Vietnam ministry names poor Korean, Chinese contractors

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An elevated railway under construction in Hanoi. The Chinese contractor has asked for an additional $339 million, a 61 percent bump in the projected costs. PHOTO: NGOC THANG

Many Chinese and South Korean contractors have dropped the ball on infrastructure projects in Vietnam, according to recent rankings by the transport ministry.

A list released last week of 475 contractors identified 57 builders as not meeting construction requirements, including Korean Keangnam, Posco and Hanshin.
Keangnam and Posco were hired to build the expressway from Noi Bai international Airport in Hanoi to the border province of Lao Cai while Hanshin was tapped to build the Ho Chi Minh City – Long Thanh – Dau Giay expressway.
The companies were ranked on categories ranging from their ability to mobilize staff and equipment, follow schedules, guarantee safety, settle payments and provide follow-up service after project completion.
Project investors and managers were also included in the rankings, which the Transport Ministry began in 2012 following various project delays caused by poorly organized contractors.
Keangnam failed to mobilize the matching funds it committed during the bidding process and relied on monthly disbursements from its investors instead. It has delayed work while trying to look for cheap sub-contractors, workers and equipment in Vietnam.
The assessment has been conducted every year to prevent non-perfoming contractors from getting further bids.
The ranking found nearly 81 percent, or 383 contractors, met the proper requirements, while the other 35 were ranked "average." 
The underperforming Chinese firms identified in the rankings included Guangxi Construction Engineering Group, China Road and Bridge Corporation, Zhongxing Telecommunication Equipment Corporation, and China Railway Sixth Group Co. Ltd. – a state-owned enterprise.
The latter caught flak in Vietnam's media spotlight last month for delays on the Cat Linh – Ha Dong elevated railway project in Hanoi that caused a US$339 million or 61 percent cost bump.
Several Vietnamese state-owned construction firms also made the black list, including Civil Construction Engineering Corporation (Cienco) No.8, the Vietnam Waterway Construction Corp. (Vinawaco), and Vietnam Construction and Import-Export JSC.
The Transport Ministry said, early this year, that several Cienco units and Vinawaco will be privatized this year to improve their operations.

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