Chinese contractors flee Vietnam $270mn power project as clamor for money unheard

Two Chinese contractors have secretly disappeared from the construction site of a hydropower project in Vietnam’s Central Highlands as local authorities refused to satisfy their unjustified requests for out-of-contract expenses.


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The construction site of the Thuong Kon Tum hydropower project, one of the largest such facilities in Kon Tum Province, is now full of unused materials, equipment, and vehicles as workers refuse to work while the contractors are nowhere to be found.



The VND5.74 trillion ($270.36 million) project broke ground in Kon Plong District in 2009, and was assigned to be constructed by the Hydrochina Huadong Engineering Corporation and China Railway Construction Co Ltd.


The hydropower plant is designed to produce more than 1.09 million kWh a year, while the first turbine was expected to be commissioned in the third quarter of last year.


The facility was also expected to operate at full capacity by the end of this year, a schedule proven impossible to meet given the disappearance of the contractors.


Vietnamese workers of the project said all of the Chinese chief officials and technicians have returned to their home country. There are now only a few Chinese workers left to look after the equipment, they added.


A local official said the Chinese contractors began selling their assets earlier this year.


“Not until they had sold most of the assets and equipment and sent their workforce back to China did we realize that they were gone,” he admitted.


On May 25, the Chinese contractors released an announcement, saying they would officially stop construction.


We have no idea what to do next,” Huynh An, deputy head of the project’s management board, admitted.


Tardy progress


An official from Vinh Son – Song Hinh Hydropower JSC (VSH), the investor of the Thuong Kon Tum project, told Tuoi Tre (Youth) newspaper on Wednesday that most of the construction units of the project are behind schedule.


While the contractors were expected to finish building the plant’s gates, where water is pulled through, in the 48 months since the groundbreaking in September 2009, the construction remains unfinished, the official said.


As for the penstock, which regulates the water flow, the Chinese contractors committed to digging an average of 530m a month, but the real speed was only 91m, which is 5.8 times slower.


The late progress at these construction units left considerable damage to the progress of the whole project,” a VSH official said.


“Many expensive machinery sets have been imported and assembled but they could not be deployed due to the unfinished units.”


VSH general director Vo Thanh Trung said the investor has repeatedly urged the contractors to speed up progress.


But they refused to follow, and instead continued asking for unreasonable conditions,” Trung said.


The VSH chief said the Chinese contractors have asked for VND800 billion ($37.65 million) of additional costs that are not included in the contract.


The Chinese firms even threatened to stop construction if their requests were not met, Trung added.


“When they could not explain the rationale behind the requests, the Chinese contractors appeared deliberately stubborn regardless of the good will from Vietnam,” he said.


The contractors even released a document, saying many Vietnamese workers had abruptly quit and complained that the construction site was insecure.


But the investor and Kon Tum police asserted with Tuoi Tre that these are only excuses for the Chinese firms to ask for money.


“The security at the construction site is stable, and local authorities have created all conditions to facilitate the contractors’ work,” Kon Tum police said.


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