Vietnamese Minister of Industry and Trade Tran Tuan Anh, during a recent visit to China on September 13, had a talk with Chinese Commerce Minister Gao Hucheng, in which he mentioned problematic projects with Chinese contractors.  

Anh asked the Chinese Ministry of Commerce to instruct Chinese enterprises, which are now EPC (engineering, procurement, construction) contractors of projects to join forces with Vietnamese investors to deal with outstanding problems.

The projects include the Ninh Binh fertilizer plant, the second phase of the Thai Nguyen steel mill and Nhan Co Alumin plant in Dak Nong province. 

The Ninh Binh fertilizer plant, capitalized at VND12 trillion, has reported a loss of VND2.7 trillion. Vinachem, the investor, has took the right to operate the plant from the EPC contractor in September 2012. However, after 11 rounds of negotiations, the finalization has not been made.

Regarding the Thai Nguyen steel mill, Chinese MCC in 2007 was appointed the EPC contractor and it had 30 months to implement the contract.

Slow pace, inefficiency and higher-than-expected investment capital are the common characteristics of projects related to Chinese contractors.

However, the project remains unfinished in the last 10 years, while the required investment capital has been raised from VND3.8 trillion to VND8.1 trillion. In June 2012, contractors stopped the project execution and left, leaving assets worth VND4.5 trillion under the sun and rain.

The list of scandalous projects with participation of Chinese contractors also includes the Cat Linh – Ha Dong elevated railway, which kicked off in 2011 with investment capital of $552 million, of which $169 million came from Chinese ODA. 

However, in November 2014, the required investment capital was unexpectedly raised to $868 million, or $300 million higher than the initial investment rate.

An expert commented: “I cannot understand why Vietnamese agencies still have not learned the lessons after so many troubles occurred with the projects related to Chinese.”

What lessons?

The water pipeline that brings water from Da River to Hanoi has broken 20 times so far. Outdated Chinese technologies and careless work have been blamed for the repeated incidents. 

However, in early 2016, Viwasupco, the investor, once again chose a Chinese contractor – Xinxing – for a package of providing materials for the second phase of the water supply project.

The investor canceled the decision after facing strong opposition from the public.

In the latest news, the chair of Quang Ninh province has refused a loan worth $300 million from China to build the Van Don – Mong Cai Highway in Quang Ninh province.

Luong Bang