Vietnam reviews bid packages of South Korea’s Posco after ex-CEO arrest

A section of the Noi Bai-Lao Cai expressway, which links Hanoi to the northern province of Lao Cai,
is seen in this file photo.

The Vietnam Expressway Corporation (VEC) has been tasked with re-examining all Posco’s bid packages related to its expressway projects, Deputy Transport Minister Nguyen Hong Truong told Tuoi Tre (Youth) newspaper at a press conference in Hanoi.

The order came after the former CEO of Posco E&C, a company member of the Posco Group, was arrested on alleged charges of embezzlement, Truong said, citing South Korean media.

The CEO was said to embezzle his company’s money while implementing many construction projects in Vietnam in the 2009-2012 period.

These projects included a number of expressway projects developed by the VEC, Truong added.

The Vietnamese transport ministry has so far received no confirmation from South Korean authorities as well as Posco about this issue, according to the deputy minister.

But the ministry still asked VEC to review all the contracts signed with Posco as well as payments having been made to the group in preparation for response in case the South Korean side questions the issue, the official said.

In 2009, Posco won three of the eight bid packages of the VEC’s project to build the Noi Bai-Lao Cai expressway, which links Hanoi to the northern province of Lao Cai, deputy minister Truong said, adding that the project was completed in 2014.

The bidding was conducted through the international competitive bidding procedure, and the Posco’s bid-wining prices were 15-30 percent less than the estimated prices, Truong said.

The group also carried out two packages of the project to build the Ho Chi Minh City-Long Thanh-Dau Giay express, which links the city to its neighboring Dong Nai province, and the two packages were completed in 2013 and 2014.

Similarly, the international competitive bidding procedure was applied for the bidding and the Posco’s bid-winning prices were 15-30 percent less than the estimated prices, VEC said in a notice issued on Friday.

“Regarding the information that a former leader of Posco E&C set up a fund to pay for sub-contractors and suppliers, VEC has yet to receive any official information from the South Korean authorities about this issue,” the notice said.