Vu Hong Thanh, head of the National Assembly’s Economic Committee, has said debt owed to contractors of construction projects under a rural development program in 53 provinces and cities had amounted to VND15.27 trillion (US$685 million) by end-January.

The Red River Delta, north-central and northern mountainous regions accounted for a majority of the debt, Thanh said at the NA Standing Committee’s a review conference on the 2010-2015 implementation of the program in Hanoi on Wednesday.

Provinces with high debt include Bac Ninh with VND1.63 trillion, Thanh Hoa VND1.55 trillion, Thai Binh VND1.23 trillion, Vinh Phuc VND919 billion, Nghe An VND887 billion, Hai Duong VND879 billion, Ninh Binh VND770 billion and Ha Nam VND757 billion.

Notably, some localities had become insolvent, such as Phuoc Long District in Bac Lieu Province with debt totaling VND397 billion.

As many as 3,637 communes nationwide owe VND4.2 billion each on average. Fifteen localities account for 80.7% of total debt and the Red River Delta and north-central regions make up 75.3% of the total.

The communes meeting the new rural standards had owed a combined VND7.15 trillion as of January 31. Of them, 1,147 reported debt of VND6.24 billion each on average.

The transport sector made up 30.8% of total debt, irrigation 5.5%, schools 23.3%, cultural facilities 12.7% and others 27.7%.

District and commune budgets are responsible for debt payments. According to a Ministry of Agriculture and Rural Development report, they are responsible for 76.9% of debt owed by Thanh Hoa Province and the percentages are 72.6% in Nghe An Province, 89.6% in Quang Binh Province and 80% in Thua Thien-Hue Province.

The report pointed out a number of reasons behind hefty debts such as low proceeds from land auctions, lower-than-expected financial allocations for the program, and weak management of public investment projects.    

NA vice chairman Uong Chu Luu told the conference that it is hard to deal with debt between now and next year given the tight State budget.

Luu proposed reviewing statistics about debt owed by construction projects due to the gap between data of the Government and that in the report of the agriculture ministry.  

NA chairwoman Nguyen Thi Kim Ngan said localities have been in a race to carry out construction projects but have not invested in agricultural production adequately to improve quality and add value.

Speaking at the conference, Minister of Agriculture and Rural Development Nguyen Xuan Cuong said the debt of over VND15 trillion is not big compared to over VND1,000 trillion set aside for new rural development projects. But the problem is that the debt is mainly owed by a couple of localities.

Cuong said he would urge those localities to find ways to pay debt.

SGT