Vietnam Closes Bidding on Highway Project, Refusing Investments From China


2019-09-25
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vietnam-highway2-092519.gif Prime Minister Nguyen Xuan Phuc (C) and other Vietnamese leaders announce the launch of part of the North-South Expressway Project, Sept. 16, 2019.
Photo: Ministry of Transport

Vietnam has closed the bidding for work on a major construction project along its northern coast, restricting participation to domestic firms and refusing offers from Chinese and other foreign investors among public fears of growing Chinese influence in the country.

Speaking to reporters on Tuesday, Vietnamese Deputy Minister of Transport Nguyen Ngoc Dong confirmed that all eight of the project components of the proposed North-South Expressway open to joint public-private investment have been awarded to Vietnamese companies.

Three other sections of work on the 2,109 km road, which will join northern Vietnam’s Lang Son and Ca Mau provinces, will be built with state funds, with the Expressway scheduled for completion by 2025, sources say.

Speaking to RFA’s Vietnamese Service, some observers welcomed the government’s decision to block foreign investment in the project, while others voiced concern over Vietnamese companies’ capacity to perform the work, saying money might have to be borrowed from China anyway.

“The government has made a wise choice,” Vietnamese journalist Ho Bat Khuat said, citing widespread criticism on social media of a Sept. 4 announcement by Dong that the names of companies winning their bids would not be published and public fears of Chinese economic penetration of Vietnam.

“Among the people, it has been almost unanimous that letting foreign contractors enter [the country] is not conducive to national security,” he said.

“This is a sign of [the power of] social criticism. The government has finally listened.”

Observers in Vietnam have grown increasingly wary of Chinese investments connected with President Xi Jinping’s sweeping Belt and Road Initiative (BRI) as Hanoi weighs collaboration on projects under the scheme amid concerns of falling into a “debt trap” that would leave it beholden to Beijing.

Among the issues of concern are infrastructure projects pursued by China, government policies perceived as too beneficial to Chinese investors, and how mounting debt could force Hanoi to support Beijing’s interests in Asia, such as its disputed territorial claims in the South China Sea.

Capital, capacity concerns

Some fear that Vietnamese companies awarded the work may not be up to the job, though, with some forced to borrow money from China on condition of buying raw materials from China or letting Chinese companies take part in construction.

“Bidding companies must be fully transparent,” Tran Bang—a construction engineer based in southern Vietnam’s Ho Chi Minh City—told RFA in an interview.

“The public must know what these companies have worked on in the past, including the quality of the work they did and how it progressed. Even the companies’ capital and capacity to do the work must be made public,” he said.

“Otherwise, things may be covered up."

Speaking to RFA from Paris, senior economic advisor to the former Republic of Vietnam Nguyen Gia Kieng said that some of the Vietnamese companies now awarded the work may not have been strong enough to bid.

“If because of a lack of capital they have to buy materials from China, this will be a debt owed to China by a private Vietnamese company, and the government and people of Vietnam would have no responsibility for that,” he said.

Meanwhile, work on the North-South Expressway itself should be broken into even smaller sections, he said, adding that it would not be advisable for one company to bid on the entire project.

“What we need to do is split it up into dozens or even hundreds of sections and give each section to a different company. And some companies may be strong enough to win bids on multiple sections,” he said.

A new consensus

The apparently exclusive role now played by Vietnamese companies in the North-South Expressway Project shows the government may be listening to public criticism, pointing to a growing consensus between the government and the people, sources told RFA in interviews.

This project “will be different,” journalist Ho Bat Khuat said.

“The people are going to focus on this and pay attention, and their supervision will increase.”

Reported by RFA’s Vietnamese Service. Translated by Channhu Hoang. Written in English by Richard Finney.

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