prolonged survey, design and assessment phases during 2004-07, as the company didn't correctly follow guidance of the Government, the Ministry of Information and Telecommunications and the Japan Embassy in Viet Nam.

VNPT investments in Vinasat satellite projects with a total of VND9.28 trillion ($441.9 million) successfully served national goals, but these projects failed to ensure business efficiency as they suffered an expected loss of VND329 billion ($15.7 million).

By December 31, 2011, the company had stakes in 86 other enterprises with a total capital contribution value of nearly VND3.3 trillion ($157.1 million) but many of these financial investments were hardly profitable.

The company also didn't strictly conform to Government and Ministry of Finance orders in withdrawing capital from several non-core lines of business at 11 units. The management of the Post and Telecommunications Finance Co was particularly weak, leading to great losses.

Inspectorate proposal

The Government Inspectorate said VNPT as well as its member units and individuals would have to be responsible for their mistakes, especially the faults they made in procurement and financial investment.

Inspectors proposed that the company should have to compensate the State budget to the tune of nearly VND106 billion ($5 milllion) worth of value-added and corporate income taxes, which it hadn't paid.

The inspectorate said on its website that Deputy Prime Minister Nguyen Xuan Phuc had agreed with the proposal in his document sent to relevant agencies on Wednesday.

Phuc asked the Ministry of Finance to guide the treatment of financial problems at VNPT, while demanding the Ministry of Information and Communications and VNPT review themselves and punish those who were involved in violations.

They would have to report results to Prime Minister Nguyen Tan Dung in September, he said.

Source: VNS