Thailand
Laos: Govt suffers losses from double-funded projects
Vientiane authorities uncovered nine duplicate-funded development projects in 2017, resulting in the government losing 4.9 billion kip, according to the capital’s recently published annual report.
The problem involves Vientiane or provincial departments initially requesting funding for development projects from the government, which takes a long time to approve.
In the meantime, some departments obtain funding from other sources such as developers or other government bodies. In numerous cases, the government has in due course approved the original funding requests which result in the projects ‘double dipping’ for financing.
Inspectors say that lack of coordination between government sectors is the main cause of this double financing of projects.
An official from the State Inspection Authority, Mr Phonekeo Sihomvong, told Vientiane Times it appeared to him that this occurred when provincial authorities made a proposal to government sectors that were paid by two sources.
Companies that undertake State-invested projects for a province sometimes receive the money directly from the Ministry of Finance under a debt-repayment scheme.
But the finance ministry failed to promptly inform provincial authorities so they kept asking for more money to pay for projects carried out in their provinces.
Such duplicate-funded projects not only occur in Vientiane but have also been reported in the provinces, accounting for about 20 percent of all State-invested projects.
In Vientiane, authorities examined 21 targeted State-funded projects in 2017, of which nine were discovered to have received duplicate funding.
As part of efforts to boost economic growth, inspectors have been looking into issues surrounding investment, enforcement of the PM’s Order No. 15 on timber exports, and various illegal activities.
They found that two companies failed to pursue agreements they had signed with Vientiane.
Authorities have been enforcing Prime Minister’s Order No. 15, issued in May 2016, and found that about 700 cubic metres of illegally harvested wood had been removed.
Authorities also inspected 444 furniture workshops and found that 94 were operating without a business licence.
Officials said the PM’s Order was a key instrument in combatting deforestation and the illicit timber trade mafia who had been hiring local people to cut down trees and sell the wood to traders.
According to the report, the illegal issuance of land titles, notably for land concessions, had resulted in a great loss of revenue for the government.
Vientiane has 481 villages in nine districts, with a total area of 3,920 square metres and a population of over 850,000.
As the capital of Laos, Vientiane is the main source of national revenue and a key destination for foreign investment, especially in real estate.
In 2017, 1,103 billion kip in revenue was amassed, equal to 94.12 percent of the target, while over 657.33 billion kip was spent in this period, equalling 97.8 percent of the target for 2017.
Inspectors urged Vientiane authorities to use the State budget more efficiently, to ensure revenue was used for priority programmes that boosted economic growth and poverty reduction efforts.
Source: http://www.vientianetimes.org.la/FreeContent/FreeConten_Govt.php