China national corporation to pay Vietnam $6 mln

The China National Chemical Construction Corporation has agreed to pay a Vietnamese company $6 million as a fertilizer factory built by the former in Haiphong City in 2009 has been found to fall below agreed standards.

According to Hoang Van Lieu, deputy CEO of the Vietnam Chemical National Group (Vinachem), it is stipulated in the contract that the Dinh Vu DAP fertilizer plant will be able to produce fertilizer with nutritional content of between 60 and 64 per cent, while the real figure detected is only 60 to 61 per cent.

After prolonged negotiations, the Chinese constructor has finally agreed to compensate $2.9 million for this issue, he said.

“They also accepted a fine of $2 million for their tardiness in completing the project,” he added.

In addition, the Chinese company is to pay another $1.05 million worth of some project items that it should have carried out but did not.

Dinh Vu fertilizer plant, the first of its kind in Vietnam to produce diamoni phosphate (DAP) fertilizer, has also been found to have many other problems when it was launched in 2009, six years after construction started.

A report issued by Vinachem showed that although the plant was set to produce 330,000 tons of DAP annually, it only managed to make 150,000 tons out of the 260,000 tons as demanded by Vinachem last year.

Moreover, the plant is polluting the surrounding environment with its toxic emission, the report said. – Tuoitre