Unveiling the Anomalies in the IT Building Project in Hue City

On August 4th, the Hue Center for Information Technology (IT) announced its decision to terminate the contract with the joint venture of Cong Thanh Construction Investment Development Joint Stock Company (Cong Thanh Company) and Hoang Nhat Phat Trading Co., Ltd. for the construction of the Hue IT Building in Thanh Thuy ward.

Contractor Runs Out of Funds

The termination was necessitated by Cong Thanh Company’s financial difficulties, which prevented them from continuing the construction project. Hoang Nhat Phat Trading Co., Ltd., the subcontractor, also lacked the capacity to complete the remaining work. Cong Thanh Company, as the main contractor, was responsible for the construction of the office building, guard house, and motorcycle parking lot, as well as providing the first batch of equipment. Hoang Nhat Phat Trading Co., Ltd. was in charge of the fire protection system but had only completed a few items according to the contract schedule.

Le Vinh Chien, Director of the Hue IT Center, stated that the project owner will consider imposing contract violation penalties on the joint venture and initiate procedures to recover the remaining advance payment. The center will also publish information about the violating contractor on the national bidding system and impose penalties for delays.

According to the Hue IT Center, Cong Thanh Company had completed approximately 44% of the contracted work, including additional tasks. However, the project owner has already disbursed 54% of the contract value, equivalent to VND 18.68 billion.

Previously, on July 11, Nguyen Van Phuong, Chairman of Hue City People’s Committee, approved the termination of the construction contract for this package. He also instructed the center to adjust the estimate, prepare a plan for selecting a new contractor, and ensure there is no waste or misuse of state budget funds. The Chairman also requested the Hue City Inspectorate to examine and assign responsibility to the Hue IT Center (if any) in accordance with regulations.

Substandard Equipment Usage: A Safety Concern

Package 12, which includes construction costs and the first batch of equipment, had an invited bid price of nearly VND 41 billion. Cong Thanh Company won the bid with a price of nearly VND 34.6 billion, VND 6.4 billion lower than the invited price. The contract was signed at the end of 2023, with a implementation period of 600 days.

Immediately after winning the bid, Cong Thanh Company signed a subcontract with Quang Quyet Construction Trading Service Co., Ltd. in Hue to perform the entire construction work for VND 4.67 billion. Cong Thanh Company only sent a few key personnel to oversee the project. The construction has mostly completed the rough structure of the 5-story building with one basement and one tum.

According to the invitation to bid issued by the Project Management Unit, which is the Investment Construction and Urban Development Project Management Board of Hue City, on November 30, 2023, bidders for Package 12 must commit to using 17 main construction equipment, including goods hoists, cage hoists, tower cranes, forklifts, and cranes.

However, during the entire construction period from April 2024 to May 2025, the required equipment such as cage hoists and tower cranes were notably absent from the construction site. Instead, Cong Thanh Company used only manual hoists and occasionally hired cranes to lift materials, which is a highly dangerous method that compromises labor safety.

The replacement of modern equipment with manual hoists by the contractor was not approved by the consulting supervision unit, consisting of Acmec Project Management Consulting Joint Stock Company and Dat Viet One-Member Limited Company, nor by the Investment Construction and Urban Development Project Management Board of Hue City.

It is estimated that the rental cost of tower cranes and hoists ranges from VND 20 million to VND 60 million per machine per month. By opting for manual hoists instead of the required equipment, Cong Thanh Company likely avoided incurring costs amounting to hundreds of millions of VND. This money should have been allocated to ensure labor safety and faster construction progress.

Additionally, Cong Thanh Company currently owes billions of VND to several businesses in Hue that supplied materials such as non-burnt bricks, sand, concrete, and pile pressing. Quang Quyet Company, in particular, is facing a debt of VND 700 million, causing significant difficulties for their workers.