Chinese contractors cause long delay in multimillion-dollar project

December 28, 2016 | 11:28

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The irresponsibility of Chinese contractors caused the long delay in the construction of the multimillion-dollar Thuong Kon Tum Hydropower Plant, located in the Central Highlands province of Kon Tum.

According to newswire Dantri, the project’s construction, invested by Vinh Son Song Hinh Hydropower JSC (VSH), was kicked off in late September 2009 with the total investment capital of VND5.74 trillion ($252.86 million).

The project was developed by a Chinese joint-venture contractor consisting of Hydrochina Huadong Engineering Corporation and China Railway Construction Co., Ltd.
The Chinese venture won the tender for building the penstock, which regulates the water flow, for VND1.61 trillion ($70.93 million), 44 per cent lower than the second contractor’s bid.

The date to develop the tender is 42 months. However, during construction, the contractors repeatedly demanded additional expenses racking up to VND800 billion ($35.2 million), which the Vietnamese investor rejected. In addition, the construction units of the project were behind schedule.

In July 2014, VSH announced ending the contract with the two Chinese contractors for their failure to carry out the work as committed. In August, the Chinese contractors submitted a petition to Vietnam International Arbitration Centre (VIAC) to ask for arbitration over the terms of termination.

In the second half of November 2014, VSH submitted a counterclaim to VIAC, demanding a compensation of VND1.33 trillion ($58.59 million) due to the long delay in construction, which the contractors rejected. In September 2015, the contractors withdrew their workforce and machinery to China.

The litigation is expected to occur on April 20, 2017 and the litigation’s result may be released by mid-year of 2017.

At present, the construction has been taken over by new contractors, namely Construction Joint Stock Company (JSC) 47, Song Da JSC, and a joint venture between a Vietnamese company and Robbins Company from the US. The project is expected to come into operation in 2018.

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