Vietnamese economists have long voiced concerns about the country’s heavy economic dependence on China, alleging certain groups and individuals have got kickbacks from Chinese contractors.

Many big-ticket projects have been awarded to Chinese firms even though Chinese contractors are notorious for delays, cost overruns and low construction quality.

Unsurprisingly, experts have reacted negatively to news that a Chinese firm has won a contract to supply ductile iron pipes for Viwasupco to build a new pipeline to carry clean water from the Da River Water Plant in the northern province of Hoa Binh to Hanoi City.

Their strong reaction is understandable as the existing pipeline has broken more than a dozen times, interrupting water supplies for thousands of residents in a number of inner-city districts in Hanoi.

The Vietnamese Government told Vinaconex Water Supply Joint Stock Company (Viwasupco) to suspend the signing of a ductile iron pipe supply contract with Chinese tender winner Xinxing. Hanoi City even asked the Government to order the project developer to hire an international consulting firm to evaluate the quality of Xinxing pipes before any contract is signed.

Viwasupco argued Xinxing had been awarded the pipe supply contract for the VND4.9 trillion project as its winning bid is 11.8% lower than the cost projection.

However, local media reports pointed out low cost is synonymous with low quality.

Hanoi residents are fed up with 17 breaches of the first-phase pipeline which was put into use in December 2012.

To allay public outcries, Viwasupco general director Nguyen Van Ton said the Chinese firm’s bid had been carefully assessed by two of the project’s consulting firms and approved by the company’s board.

“We have confidence in the contractor… They are a major ductile iron pipe manufacturer with a modern manufacturing plant,” Ton said.

According to the news site Dan Tri, a representative of Indian firm Jindal Saw who joined the pipe supply tender pointed the accusing finger at the lack of transparency in the bidding process.

There were initially two Chinese bidders, one French bidder and an Indian-Vietnamese consortium. Finally, one of Chinese contractors, Hydrochina Corporation, and French contractor Saint-Gobain PAM failed because they had not submitted a bond as required.

“I was surprised because a US$1-million bid bond is just a snap to a big company… I don’t know why they had pulled out,” says the representative.

Viwasupco’s fact-finding team came to Jindal Saw’s factory and expressed appreciation of its production facilities. But a few days after the team left, Jindal Saw and its local partner in the consortium were dumped from the bidding.

“We are very disappointed at the way the contractors were disqualified. There was a complete lack of transparency in the bidding process. I feel as if the contractors had been disqualified or forced to quit so as to make sure that just one bidder could stay,” he said.

Nguyen Van Hung, former president of the Hanoi University of Construction, said in Tien Phong newspaper that the public concern about Vuwasupco’s selection of the tender winner is inevitable.

In Vietnam, whenever a Chinese firm wins a contract in a large infrastructure project, the question of quality would immediately emerge.

Over the years Chinese contractors have developed notoriety for offering low bids and then asking for extra money with unexpected cost overruns always cited as a reason.

In fact, most projects with Chinese involvement have lagged far behind schedule.

Worse still, Xinxing has already been implicated in the supply of substandard products for other projects in the city.

Le Nhu Tien, a National Assembly (NA) deputy, said on vtc.vn that voters have suspected Chinese contractors are possibly given special treatment because of the involvement of interest groups.

“Low price or self-interestedness? In fact, many Chinese firms have proved to be bad contractors.

The Cat Linh-Ha Dong urban railway project in Hanoi (developed by a Chinese contractor) is a case in point, with its cost exceeding the original estimate by 57%. This is a dear lesson.

Therefore, contractors should be selected in terms of capability and quality, not price. Delays and poor quality will lead to waste and social insecurity. I think those approving low-price contractors should be held responsible if problems emerge,” he added.

Le Van Thinh, former head of construction project quality assurance at the Ministry of Construction, said in Tuoi Tre that Vietnam is a member of the World Trade Organization, so it is impossible to discriminate against Chinese contractors.

A possible solution is to use technical barriers, high standards or sanctions, he said.

And if these barriers, standards and sanctions are strictly put in place, Chinese contractors would pay a high price for any delays, cost overruns and low construction quality.