The southern city of Ca Mau is facing a debt of VND300 billion (USD14.2 million) and particularly can’t afford to pay the salaries of local state employees.

Ca Mau City has one of the highest economic growth rates in the Mekong Delta region with several major infrastructure projects. However, the city recently shocked the public with its budget report.

A corner of Ca Mau City

According to the report, in 2012, the city’s budget revenues reached VND494 billion (USD23.5 million), but sending was up VND555 billion. The city also saw a budget deficit of VND90 billion in 2013.

Huynh Thanh Dung, Vice Chairman of the municipal people’s committee, said that over the recent years, the city had failed to reach its budget revenue targets, leading to the budget deficit.

“Ca Mau has set a goal to become a centrally-controlled city by 2020 so we have been developing several major infrastructure projects. The province allocates an annual budget of VND40 billion for infrastructure development, which is not enough. Meanwhile, the failure to fulfill the budget revenue target has added to the city’s fiscal pressures,” Dung said.

The city owes debts to several contractors which have carried out local infrastructure projects. It also owes the provincial Social Insurance VND11 billion and has debts with some other local companies.

Nguyen Tan Van, Director of Ca Mau Urban Environment Ltd. Co., said that the city has not yet paid his company VND14 billion for urban hygiene, lighting and tree and park care.