Scofflaw contractors get off scot-free in HCMC: inspectors

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Lax enforcement and investor mismanagement are letting hundreds of reckless contractors in Ho Chi Minh City off the hook, causing great losses to the city's budget, experts said.


Inspectors from the HCMC Department of Transport recently released a survey of 422 contractors (both foreign and domestic).


The investigators found that some firms have delayed the payment of city fines which date back to March, 2008.


The fines were estimated to be worth up to VND8.5 billion (US$436,121), according to the survey.


Contractors working on large government projects were found to be the greatest violators as well as the latest in paying their fines, the survey said.


Japanese-owned Shimizu, for example, was contracted to assist on a project to improve the city's water environment. The company topped the list of scofflaws with a total of more than VND827 million ($42,475) in overdue fines.


Other big contractors like Japanese-owned Obayashi and the VIC Construction Joint-venture Company also owe the city millions of dong, they added.


Deputy Chief Inspector Nguyen Bat Han said the contractor violations vary widely and include everything from failing to conduct their work in accordance with plans to damaging private residences and creating traffic problems.


Despite the agency's continuous written demands, very few of contractors paid their fines, according to Han.


However, Phan Phung Sanh, vice chairman of the HCMC Association for Construction Sciences and Technologies, argues that law enforcement agencies are somewhat responsible for the delays.


Sanh alleged that lax enforcement leads to the lax attitudes of those fines.


In fact, while heavier punishment for road traffic violations took effect on May 20, very few of the contractors were forced to address their violations, Sanh said.


He claimed that most of traffic inspectors asked violators to pay fines and fix the problems they had created without having any effective means of punishing those who failed to do so.


Truong Xuan Tam Esq. from the National Council of Lawyers said that current regulations allow the Chief Inspectorate of the HCMC Department of Transportation to force violators to pay fines by cooperating with banks to seize their assets.


Inspectors can also ask investors to dock the fines from the contractors pay checks, or confiscate their machines, Tam added.


Sanh also blamed investors, arguing that they have failed to supervise their contractors' conduct and aren't held responsible for contractors that persist in committing violations.


"Only strict contract commitments and investors' strict supervision can help stop contractors' violations right from the beginning," Sanh said.


In response to growing criticism, Han said they are drafting regulations for improving contractors' conduct.


The licensing process, for instance, willl be tightened according to Han. In the future, those contractors that fail to pay fines or persist in their violations will be prohibited from participating state-funded infrastructure projects, he said.

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