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Inspectors scrutinise unauthorised projects

Vientiane Times, 20th April 2018

Multiple infringements of financial principles and laws have been exposed in Laos after inspectors scrutinised unauthorised projects carried out by State departments.
Inspectors have confirmed that the land-locked country has lost millions of US dollars from the misuse of State budget as a result of the unauthorised projects.
According to the Ministry of Planning and Investment’s Inspection Department, 129 unauthorised projects amounting to almost 2 trillion kip were examined last year.
Of the total figure, 114 projects (with a total investment value of 1.89 trillion kip) were carried out by provincial authorities.
An official from the State Inspection Authority, Mr Phonekeo Sihomvong, told Vientiane Times on Thursday that many State departments have breached budgetary and financial principles.
“The construction cost of many unapproved projects is too high and exceeding realistic amounts. This problem is related to the fact that many projects are conducted without bidding processes,” he said.
Inspectors also exposed misuse of State budget with some officials spending on their personal affairs while some State departments revised project activities to heighten the cost of construction.
Over recent years, the government has announced a halt to projects without approval from the National Assembly as part of efforts to control the nation’s debts.
The move comes after the government’s assessment of the effectiveness of unauthorised projects, highlighting that many had triggered large amounts of debt and caused great damage to the nation.
Despite the government’s restrictions, numerous unauthorised projects have still been carried out by State departments, notably those related to disaster recovery and emergency operations.
Over the past a decade, provincial authorities granted permission for local companies to pay upfront for development of State investment projects, particularly infrastructure, which the government repays at a later date.
Nonetheless, the government has been unable to repay the companies promptly after many projects have been conducted, affecting the local economy and companies’ financial viability.
In addition, the government has accumulated huge debts as a result of unapproved projects which could affect the national economy in the long run.
According to an IMF report, the national level of public and public guaranteed debt is projected to rise from 61.1 percent in 2017, to 65.3 percent in 2018, and to 65.9 percent in 2019. Laos’ GDP was valued at US$16 billion in 2016.  According to a report from the Ministry of Planning and Investment, about 180 unauthorised projects were recorded in 2013-14 and 2014-15.
Under the evaluation of unapproved projects, the government ranked them from A (the highest) to F (lowest). Among the total 180 projects, 26 are rated as F projects.
Inspectors urged government departments to use the State budget more efficiently to ensure revenue was used for priority programmes that boosted economic growth and poverty reduction efforts.

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