Officials in the northern Vietnamese city of Hai Phong have recently submitted a plan to build infrastructure for an urban zone that will house a new administrative hub, suggesting the central government earmark VND7 trillion (US$312 million) for its construction, amid national budget deficits.

The proposal is considered unreasonable and has raised public concerns, as Vietnam is suffering from a budget deficit.

The nation’s total expenditure in the first nine months of 2015 was VND824 trillion ($36.76 billion), VND141 trillion ($6.29 billion) higher than the period’s revenue, Vu Thi Mai, Deputy Minister of Finance, said on October 2.

According to the plan submitted by the Hai Phong People’s Committee, the total capital expense for the infrastructural development of the urban zone is VND10 trillion ($446 million), of which 30 percent would be paid for by the city’s budget with the rest to be funded by the central government, Le Khac Nam, vice chair of the committee told Tuoi Tre (Youth) newspaper.

The urban zone will sit on a total area of 324 hectares in the northern part of the Cam River, situated in Hai Phong’s territory, 30 of which will be preserved for a new center of political and administrative affairs, Nam said.

The plan is part of Hai Phong City’s development project which was established in 2003 and expected to be completed in 2025, according to Duong Ngoc Tuan, head of the municipal Department of Planning and Investment.

As part of the project, the construction of infrastructure, including roads, power and water supplies, and sewerage systems will be carried out in 2016 and funded by the proposed amount, he explained.

Duong Ngoc Tuan continues to support the plan by saying that the capital requested is appropriate given Hai Phong’s position as one of the country’s leading cities in terms of revenue contribution.

The money will be spent in accordance with the detailed schedule contained in the plan, he said.

Hai Phong is one of Vietnam’s centrally-controlled municipalities whose contribution to the national coffers in the first six months of 2015 was VND21.896 trillion ($967.7 million), ranking third after Hanoi ($3.23 billion) and Ho Chi Minh City ($3.96 billion), according to government statistics.

Building a new administrative hub is crucial for the development of the city 10-20 years from now, as the current scattered placement of administrative buildings and offices will not meet the future demands of the community, Vu Quoc Thai, deputy head of the Hai Phong Department of Construction, explained.

Opposition

Vietnam’s Ministry of Planning and Investment has not issued any official documents saying it approves the plan submitted to the government a month ago, Dao Quang Thu, the deputy minister, said.

Other locations besides Hai Phong have also put in similar requests but government leaders have not reached any conclusion as the country is facing a budget deficit and an increase in public debt, Deputy Minister Thu elaborated.

Under the Law on Public Investment, all plans have to be categorized into medium-term plans and the proposed capital outlay must be appraised by the Ministry of Planning and Investment and the Ministry of Finance, according to a finance official.

Congressman Tran Du Lich also expressed his disagreement by saying that the National Assembly should prohibit the use of national budget for the construction of administrative buildings for the next five years, as they are not counted as a form of investment.

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