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October 22, 2021, 2:15 pm

Vietnam imposes heavy sanctions on foreign contractors

(13:04:28 PM 07/01/2014)
(Tinmoitruong.vn) - The fact that a series of foreign contractors were punished for their violations has pleased domestic contractors, who always complain that foreigners receive big favors from government agencies and investors.


Local newspapers in November reported that the Ministry of Transport (MOT) showed its dissatisfaction about the slow implementation of the Hanoi – Lao Cai Highway project.

It was initially expected that the highway would be open for public traffic by the end of 2013. However, in the October report, supervisors said things still went very slowly with the A4 and A5 packages undertaken by South Korean Keangnam.

Relevant parties then denounced Keangnam of hiring unqualified sub-contractors, which led to the slow implementation of the packages. Meanwhile, Vietnamese sub-contractors complained Keangnam refused to make disbursement for the volume of completed works.

Deputy Minister of Transport Nguyen Hong Truong said Vietnamese agencies had a working session with the holding company of Keangnam, during which MOT requested the South Korean contractors to fulfill its works as committed.

Truong then threatened to apply necessary measures to punish the main contractor for breaking the contract. If necessary, the contractors would be prohibited from joining the bids for the next projects.

In the latest news, Dai Doan Ket has reported that MOT has cut down the volume of works of the two big packages assigned before to Keangnam.

The decision has been applauded by Vietnamese contractors, who affirm that the quality of the construction works must be the top priority when selecting contractors.

On December 26, 2013, VEC (Vietnam Expressway Corporation), as the investor of the HCM City – Long Thanh – Dau Giay Highway project, decided to discipline 11 individuals and 3 teams for the construction items which were not done properly as designed.

VEC served a strong warning to some individuals, including the project director Tatsuya Okamura, Sang Hoon Lee – director of the package No. 3 from South Korean POSCO E&C and some other Vietnamese.

It has suspended Cho Yang Cook, the execution director of the package No. 3, and some other Vietnamese, requesting to fix the problems.

POSCO E&C received the warning from VEC, while the consultant – supervisor Nippon Koei – Tedi South received criticism. The contractor and the consultant – supervisor have to spend their own money to fix the problems and replace the construction items improperly built.

Can Hong Lai, General Director of CIENCO 1, a construction and installation corporation, said Vietnamese enterprises can only work as the sub-contractors for foreign main contractors in the projects funded by ODA (official development assistance) capital.

The projects include the Noi Bai – Lao Cai Highway, Hanoi – Hai Phong, HCM City – Long Thanh – Dau Giay, Nhat Tan Bridge, the Hanoi – HCM City railway…

“The projects’ rate of progress has never been going as scheduled,” he noted.

Lai said foreign contractors have been favored because of their financial capability and the experiences from similar transport projects.

However, in fact, a lot of the contractors do not have the high capabilities as they try to show off. The contractors, through the third parties, obtain the right to implement the projects by offering low prices. After winning the bids, they usually outsource the works to domestic contractors.

Compiled by C. V

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