Termination of Contract with Contractor for IT Center Construction in Hue City
On August 4th, the Hue City Information Technology Center made a decision to terminate the construction contract with the joint venture of Cong Thanh Construction Investment Development JSC (Cong Thanh Company) and Hoang Nhat Phat Trading Co., Ltd. for Package 12, which involved the construction of the Hue City IT Building in Thanh Thuy Ward.
Termination of the Contract
This decision was made due to Cong Thanh Company’s lack of financial capability to continue the construction of Package 12, and Hoang Nhat Phat Trading Co., Ltd.’s insufficient capacity to handle the remaining scope of work assigned to Cong Thanh.
By removing all modern equipment such as hoists and tower cranes, Cong Thanh Company profited immensely while putting workers in an unsafe working environment.
Mr. Le Vinh Chien, Director of the Hue City IT Center, stated that the owner will consider imposing contract violation penalties on the joint venture, recovering advanced payments, confiscating performance bonds, publishing information about the violating contractor on the national bidding system, and imposing late penalties.
According to the Hue City IT Center, Cong Thanh Company had completed approximately 44% of the contract value, including additional works. So far, the owner has disbursed 54% of the contract value, equivalent to nearly VND 18.68 billion, including advance payments.
Package 12 Left Unfinished as Cong Thanh Abruptly Exits
Previously, on July 11, Mr. Nguyen Van Phuong, Chairman of Hue City People’s Committee, signed a document agreeing to terminate the construction contract for this package. He also requested the approval of budget adjustment procedures and the selection of a new contractor to prevent any waste or loss of state budget.
Mr. Phuong instructed the Hue City Inspectorate to consider administrative penalties for the Hue City IT Center (if any) in accordance with the law on handling administrative violations in the fields of planning, investment, and construction for public investment projects.
Package 12 involved construction and equipment installation for the first phase, including the construction of office buildings, guard houses, motorcycle parking lots, termite prevention measures, and electrical systems. The invited bid price was nearly VND 41 billion. Cong Thanh Company won the bid with a price of VND 34.6 billion, a reduction of VND 6.4 billion. The contract was signed at the end of 2023, with a implementation period of 600 days.
After winning the bid, Cong Thanh immediately signed a subcontract with Quang Quyet Construction Trading Service Co., Ltd. in Hue to carry out the entire construction scope for VND 4.67 billion. Cong Thanh only assigned a few key personnel to oversee the project. The package is currently at the stage of completing the rough construction of a 5-story building with one basement and one tum. The company also failed to provide the necessary construction equipment as stipulated in the contract, profiting immensely from these cuts.
As of now, Cong Thanh owes billions of dong to numerous 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, putting its workers in a difficult situation.
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