Unexpected twist in Hanoi's water pipe scandal as new supplier may lose deal

Thanh Nien News

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Song Da water pipeline in Hanoi has broken many times since 2012. File photo Song Da water pipeline in Hanoi has broken many times since 2012. File photo


It is like a leak that cannot be controlled easily.
Just when Hanoi was getting ready to move past a mortifying water pipe scandal that had seen multiple criminal charges, new controversies began to flood in. 
Soon after a Chinese company won a contract to provide new pipes for the rupture-prone system, local officials now question if it's even the right choice. 
The central government on Wednesday agreed to the city's request to intervene and delay the purchases from the company to conduct more thorough quality tests.
Viwasupco, the water utility subsidiary of construction firm Vinaconex, last month chose Xinxing Pipes International Development Company as the supplier of ductile iron pipes for its Song Da water pipe system, whose existing fiberglass pipes kept broken.
But the city believed Viwasupco should do more research after the Bidding Assistance Center at the Ministry of Investment and Planning said ductile iron pipes supplied by Xinxing for several projects in Vietnam “have not satisfied customers.”
The center said there have been negative responses about the quality from some customers in other countries as well.
A Hanoi spokesman said the city has suggested that Viwasupco hire a capable international consultant to assess Xinxing’s pipes again. If the result is not satisfying, it has to restart the bidding process to select a new supplier. 
Lack of transparency
Amid the growing concern, there have also been claims that the tender process lacked transparency. 
A statement from Viwasupco last month said Xinxing won the contract to supply pipes for the project, beating out other 20 companies. Xinxing set its price at US$26.3 million, 12 percent less than the cost approved for the pipe supply package, it said.
The company was supposed to deliver the pipes this May, according to Viwasupco.
A source from Jindal Saw-Newtatco, the Indian company that lost the contract to Xinxing in the final round, said it was not happy with the bidding process.
There seemed to be “a lack of transparency,” the source told Tuoi Tre newspaper, pointing out unusual developments.
Only four companies submitted bidding application forms, including Jindal Saw, another Chinese company Hydrochina Corporation and French Saint-Gobain PAM, although 21 bought the forms in the first place.
The other two were eliminated soon after that as they were said to have not provided enough documents.
Jindal Saw’s source said the other bidders are experienced companies and such mistakes were hard to explain. 
The new water pipe line, which will cost a total of $53.7 million to build, will run 21 kilometers to provide tap water for nearly 200,000 families in Hanoi.
Local media counted that the current system, which cost $70 million, has broken 17 times since 2012, three years after the pipe was installed, although it was supposed to last at least 50 years.
Nine former executives from Vinaconex have been prosecuted as the ruptures affected around 70,000 families every time.

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