The investment and construction giant Song Da is struggling with major infrastructure projects in the northern mountainous province of Thai Nguyen due to its weak management capability.
Song Da Holdings is contractor of many large projects in Thai Nguyen Province, including the crucial project on improving the National Highway 3 with the length of 63 kilometers.
The Ministry of Transport has also permitted the construction group to carry out the project in accordance with two project delivery methods of BOT (Build-Operate-Transfer) and BT (Build-and-Transfer), which have seen Hanoi and Thai Nguyen Province provide lands for the contractor to build urban zones.
The Thai Nguyen Province People’s Committee submitted Prime Minister Nguyen Tan Dung’s approval on September, 2009, for allowing Song Da to be fully in charge of the project as long as the corporation ensured to have enough the human resource and to finish the work by early this year.
Song Da Holdings entered an agreement with the Thai Nguyen Province People’s Committee to become the contractor and the builder of many major projects on traffic and property in the northern province.
Under the agreement, the corporation will be in charge of the improvement on the National Highway 3 [section from Hanoi and Thai Nguyen Province], construction on the new urban zone Xuong Rong, construction on Tam Dao Irrigation and the belt road No.5 and construction on the 195-hectare urban zone Song Da – Thai Nguyen.
However, while the people’s committee started to clear sites and relocate households in the projects’ planning zone at the end of 2009, the work on the National Highway 3 were halted many times due to Song Da’s weak management.
As the traffic on the highway was getting much heavier with the increasing number of accidents, the Thai Nguyen Province People’s Committee on March this year had to step in to speed up the project’s progress.
The committee submitted the Prime Minister’s approval to cooperate with the Traffic Safety Project Management Unit and the Thai Nguyen City’s authority to be responsible for around 53 kilometers of Song Da’s national highway project.
Despite the reduction in the workload, the progress of the remaining work that the construction corporation is in charge of is still at slow pace.
Efforts to find out solutions for the problem have seen Deputy Prime Minister Hoang Trung Hai ask the Ministry of Transport and Thai Nguyen Province’s authority to quickly hold a meeting with Song Da.
“The Ministry of Transport used to be ‘disappointed at’ Song Da Holdings’ BOT project on the National Highway 2 as its management capability was very weak,” said Transport Minister Ho Nghia Dung.
“The ministry now still had to ask the construction corporation to try its best for the National Highway 3. If it fails to finish the BOT and BT project, it should switch to the project delivery method PPP (Public-Private-Partnership)”.
Most subsidiaries of the construction and investment giant Song Da specialize in building and operating hydropower plants. However, they are suffering heavy losses from their property investments.
