Vietnam to pay Japanese road builder $7.38 mln compensation for delay

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 The Nhat Tan Bridge that is coming up over the Red River in Hanoi

For the first time Vietnamese authorities will pay a foreign contractor compensation of nearly VND156 billion (US$7.38 million) after construction of a bridge in Hanoi was delayed.

City authorities will pay Tokyu Corporation after failing to clear required sites in time, leading to a 27-month delay in building a connecting road to the under-construction Nhat Tan Bridge over the Red River.

Tuoi Tre newspaper Wednesday quoted an unnamed source as saying that the Ministry of Transport has sought permission from the government to pay the compensation.

Tokyu was awarded the contract to build the road in Dong Anh District for more than VND 1.8 trillion, and it started the work in March 2009, planning to finish it in February 2012.

But it was only in March 2012 that Hanoi authorities acquired and cleared land for the road, and the deadline for completion was pushed back to May 2014.

The ministry will advance the money to pay the compensation and Hanoi will return it next year, the newspaper reported.

The bridge is estimated to cost nearly VND13.63 trillion ($644.82 million), with 74 percent of it coming in loans from the Japan International Cooperation Agency.

The Hanoi People's Committee was tasked with acquiring land and resettlement of displaced people.

Speaking to Thanh Nien earlier this week, Deputy Minister of Transport Nguyen Hong Truong said though most infrastructure projects in Vietnam are delayed, it is for the first time that a contractor has demanded compensation for delay.

As the first case of its kind, it needs to be "carefully" handled, he said, explaining that the ministry accepted the contractor's demand but also had to make sure that the taxpayer's money is used "reasonably."

In the case of this project, they did not only have to relocate people but also move a 200kV grid, he said in an explanation for the delayed site clearance.

The ministry and the city People's Committee are working together to identify the responsibility of various people for the delay, he said.

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