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Lower bid prices, according to the Vice Chairman of Quang Tri Province Hoang Xuan Tan, can translate into weaker project quality and slower progress—ultimately leaving works incomplete and generating losses. Speaking as the National Assembly held a plenary session on April 21 to discuss the mid-term public investment plan, Mr. Tan said bidding policies have long aimed to reduce prices to save the budget and improve investment efficiency, but the long-term outcomes of low-bid awards have often been negative.
Mr. Tan said that over many years, projects won with low bids have tended to suffer from poorer quality and delayed implementation. He cited an ODA-funded drainage project worth 1,000 billion VND, where the average reduction in civil works prices was about 24%, with some packages cut by as much as 40%. While the project reportedly saved around 200 billion VND, Mr. Tan said the low-bid packages were delayed in execution, extending the project timeline by about three years and resulting in substantial losses.
He attributed the delays to the fact that low prices can leave contractors with little or no profit, leading them to prioritize other projects. He also pointed to investment difficulties that increase procedural burdens during implementation.
Mr. Tan also referenced a project to build six classrooms with an investment of 8 billion VND, carried out by a low-bid contractor. He said the contractor’s limited capacity meant the project took nearly four years to complete, causing significant inconvenience to the school.
To address these issues, the Quang Tri deputy chairman proposed amending relevant laws, including raising the bidding threshold for works with uniform standards. As an example, he suggested increasing classroom projects from 2 billion VND to 10 billion VND.
From now to 2030, the government proposes total public investment of 8.22 quadrillion VND—2.7 times the level of the previous five years. Central government would account for 3.8 quadrillion VND, while local governments would contribute 4.22 quadrillion VND.
Ms. Pham Thuy Chinh, Deputy Head of the Economic and Financial Committee, argued that Vietnam should move away from an “absorption-driven” approach toward improving efficiency. She said the main obstacles in recent years were not capital availability, but investment preparation issues, land clearance delays, and limited capacity to execute projects—factors that contribute to resource waste.
Ms. Chinh proposed disbursing based on results and setting a principle that if targets are not met in a given phase, funds should not be allocated for subsequent phases. She also called for public disclosure of disbursement rates and project effectiveness to help prevent inefficient spending.
Mr. Tan emphasized strengthening the accountability of project owners in selecting capable contractors. He also noted that localities—particularly major urban areas such as Hanoi, Ho Chi Minh City, Hai Phong, and Da Nang—should consider flexible use of financial tools, including the urban development model linked with public transport (TOD) and local government bonds, to mobilize resources and support sustainable development.
Finance Minister Ngo Van Tuan said efficient public investment use is a key requirement. He indicated that, given the current six-month to one-year bidding process, agencies will be required to review bidding procedures, land clearance steps, and price standards. He added that Prime Minister Le Minh Hung will chair a nationwide conference this week to review the entire public investment disbursement process.
The National Assembly is expected to vote on the mid-term public investment plan on April 24.
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