Most of Vietnam’s major projects in Chinese hands

CA - Chinese's predominant role in many of Vietnam’s major projects is sparking concerns among national officials.

Up to 90 percent of Vietnam’s Engineering - Procurement -Construction (EPC) projects are in the hands of Chinese contractors, said Pham Thi Loan of the National Assembly’s Finance and Budgets Committee, at a conference held Friday in Hanoi.

EPC contractors draft designs, procure necessary materials and oversee construction of an entire project. They are entitled to bring in their own labor force or subcontract work to Vietnamese firms.

Most of these projects pertain to oil and gas, chemicals, power, and textiles, Loan said at the conference.

Up to 30 Chinese companies have secured contracts for the country’s major projects, including energy deals worth of billions of dollars, according to VNExpress.

Vietnam will continue to invest in huge development projects, but “if Chinese companies continue to control major energy contracts, the nation's energy security will remain very disconcerting,” Loan was quoted as saying.

Economics expert Bui Kien Thanh attributes the dominance of Chinese contractors to complex bidding specifications. The large projects often require bidders to meet international standards. At the moment, he says very few Vietnamese companies are eligable for these jobs.

Thanh added that Vietnamese companies are rarely sub-contracted by the Chinese firms who are known for importing labor and materials.

Other experts have expressed concern that local manufacturers and laborers have not been given preference, leaving the door wide open for foreign companies to seek government business.

The experts alleged that a reliance on foreign contractors has put Vietnam at risk of adding to its trade deficit, which was the nation's biggest economic bugaboo this year.

According to the General Statistics Office, Vietnam’s trade deficit stood at US$7.4 billion over the past seven months, accounting for 19.4 percent of export turnover.

Last month the trade deficit reached $1.15 billion (or 19.8 percent of export turnover). The government, meanwhile, has previously expressed an interest in keeping that figure below 20 percent, VnExpress said.