Saturday, June 21, 2014

China ODA withdrawal won't threaten infrastructure projects

Opinion

Updated June, 20 2014 08:59:01

Viet Nam has diversified capital sources for infrastructure projects, Dinh La Thang, Minister of Transport told the Thoi bao Kinh te Viet Nam (Viet Nam Economic Times)

Will transport projects be affected by the Chinese government's decision to ban state corporations from bidding for new projects in Viet Nam?

Viet Nam has pursued an economic policy of self-reliance and independence while trying to make the best use of external resources to speed up its national development process. At present, we have integrated deeper and wider into the world economy.

Our enterprises and investors are strong enough to undertake activities domestically and internationally. Vice versa, foreign investors, including Chinese investors are entitled to come to our country to do their business or to invest in areas which are allowed to under our laws.

Viet Nam has been rated by foreign investors as a potential market for its political security and stability.

China's decision to ban its state corporations from participating in new projects in Viet Nam, in my opinion, first of all, is detrimental to those corporations. They are denying themselves the opportunity to enter and take advantage of a strong market.

For us, I don't think the decision will have any major impact on our projects. Other foreign contractors will have more of an opportunity to win bids if fewer competitors submit their bidding dossiers. Furthermore, Vietnamese contractors are now strong enough to undertake transport projects. I'm proud to say the transport sector is the pioneer in applying state of the art technology across multiple projects.

On the other hand, we have diverse capital resources to invest in the transport sector. That of China is only a small portion. If we talk about ODA investment in Viet Nam, Japan ranks first, then followed by the WB, ADB and others.

In the case of Chinese contractors deciding to withdraw from Viet Nam, do you think their withdrawal will have negative impact on projects?

At present, only nine Chinese contractors with 17 packages - worth about VND 30 trillion (US$1.4 billion) are operating in Viet Nam (most of the projects have finished about 50 per cent of the workload). The Cat Linh-Ha Dong urban elevated train is funded by Chinese ODA. So, if in the case, Chinese contractors decided to terminate their work on the project, I don't think it will cause a big problem. Additionally, they cannot clear the payment for the unfinished work.

This exacts a big toll on them. The Ministry of Transport has asked the Chinese contractor to finish the project on schedule. In case they don't come back to Ha Noi, we will have to unilaterally terminate the contract and invite other contractors to replace them.

At the on-going National Assembly session, some deputies have raised concerns about the selection of Chinese contractors. They even said that the selection was to appease a certain interest group. How do you respond to that?

I don't think we have any solid grounds to say that. I should say all international bidding so far has followed the bidding standard operation procedures. However, I have to concede that due to our limited development resources, low bids has become an essential factor for us to select the winner. That's why with their low bids, Chinese contractors have won some contracts.

However, during the implementation process, we have to continue to further strengthen our institutions in order to eliminate the influence of interest groups.

What about the cases of low bids with 100 per cent of cost and time overruns?

There are different reasons leading to cost overruns. There are various factors that help projects finish on schedule, including money, land and the capacity of contractors.

Past experience shows that those three key factors have not been properly settled. As a result, a few major construction projects have incurred cost and time overruns.

I think that lessons learned from the past will help us do our job better in the future. — VNS

Original is here.

No comments:

Post a Comment