Opinion | Vietnam’s dilemma with Chinese infrastructure investment: should it choose growth or security?
- China appeared to be a key factor in the Vietnamese government’s recent decision to stop foreign investors from funding its North-South Expressway
- Financing the project is now a concern but Hanoi has shown that security concerns do trump development needs, given that it has also ruled out Chinese tech firm Huawei from its national 5G roll-out
Although this will delay the important project, being implemented under the Build-Operate-Transfer (BOT) model, the decision was generally welcomed by the Vietnamese public. Some commentators even asserted that it is the “best decision” yet by Minister of Transport, Nguyen Van The, who has been beleaguered by criticisms over his perceived incapability and widespread corruption in the transport infrastructure development sector.
Half of the 60 investors that submitted expressions of interest for the eight sections of motorway came from China, raising the prospect that Chinese companies would win most of the concession contracts. This generated unease among Vietnamese officials and the public, for three main reasons.
First, Chinese contractors have a poor track record in Vietnam. They have been known for delays, cost overruns, and poor construction quality in various projects, among other issues. The Cat Linh-Ha Dong metro line in Hanoi is a stark example. The project, which is being funded by Chinese loans and built by a Chinese contractor, was originally scheduled for completion in 2013 but is still not finished. The project cost has also more than doubled, from US$377 million to US$771 million. There have been several accidents during the construction phase and the questionable safety profile of the project is one of the main issues preventing the line from being put into operation.
