Vietnam to cover costs of bridge delay


The Vietnamese Transport Ministry has basically agreed to compensate Tokyu Construction Co. for additional costs stemming from a delay in a major public works project for bridge construction, sources said.

The ministry agreed to pay 155 billion dong, or some ¥700 million, against 200 billion dong demanded by the Japanese general contractor, the sources said late last week. So far, Vietnam has never paid compensation arising from a delay in a public works project.

But it is uncertain whether the agreement will be implemented. Vietnam is asking Tokyu Construction to show full evidence that the additional costs are required.

In addition, the Vietnamese Finance Ministry is concerned that the country will have to cover extra costs for other public works projects that are being delayed if it pays compensation to Tokyu Construction, one source said.

For the ¥80 billion project to construct Nhat Tan Bridge in Hanoi, Japan has extended ¥54.1 billion in soft loans to Vietnam.

The bridge, dubbed a Vietnam-Japan friendship bridge, was initially scheduled to be completed by October 2010 when Vietnam celebrated the millennium of the transfer of its capital to Hanoi. Now Vietnam aims to open the bridge in December 2014.

Tokyu Construction won an ¥8.4 billion portion of the project. The firm started requesting compensation in January 2010 as a delay in the handover of land from local users is blocking the project.

The Japanese Embassy in Hanoi and the Japan International Cooperation Agency supported the firm’s move.

On June 6, Vietnam agreed to pay compensation while attaching some conditions, including the submission of many documents as evidence.