Vietnam - Transport Minister gives a warning to foreign contractors

VietNamNet Bridge – If foreign contractors do not maintain the right pace of construction, they will have to claim entire responsibility, under contracts signed with Vietnam, said Minister of Transport Dinh La Thang.

Thang made the statement because of the slow construction of the three highways: Noi Bai – Lao Cai, Hanoi – Hai Phong and HCM City – Long Thanh – Dau Giay. Foreign contractors won tenders to build up to 90 percent of the workloads of these projects.

Thang said that foreign contractors bear the biggest responsibility for the low pace of these projects.

The project that is implementing at the slowest speed is Noi Bai-Lao Cai. This highway is 244 km, built at the cost of nearly VND20 trillion ($1 billion). Capital for this project is ADB’s loan and Vietnam’s reciprocal capital.

This project is carried out by Posco E&C, Doosan, Keangnam Enterprise of South Korea and Guangxi Bridge and Road Company of China.

The project was kicked off in September 2009 and is scheduled for completion in 2013. However, only the Guangxi Bridge and Road Company implements their package deal at the right pace.

Mr. Mai Anh Tuan, general director of the Vietnam Highway Development Investment Corporation (VEC), the investor of this project, said contractors are week at capability and they did not have sufficient equipment. The weakest contractors are Posco and Keangnam.

“Equipment and materials meet only 50 percent of the requirement. They also lack on-the-site managing employees. Two contractors had to change project directors. VEC met with contractors many time to seek solutions but the time is running out while the workloads remain huge,” Tuan Anh said.

Notably, Keangnam has just completed only 5 percent of the total workloads while it has changed three project managers. Tuan Anh said that VEC would ask the Ministry of Transport and the donor to replace Keangnam contractor by a new one.

Tuan Anh noted that financial ability of foreign contractors is much poorer than their commitment. As a result, they had to rely on advanced payment by the investor or appropriated capital of sub-contractors.

Mr. Lee Sen Hoon, director of Posco E&C, said that slow site clearance and irregular weather in Vietnam hindered this contractor from building at right pace.

However, the chief advisor Frahcisco Favier de Bonifaz of the Gentisa Consulting and Supervising Company (Spanish), rejected Lee Sen Hoon’s explanation, saying that the package deals of Posco and Keangnam contractors are implemented slowly because these contractors hired too many sub-contractors. Doosan hires 20 sub-contractors while the Guangxi Bridge and Road Company uses only three contractors, and most of equipment and machinery were not used. Sub-contractors usually hire untrained local workers, even farmers to build roads.

Minister Thang confirmed to not extend the deadline for these projects. If contractors do not implement their deals at the committed pace, they would have to bear full responsibility under signed contracts.

Vu Diep

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