Delayed Construction and Contract Termination: The story of a company that still owes the investor 36 billion VND
The Provincial Police Investigation Agency (PC03) has recently requested the Department of Planning and Investment to coordinate and provide information on five bid packages won by Construction Investment Joint Stock Company 493 (Construction Company 493) in the project “Construction of social infrastructure of Loc An – Binh Son Resettlement Area” under the “Land Recovery, Compensation, Support, and Resettlement Project for Long Thanh International Airport.”
The Loc An – Binh Son Resettlement Area social infrastructure construction project consists of 11 works (corresponding to 11 bid packages). In 2021, the construction of these works commenced, with an expected completion date in 2022. After signing the contracts, the contractors of these social works in the Loc An – Binh Son Resettlement Area were all pre-paid with a bank guarantee.
However, many of the project’s works experienced delays in construction progress. As a result, in September 2022, the Provincial Project Management Board (the project owner) terminated and liquidated six contracts with slow progress, low completion rates, and long delays. Among these, five contracts belonged to Construction Investment Joint-Stock Company 493.
Up to now, the Provincial Project Management Board has not been able to recover the pre-paid money from Construction Company 493 for the five bid packages they undertook in the project of constructing social infrastructure in Loc An – Binh Son Resettlement Area.
Specifically, the amount of 36 billion VND prepaid to the contractor of these five bid packages, Construction Investment Joint Stock Company 493, guaranteed by Southeast Asia Joint Stock Commercial Bank, has not been recovered.
Early in 2023, the Provincial Project Management Board sent a lawsuit to the People’s Court of Dong Nai province against the Southeast Asia Joint Stock Commercial Bank to recover the prepaid money for the five bid packages implemented by Construction Investment Joint Stock Company 493 in the Loc An – Binh Son Resettlement Area for Long Thanh Airport. Subsequently, the Southeast Asia Joint Stock Commercial Bank requested the People’s Court of Dong Nai province to transfer the case file to the People’s Court of Vinh city (Nghe An province) for resolution.
According to its business registration, Construction Investment Joint Stock Company 493 has a tax code of 2901206842 and is headquartered at BT2 -09, street 14, Tecco Vinh Tan urban area, Tan Phuc ward, Vinh city, Nghe An province.
The company was established on January 12, 2010, with Mr. Nguyen Bao Trung, born in 1993, residing in Block 1, Truong Thi ward, Vinh city, Nghe An province, as its legal representative and CEO. Construction Investment Joint Stock Company 493’s primary business activity is the construction of railway and road works.
At its establishment, Construction Investment Joint Stock Company 493 had a charter capital of 20 billion VND, contributed by three shareholders: Mr. Nguyen Hong Thang, residing in Block 12, Truong Thi ward, Vinh city, Nghe An province, contributing 400 million VND (20% of shares); Ms. Nguyen Kieu Anh, residing in Block 1, Truong Thi ward, Vinh city, contributing 2 billion VND (10% of shares); and Mr. Nguyen Bao Trung, residing in Block 1, Truong Thi ward, Vinh city, contributing 17.6 billion VND (88% of shares).
In mid-July 2022, Construction Company 493 increased its charter capital to 50 billion VND. In this capital increase, the shares of Mr. Nguyen Hong Thang and Ms. Nguyen Kieu Anh remained the same as before. The shares of Mr. Nguyen Bao Trung increased from 17.6 billion VND to 47.6 billion VND.
In recent years, Construction Company 493 has continuously won many large bid packages in various localities. Statistics show that in the past five years, the company has participated in 28 bids, winning 24 of them. The total value of the winning bids is over 353.7 billion VND (with an average winning bid price to the estimated price ratio of 96.71%).
Additionally, Construction Company 493 is a familiar contractor in bid packages where the Project Management Boards of Dong Nai province and Nghe An province, as well as Construction Investment Joint Stock Company No. 9 – NA (headquartered in Vinh city, Nghe An province), are the investors.
In the bid packages where the Project Management Board of Construction of Civil and Technical Infrastructure of Urban Areas in Nghe An province is the investor, Construction Company 493 also participated independently and won five bid packages with a total value of more than 64.1 billion VND.
Specifically, they won Package No. 01: “Construction of School Building No. 1 and Sports Gymnasium at Quan Bau Secondary School, Vinh city, Nghe An province (Phase 2)” with a value of 12.9 billion VND; Package No. 2 – “Construction of a four-story school building and functional rooms at Vinh Tan Primary School, Vinh city” with a winning value of 12.4 billion VND, and so on.
At the bid packages where Construction Investment Joint Stock Company No. 9 – NA is the investor, Construction Company 493 also participated independently in three bid packages and won all three with a total value of over 35 billion VND. The participation and winning rate in the bid packages where this board is the investor reached 99.68%.
In Dong Nai province, Construction Company 493 won seven bid packages, lost one, and had one canceled. The total value of the winning bids exceeded 145.5 billion VND.
At the bid packages where the Dong Nai Provincial Project Management Board is the investor, Construction Company 493 participated independently and won with a very low price reduction compared to the estimated price.
Notable examples include Package No. 26 (construction) of the “Suoi Nuoc Trong Area Drainage System Project, Long Thanh district,” with a winning value of 29.5 billion VND (a reduction of 1.5 billion VND);
Package No. 8 of the “Loc An – Binh Son Residential Area Project” with a winning value of 27.9 billion VND (a reduction of 0.1 billion VND compared to the estimated price);
Package No. 19 of the “Component Project of Social Works in Loc An – Binh Son Residential Area” with a winning value of 25.66 billion VND (a reduction of 416 million VND compared to the estimated price), and more.
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