KfW, a German development banking group, has just claimed that the funds they gave to Vietnam’s preservation project for Phong Nha Ke Bang National Park has been mismanaged. The project, which was started on October 2008 was intended to maintain biological cohesion, help develop buffer zones to sustainably preserve natural resources in the park, which is a UNESCO-designated world natural heritage site, and reduce poverty for as many as possible of the 56,000 residents living there. KfW pledged a budget of EUR12.63 million (US$16 million) to make that possible until its completion on 2016. The funds were given to the central province of Quang Binh, where the park is situated, and put the Phong Nha Ke Bang park administration board under its management.

However, after nearly two years of implementation, many works of the project have become stagnant, several plans were never carried out, and the milestones they have set became long overdue. Under the project, 4,250 hectares of forest have to be developed and over 11,000 hectares of the existing forest have to be protected, of which total 600 hectares have to be developed and protected by 2010. Until now, no trees have been planted.

With the unproductiveness seen, KfW had decided to stop funding its pledge for the Phong Nha-Ke Bang nature conversation project. On several instances on 2009, the financial group had requested the board for records of its disbursement. But such was not met. On June 14 of 2010, KfW decided to send a letter to the province People’s Committee and Department of Planning and Investment, and the management board, asking the board to return what is left of the EUR200,000 which is yet to be disbursed from the EUR360,000 ($457,500) budget set for 2009.

In the letter, the bank stated that the province and the board failed to meet their commitments and have violated agreements they have signed. They claimed that the board has not reacted effectively to clearance and burning of natural forest in the buffer zone, and taken the initiative in management of the project. The notes also stated that the board disbursed EUR114,000 ($145,200) from the fund but spent nearly VND6 billion ($308,400) of corresponding funds from the provincial budget. They added that the management board has been too dependent of state budget.

Along with the news of requesting a refund, the bank had also put a halt on releasing budget for project activities lined up for 2010 such as expanding the park, planting and recovering forests, and building a biodiversity corridor. KfW’s withdrawal from the project will remain until the management capacity of local authorities is raised.

In a provincial government meeting following KfW’s announcement, the Quang Binh People’s Committee said that the projects set were complicated, thus, the management board were not able to handle them well. The Phong Nha-Ke Bang National Park covers 85,000 hectares, including the oldest limestone mountain range in Asia. It is also known as home to abundant limestone formations. Apart from a popular tourist destination, the park is an ideal site for researchers to explorers on its numerous grottos and caves. The entire area indeed helped the economic segments of the province and its population. With the budget for its development now compromised, the pace of its advancement would also start to look cloudy. On how the board and the provincial authorities will deal with the budget issue with KfW, we yet have to find out.