Foreign contractors scorn local machinery

Despite a government fiat that Vietnamese investors should use locally made equipment and machinery for construction, not much headway has been made in this regard since foreign contractors win bids for most of the projects.
Speaking at a conference on the implementation of this directive, Vu Viet Kha, general director of the Machines and Industrial Equipment Corporation said the domestic machinery industry was mostly kept out, especially from projects won by Chinese bidders, who only used equipment and machinery from China.

For instance, in the thermal power and hydropower industries, Vietnamese equipment and machinery are good enough to replace imported ones but Chinese contractors never bought them, he added.

Nguyen Van Thu, chairman of the Vietnam Association of Mechanical Industry, concurred, saying while contractors from the developed countries sourced 30 percent of machinery and equipment locally, “Chinese contractors do not let us take any part in their projects.”

He gave the example of cement plants in the northern province of Ninh Binh, all of which had been built by the Chinese. His company produced equipment for such plants but failed to land any contracts, he said.

Ninh Viet Dinh, head of bid management at the Vietnam Electricity Group, said: “Since we had to get Chinese loans for our projects, we had to follow their requirements on the ratio of Vietnamese and Chinese machinery.”

Luu Hoang Long, general director of the Vietnam Electronics and Informatics Corporation, said the lowest-cost tender process is a big hurdle for domestic equipment and machinery makers since they cannot compete with imports due to the heavy taxes they pay.

The rate is as high as 40 percent on some machines while imports are tax-free, he said.

He said machines that are made in Vietnam should not be imported tax-free.

Thu called for imposing sanctions on investors who import equipment that can be sourced locally.
Tuoi Tre

Tags: machinery

Posted by VBN on Sep 30 2011. Filed under Industry. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry