Vietnam’s project management board in Bac Giang City in the north has to pay EUR1.15 million (US$1.4 million) in compensation to a Demark contractor for finishing an ODA-funded environmental project one year later than planned.
Accoding to Tuoitre News, the Bac Giang City Environmental Hygiene and Drainage Management Board has to pay the compensation to contractor MT Hojgaard A/S (MTH).
MTH had earlier asked for EUR3.6 million to cover costs arisen from the tardiness. Both sides brought the issue in front of the International Court of Arbitration headquartered in Paris but later negotiated.
After two days of negotiation (3rd and 4th of October 2012), they settled on a compensation of EUR1.15 million.
The information was revealed by the Vietnamese Ministry of Construction in a report to Prime Minister Nguyen Tan Dung.
According to the ministry, the drainage project was started in June 2007 with VND297 billion (US$14.2 million) in ODA funds from Denmark (Vietnamese side spent VND16 billion or a mere $768,300).
It was expected to be complete in June 2009 but due to problems in site clearance and underground items, the time frame was extended to July 2010.
On October 21, the Bac Giang provincial People’s Committee asked the Prime Minister and concerned agencies to allow it to source the compensation money from the province’s state coffers.
According to the construction ministry, MTH has asked the International Court of Arbitration to temporarily suspend the litigation until December 3, 2012. If the Vietnamese side has not paid the EUR1.15 million sum by that date, the Paris court will proceed with the lawsuit.
