‘Commissions’ Required of Companies Bidding For Building Work in Flood-hit Lao Province

Construction News Laos
A house is shown following a flood in Attapeu province’s Sananmxay district, Laos, in an August 2018 photo

‘Commissions’ Required of Companies Bidding For Building Work in Flood-hit Lao Province

27 February 2019

Construction firms bidding for approval to build permanent homes for flood victims in Laos must pay between 10 percent to 26 percent of the total cost of the project to local authorities if their bids are approved, sources in the country say.

Government officials in Attapeu province, where a dam breach last year killed at least 40 and left thousands of others homeless, will sign off on construction bids before submitting them to central government authorities for final approval.

Payment of a “commission” will be required from firms who win their bids, though, the owner of one company in Attapeu told RFA’s Lao Service, speaking on condition of anonymity.

“The commission the construction company must pay is at least 10 percent of the total costs for the project,” RFA’s source said.

Even higher amounts have been requested from other firms, another source said, adding that authorities have set the cost to his firm for approval to proceed with the work at 26 percent of the project’s cost.

“The cost of the commission is too high,” the source said, also speaking on condition he not be named.

An Attapeu provincial official in charge of public works meanwhile said that the Lao central government has directed that no commission payments be charged for government approval of bids for the project.

“This is to make sure that there are no scandals of corruption,” Rattanaphone Thepsouvanh, director general of the provincial public works and transportation department, one of the local authorities responsible for approval of the bids, told RFA.

Bidding for the work is still under way, with no final approvals of bids yet granted, sources said.

Four categories of permanent homes have now been established for construction, sources say, with designs ranging from one-story cement houses with steel structures at a cost of 470 million kip (U.S. $54,874) to two-story cement houses with steel structures at a cost of 660 million kip (U.S. $77,057).

Daily hardships

Survivors of the July 23, 2018, breach of a saddle dam at the Xe Pian Xe Namnoy (PNPC) hydropower project still face daily hardships, with many left traumatized by their experiences during and after the disaster, a representative of a South Korean civil society organization told RFA in a recent interview.

Korean involvement in the project, a consortium between a local Lao company and South Korea’s SK Engineering & Construction, has prompted Seoul to send its own relief teams to Laos to help mitigate the effects of the flooding.

Survivors of the flood still lack food and other necessities, the CSO worker said, following a fact-finding mission to Attapeu’s Sanamxay district in January.

“They only get rice from the government, and just 5,000 kip per day [U.S. $0.58] per day to cover the cost of their meals,” she said, adding, “Some of them are still having nightmares about the night of the disaster.”

What survivors need most is a speedy return to their normal lives before they were put in temporary housing with no income and no land suitable for agriculture, she said.

Corruption still pervades all sectors of life in Laos, from illegal logging to deliberate cost overruns on construction projects to the paying of bribes to obtain government services in day-to-day life, sources say.

Reported and translated by Ounkeo Souksavanh for RFA’s Lao Service. Written in English by Richard Finney.

Source: https://www.rfa.org/english/news/laos/commissions-02272019155118.html