Intellasia News Services -- HCM City lot bidder cries foul

HCM City lot bidder cries foul
Source: 22-APR-2008 Intellasia | Vietnam Investment Reviews page 18
22 Apr, 2008 - 7:00:00 AM
The winning bid for a piece of city-owned prime real estate in the centre of HCM City's District 1 has caused an uproar as losing bidders claim municipal authorities showed bias during the process.

The city's people's committee awarded the 13,000-square-metre plot to Thai Son consortium, which included Thai Son Joint Stock Company, Chi Thanh Investment Joint Stock Company, Anh Duong Finance Investment Joint Stock Company, Bidv, Bidv Land, Hanwha Engineering and Construction, Hanshin Engineering and Construction, and Hanwha Galleria.

The Khanh Gia consortium of Khanh Gia Company, Ssangyong Engineering and Construction, Doosan Heavy Industries & Construction and Punkyung lost out on the bid and has since filed a protest.

Khanh Gia consortium's bidding price is higher than Thai Son consortium's but the former committed to donate only US$22.2 million to the city's budget while the latter said it would chip in US$117 million.

The Khanh Gia consortium claims the assessment board did not handle the process in a fair manner and major discrepancies remain in the winning bid's submitted documentation.

The consortium highlighted the inclusion of two of South Korea's top 10 companies Ssangyong and Doosan together with guaranteed investment capital from Daego Bank, Shinhan Bank, Shinyong Securities and Vietcombank as evidence that its finance and experience capacity should have been assessed higher than the Thai Son consortium, which was having problems scrapping up the needed 4,200 billion dong (US$262.5 million) guaranteed by Bidv.

Bidv's guarantee exceeds 15% of the bank's chartered capital of 15,000 billion dong (US$937.5 million).

Thai Son consortium's experience, according to the recent bidding result of the city's people committee, was assessed at 27 points in comparison with 21 points for Khanh Gia's. Points for business effectiveness for the Thai Son consortium came in at three points higher than Khanh Gia's 47 points.

The Thai Son consortium was also said to violate the bidding rules as it required its 1,900 billion dong donation to the city's budget must be used for welfare and charity projects.

Thai Van Re, chair of the bidding assessment board, said in a press conference last week to announce the bidding result that: "There was no bias during the bidding evaluation process. Thai Son consortium won as it had the biggest committed capital contribution to the city's budget."

Re knocked back suggestions that Thai Son consortium had made demands on the city's use of its fee and said the group's capital contribution to the consortium's investment should be defined as its committed capital not its given credit or guaranteed investment capital to the consortium.

"The finance and experience capacity of each consortium as a bidder is the total collective of finance and experience of all its members, so, in this regard, Thai Son consortium's experience and finance capacity had been obviously evaluated higher than Khanh Gia's," Re said.

Bidding for the site opened on December 17, 2007, with four official bidding documents from Thai Son, Khanh Gia, REE consortium including REE Corporation, Hong Quang Construction and Investment Corporation, and Savimex Joint Stock Company, and Le Dai Nam consortium consisting of Le Dai Nam Joint Stock Company, PetroVietnam Real Estate Company, Rockingham Asset Management Company, PetroVietnam Finance Co and general Construction Corp No 1.

This bid does not bode well for city plans to open up the books on the other sites.