Complicated
capital disbursement procedures have prevented construction firms from
reclaiming debts from investors, even years after their projects finish.
Vu Tuan Duong, vice general director of
construction corporation Licogi, said his firm has yet to receive VND20
billion, or nearly US$1 million, owed to it by the investor that hired the firm
to build a new terminal at Noi Bai International Airport in Hanoi. The project
was completed in 2001.
He said it was common for investors in
construction projects, particularly transport infrastructure, not to pay
construction firms until years after the projects finish.
“Due to overlapping investment, some investors
are unable to arrange enough capital for their projects,” he said. “This has
affected their ability to pay construction companies that win bids for their
projects. Meanwhile, investors from some state-invested projects have to wait
for a long time for higher authorities to approve their capital disbursement
plans.”
Rigid regulations regarding project transfer,
and obstacles in site clearance procedures, have also slowed payments made by
investors, Duong said.
His firm conducted part of the construction of
the new National Highway No. 5 two years ago.
After finishing the work, the company had to
wait for the investor to find contractors for other parts of the project before
it could receive payment.
Duong explained that such payments are
conducted only when a project can be handed over from his firm to the new
contractor. Many investors also face difficulties accessing bank loans for
their projects, he added.
Ho Van Dung, general director of Song Da No.
2, said the construction firm is now implementing the Ban Ve hydropower plant
project in Nghe An Province, but the investor is also finding it difficult to
pay.
“You’ll never know how many difficulties
construction firms go through,” he said. “Investors do not pay their debts for
years, and we have to borrow capital from banks at high interest rates just to
pay our workers’ salaries each month.
“We rarely receive payment of whole debts, let
alone their interest,” Dung said.
Some industry insiders said investors are
never fined for slow payments and lawsuits on the issue are expensive and time
consuming.
On the other hand, construction companies want
more work from the investors and are unlikely to cause a stir about the
problem.
Tran Trong Dien, vice director of Vinaconex
Xuan Mai, said his firm has also faced the problem. However, in recent years,
it has agreed only to projects in which the investors are bound to conduct
payment just after receiving products or finishing projects.
“This could give us fewer customers. However,
profits are guaranteed, and capital could be rapidly reclaimed, helping us
start on other projects easily.”
Vu Gia Quynh, general secretary of the Vietnam
Association of Construction Tenders, said it is necessary to draft a contract
law, so that the relationship between investors and tenders can be more equal,
and the capital for projects should be guaranteed by banks, he said.
Duong of Licogi said the most important thing
to construction companies is checking investors’ financial capacity, and
offering strict regulations in contracts to avoid risks when implementing
projects.
By Bao Van, Thanh Nien News
Business & Investment Opportunities
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