Japan contractor denies compensation claim in Vietnam project

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A Japanese road builder has rejected news reports that it had asked Hanoi authorities to pay VND155 billion (US$7.34 million) in compensation for delaying a project with sluggish site clearance.

On Friday, the Ministry of Transport's online news website Giao thong van tai (Transport) quoted Hiroshi Asakami, the project manager of the Japanese-owned Tokyu Corporation, as saying that the money was actually additional fees caused by changes in the scope of works.

Asakami was speaking at a meeting with minister Dinh La Thang Thursday.

Tokyu was contracted to build a road leading to the bridge that will span the Red River when it is completed next year.

Local newspapers have reported that Tokyu demanded to be paid VND155.9 billion after Hanoi authorities failed to provide it with clear land in time, forcing the road project's deadline to be pushed back to May 2014, meaning a 27-month delay.

According to Asakami, Tokyu has never asked for compensation or penalty.

He said that changes in the scope of works that resulted in the additional fees had been carefully reviewed and discussed between Tokyu and the investor, the ministry's Project Management Board 85, adding that the parties have also signed contract appendixes. 

The incorrect information reported by Vietnamese newspapers has affected Tokyu's prestige and its efforts to build long bonds with Vietnam, Asakami said.

The Vietnamese Transport Minister and local related agencies need to clarify and correct the information with the press quickly, said the Tokyu manager.

Nguyen Thanh Van, director general of the Project Management Board 85, also said the Japanese contractor never demanded compensation for delayed site clearance.

He said the management board will investigate and punish those who made incorrect statements.

Meanwhile, Minister Thang said it was "normal" for work increases during the construction process, and that the Nhat Tan Bridge is not the only case.

Reports about Tokyu's alleged compensation claim first appeared in January, after Deputy Transport Minister Nguyen Hong Truong announced at a meeting with Hanoi People's Committee that the Japanese company had asked city authorities to pay VND200 billion for postponing its project with delayed site clearance.

Earlier this week, Tuoi Tre (youth) newspaper quoted an unnamed source as saying that the ministry has asked the Prime Minister for permission to advance the money from the project's funds.


Hanoi authorities tasked with acquiring land and resettling displaced people will return it from the city's budget next year, according to the newspaper.

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 Nhat Tan Bridge project is funded with an investment of VND13.6 trillion ($650.55 million) from the Japan International Cooperation Agency and the Vietnamese government.

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