Vietnam president orders stop to imports of obsolete technologies

Applying cheap, outdated technologies in Vietnam cannot be tolerated as they are fuel-consuming and in the end, “the cost prices of our products are still higher than others,” the president emphasized at a meeting with executives of state-run corporations and enterprises in Hanoi.

“Regulatory agencies have amended relevant legal documents to solve this issue,” he said.

President Sang underscored the importance of keeping outmoded technologies away from Vietnamese major construction projects after Vietnam Electricity (EVN), the country’s state-run power giant, reported that Chinese firms have participated in many activities in the power sector over the last decade.

“Chinese businesses supply some 2 to 2.5 billion kWh of electricity to Vietnam annually,” Hoang Quoc Vuong, chairman of the EVN board of members, told the meeting.

Chinese contractors have also been constructing eight power plants and two civil seaports in the Southeast Asian country under the EPC (engineering, procurement and construction) scheme, Vuong added. Five of the power plants have been commissioned at a total capacity of 3,000MW.

“They are also contracted to work on five hydropower plants, and supply more than VND1 trillion (US$47.07 million) worth of equipment and materials for 19 construction projects,” Vuong said.

The total value of the construction, projects, and contracts Chinese contractors are participating in in Vietnam is more than $6 billion, the EVN official said, adding that disbursement has so far reached more than $3 billion.

There are two reasons behind the huge presence of Chinese contractors in Vietnam, according to Vuong.

“First, Chinese firms, thanks to active support from the government, always present attractive bidding plans.

“And their bidding prices are always lower than those of contractors from other countries, and even cheaper than what is offered by Vietnamese businesses,” he elaborated.

Even so, Chinese contractors are also associated with common shortcomings, Vuong added.

“Projects constructed by Chinese firms are usually behind schedule due to their poor ability and project management, compared to contractors from the G7 countries.

“The materials, equipment and technologies deployed by Chinese contractors are also of lower quality compared to more developed nations,” he said, adding that these result in instability and high risks for damaging construction.

EVN is thus taking steps to reduce the volume of electricity purchased from China from now to 2015.

“We are preparing alternative plans, which allow EVN to replace Chinese electricity with locally generated power,” he said.

The EVN official called on the government to create conditions and a mechanism for local contractors to supply locally manufactured equipment to the projects. The Vietnamese contractors, meanwhile, also have to improve their ability and competitiveness.

In response, the president admitted that “the government made mistakes” in letting foreign contractors outplay local businesses in projects on home soil.

“Letting others dominate our home market is a lesson of experience that must be learnt well,” he pressed.