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Contracting rule spins heads   2009-03-21 - VietNamNet/VIR

The rule, designed to help stimulate the economy, has resulted in a big headache.

Ministerial and local authorities are scratching their heads over a new government rule on appointing contractors for certain projects.

Document No. 229/TTg-KTN signed by Prime Minister Nguyen Tan Dung on February 16, 2009 allows ministers and chairpeople of city and provincial people’s committees to appoint contractors for projects valued under VND5 billion ($286,000) instead of organising a tender.

The rule aims to prop up the implementation of state-funded projects to stimulate investment amidst the economic slowdown. The Ministry of Planning and Investment (MPI) is drafting a document to further guide what type of projects can apply the contractor appointment mode. As the draft was circulated for comments, local authorities said they were puzzled over the vague criteria specified in the regulation.

“The MPI’s draft said those projects, worth less than VND5 billion, must consist of at least one emergency bidding pack that contributes to national interest or power security. But all projects using the national budget could claim that,” an official said.

Dang Huy Dong, director of the MPI’s Department of Public Procurement said some provinces had listed most of their projects within the new guidelines.
According to the MPI, to date, each local authority has registered projects totally worth VND2-3 trillion on the average. Up to VND150-160 trillion ($8.6-9.1 billion) worth of projects or nearly a half of the national budget on infrastructure investment in 2009, could trigger concerns over muddy waters in the public works reservoir.

“The criterion should be more concretised, otherwise all projects, under VND5 billion, would not need a bid to choose their contractors,” said a representative from the Hanoi Authority for Planning and Investment. Ministries and local governments are also concerned that while appointing contractors might not deal with the slow pace of bringing projects online, it could harm national integrity.

“It is the programming and land clearance problems that account for 85 per cent of the reasons why leading projects go overtime. It isn’t the bidding process,” said Dong. He said with projects having contractors appointed, it usually took more time to receive money from the State Treasury than those undergoing a bid as the State Treasury would compare the contractor’s offer prices with the state’s quotations, and thus, could even lengthen the project progress.

“Even with some bidding packs that aim to deal with epidemic diseases, we prefer bidding over appointment,” said a representative from the Ministry of Health. Dong of the MPI said: “If worry about responsibilities, let’s organise a bid.”

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