A road section constructed by Son Hai Corporation. (Photo: Bao Cong Luan)
Son Hai Corporation has recently attracted attention as the only infrastructure contractor in Vietnam that offers a 5 to 10-year quality warranty for construction projects, road construction, and hydropower projects.
Most recently, on January 5, 2024, Son Hai Corporation sent a letter to Project Management Board 7, Ministry of Transport requesting an additional appendix to extend the construction warranty period from 2 years to 10 years for the high-speed road construction section in the XL02 bidding package from Van Phong to Nha Trang (in the North-South Expressway Phase 2 project) undertaken by the company.
Son Hai Corporation first gained attention in 2014 when it participated in the expansion project of National Highway 1A. At that time, road sections were usually only warranted for 2 years, but Son Hai Corporation announced a 5-year warranty for the 2 bidding packages it implemented, namely package 10 and package 14, covering a length of 15km across Quang Binh province. Son Hai Corporation even put up signs saying “5-year warranty” along the roads “for people’s participation in traffic monitoring”.
In addition to surpassing the standard warranty period, in 2015 Son Hai Corporation also committed to rectify any excessive subsidence by completely removing and re-constructing, without compensating for subsidence in an unsightly or partial manner as other contractors had done. Based on this commitment, the Ministry of Transport extended the warranty period from 2 years to 4 years for National Highway 1A.
In practice, in the two bidding packages 10 and 14 constructed by Son Hai Corporation, after a long period of use, there have been no occurrences of wheel rutting on the roads, while during the same period, many other bidding packages have experienced this phenomenon.
In late 2022, Son Hai Corporation once again made a big commitment of a 10-year warranty, and the state will not need to spend any money during the warranty period.
One of the recent projects considered a miracle in the transportation and logistics construction industry carried out by this corporation is the Nha Trang – Cam Lam Expressway. The Nha Trang – Cam Lam Expressway has a route length of 49.1km, starting from Dien Khanh district, passing through Cam Lam district and Cam Ranh city, Khanh Hoa province, with a total investment of VND 7,600 billion, including about VND 2,967 billion of state capital. The project is invested by Son Hai Corporation under the Public-Private Partnership (PPP) – Build-Operate-Transfer (BOT) contract.
The project began construction in September 2021 and was expected to be completed and put into operation in September 2023. Son Hai Corporation achieved a feat by completing and operating the project ahead of schedule on May 19, 2023.
These commitments, along with the fast construction progress, have raised questions in the public and observer communities: How strong is Son Hai Corporation’s financial foundation?.
Which banks are lending to Son Hai Corporation?
Son Hai Corporation, formerly known as Son Hai Co., Ltd, was established in 1998, with its head office at 117 Huu Nghi Street, Nam Ly Ward, Dong Hoi City, Quang Binh Province. Son Hai Corporation’s main business lines are construction of various types of houses, railway and road projects, real estate development, ground leveling. This is a well-known construction company in Vietnam.
As of May 2023, Son Hai Corporation’s charter capital is recorded at VND 2,366 billion. Of which, Mr. Nguyen Viet Hai – Chairman of the Council holds 99.912%, and Mr. Le Thanh Huong – Director holds 0.088% of charter capital.
In terms of borrowing capital, Son Hai Corporation currently has a debt of nearly VND 1,894 billion at credit institutions, all of which are Group 1 debts – the best debts.
Specifically, BIDV – Quang Binh Branch is currently lending Son Hai Corporation more than VND 936 billion, including over VND 569 billion in short-term debt and nearly VND 368 billion in long-term debt; VietinBank – Quang Binh Branch loans more than VND 760 billion, all of which are short-term debt.
In addition to the above two banks, Son Hai Corporation also has debts at 3 financial companies: Vietnam Joint Stock Commercial Bank for Industry and Trade – VietinBank’s Financial Leasing Company (over VND 89 billion), Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank) Financial Leasing Company (VND 13.6 billion), and BIDV-SuMi TRUST Financial Leasing Limited Liability Company (VND 94.2 billion).
In terms of business performance, 2023 was considered a successful year for Son Hai Corporation. Accordingly, the corporation won many large bidding packages and achieved a revenue of nearly VND 4,000 billion.
In the year-end summary of 2023, Mr. Nguyen Viet Hai – Chairman of Son Hai Corporation also stated that the company has no tax debt, wage debt, insurance debt, and overdue bank debt. In addition, the average income of the company’s employees increased compared to 2022, reaching VND 24 million/person/month. Among them, the lowest-income person in Son Hai Corporation is a buldozer driver with an annual income of over VND 270 million.
Mr. Nguyen Viet Hai also revealed that in addition to timely payment of income, Son Hai Corporation has allocated nearly VND 60 billion in bonuses for officials and employees in 2023.
