Bad contractors

A lot of foreign contractors with low capacity still win bids to implement large ODA-funded (official development assistance) projects in Vietnam. The Ministry of Transport (MOT) reportedly sees the problem clearly, but doesn’t know how to handle it.

Analysts said in many cases Vietnam has to accept bad contractors because this is the requirement set by the projects’ funders. However, Dr. Nguyen Dinh Tham from Hanoi Civil Engineering University, believes the problem is in the bad management capacity of the Vietnamese side.

Tham said he can see many loopholes in the contracts signed between Vietnam – the investor – and the contractors. 

In principle, priority is given to ODA receivers to choose main contractors for implementing projects based on FIDIC (International Federation of Consulting Engineers) international bidding principles.

The lenders take the responsibility of announcing the bids and choosing capable contractors to implement projects. Meanwhile, MOT, as the owner of the project, has the right to request the lenders to strictly follow standard requirements when choosing major contractors.

FIDIC provides detailed information about the ways to assess contractors’ capability and choose suitable contractors. MOT has the right to ask the lenders not to choose incapable contractors. It can also refuse the requirements set by the lenders, if the chosen contractors are incapable but still win the bids.

However, despite the strict regulations, many incapable foreign contractors still win bids to implement ODA projects. These include the “big guys” such as CRSG (China Railway Sixth Group Co.,Ltd), Namkwang-Sampyo and Lotte Technique & Construction.

All three contractors still continue to undertake large-scale key projects in Vietnam despite many troubles with the Cat Linh – Ha Dong railway, Ha Long – Mong Cai highway and Da Nang – Quang Ngai highway.

Why do contractors always do well with other projects, but they are remiss with projects in Vietnam?

According to Tham, this can be attributed to  loopholes in the contracts and the poor management capacity of Vietnamese investors.

How should bad contractors be treated?

In early January 2015, MOT’s Minister had a working session with CRSG, criticizing the Chinese contractors for a series of accidents occurring during the Cat Linh – Ha Dong railway project.

However, analysts commented that the move is not enough to deter incapable and irresponsible contractors.

“Vietnam should say ‘no’ to the contractors and debar them from implementing other projects,” Tham said.

While admitting that “this is a difficult work to do”, he emphasized “this still can be done”.

Dat Viet