Mammoth project refuses domestic contractors

CA - Vietinbank plans to start construction on the 30,000 square metre complex in Hanoi on October 20. The contractors will be famous foreign construction groups, not Vietnamese contractors.

The 68-story complex of offices, a hotel, a shopping mall and high-grade service centre, with initial investment capital of $300 million, is designed by Norman Foster, the world’s leading designer who built the Almaty twin towers. Together with Foster in Vietinbank’s project will be the consultant and supervisor from the US, who worked on the Dubai tower project and China’s CCTV television tower.

Vietinbank Chair Pham Huy Hung observed that the bank will organise an international bidding event to choose contractors. It is very likely that contractors from South Korea, such as Kumho or Hyundai, will be chosen.

Inviting foreign contractors is now a rising trend in Vietnam. As for infrastructure projects, the top choice is companies from China. As for civil engineering projects, especially privately-run, high grade office or apartment projects, real estate developers regularly choose contractors from Europe, the US, South Korea or Singapore.

“Frankly speaking, the design capability of domestic architects is by far inferior to foreigners, especially when implementing modern high building projects. The same situation can be seen in construction. Vietnamese contractors cannot build 70-80 stories, they can only build 30 floors or less,” Hung explained.

Hung traveled to many countries to learn about design and construction supervision processes. He maintained that he has been persuaded by the works of Norman Foster and those of Turner of Hyundai and Kumho.

Hung most likes foreign contractors because they work professionally in a transparent way with no deceitfulness. Therefore, even though the design fee is very high at five percent and supervision consultancy fee is two percent of the investment capital, Vietinbank still feels satisfied with their services.

Vietinbank does not intend to choose a domestic contractor to provide materials for the project. Hung traveled to some countries and brought back a lot of catalogues to Vietnam for consideration and selection.

According to VnExpress, marketing by international contractors is very methodical. Just several days before the Vietnamese investor examined bids for construction of a five-star hotel in Hanoi, the President of Hyundai Group himself, together with a delegation of high ranking executives flew from South Korea to Vietnam to meet the Vietnamese investor. Of course, the South Korean group finally won the bid to implement the project, while a Vietnamese company, a good candidate, lost the game.

Hai Minh, an experienced engineer, admitted that foreign contractors can easily persuade Vietnamese investors to allow them to execute projects, because foreign contractors have much more experience in big projects around the world. Their system can work perfectly, which allows them to meet strict requirements, while they always try to complete projects on time and with high quality that can satisfy investors.

“Powerful financial capability is also a good factor that helps foreign contractors have advantages over domestic contractors, “ Minh remarked.

Meanwhile, domestic contractors are not fully used to executing big projects, or they lack experience. As a result, they are not really confident when talking about projects to investors.