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Chinese pipeline supplier wins contract for Hanoi water project at discounted price

Wednesday, March 23, 2016, 16:03 GMT+7

A Chinese company has won a contract to be the pipe supplier of a major clean water project in Hanoi, raising quality concerns over the bid price.

Vietnam’s Viwasupco said on Tuesday it had awarded the ductile iron pipe supply contract for the Song Da Water Project - Phase II to Beijing-based Xinxing Co. Ltd., after “a careful contractor selection.”

The project is “an important service for supplying clean water to people in Hanoi, ensuring livelihood security and social stability,” the developer said on its website.

Xinxing won the contract with a bid price 11.8 percent lower than what the developer sought, Viwasupco general director Nguyen Van Ton admitted.

But the developer explained that the tender application of the Chinese firm had actually been carefully assessed by two of the project’s consultant firms, and approved by the company’s board of directors.

The Song Da Water Project transmits clean water from the Da River Water Plant in the northern province of Hoa Binh to Hanoi.

The second phase of the project is intended for the supply of clean water to such urban areas as Son Tay, Hoa Lac, Xuan Mai, Mieu Mon and Ha Dong in the capital city.

The first phase of the project is infamous for suffering from repeated pipeline breaks. The latest rupture, the 17th since December 2012, occurred on December 31, 2015, causing a clean water shortage for thousands of Hanoi residents.

Viwasupco said it had “learned from the experience of the first phase of the project” in selecting the pipeline supplier for the second stage.

Quality concerns always arise whenever a Chinese firm wins a contract to complete large-scale infrastructure projects in Vietnam.

Chinese contractors are known for bidding low to win contracts, then later asking for more money, citing unexpected cost overruns. Most Chinese-contracted projects are likely to reach completion behind schedule, requiring further costs.

The infamous Cat Linh – Ha Dong urban railway project in Hanoi, for instance, is expected to cost 57 percent more than first thought.

China Railway Sixth Group is the EPC (engineering, procurement, and construction) contractor of the project, initially estimated at US$553 million, but total investment has already risen to $868 million.

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