Opposition voiced to construction ministry proposal

Two industry associations said a recent proposal from the construction ministry to form two new state-owned groups focuses too much on construction activities while downplaying the engineering sector.

On August 6, the Ministry of Construction suggested the government grant permission for the formation of two new groups, the Heavy Industrial Group for Construction and Mechanical Engineering, and the Housing and Urban Development Group.

Under the proposal, construction firm Song Da Corporation and the Housing and Urban Development Corporation would be the two groups’ core firms, respectively.

But in a note sent to the government on Monday, the Vietnam Association of Mechanical Industry and the Vietnam Energy Association said mechanical engineering should not be considered as a sub-economic sector, local newswire VietNamNet reported.

They instead suggested industrial construction and mechanical engineering should be two core activities of two new groups, namely the Industrial and Civil Construction and Real Estate Group, and the Industrial Group for Mechanical Engineering and Machinery Erection.

As suggested by the associations, Song Da Corporation would still be the first group’s core firm while the second group’s core firm would be the Vietnam Machinery Erection Corporation, known as LILAMA.

The two associations said their proposal is in keeping in line with the government’s view that mechanical engineering is a key industry, adding that investing in this sector would help save money as billions of dollars are now spent on importing mechanical equipment for electricity, gas and coal industries.

They also said construction and mechanical engineering are of equal importance.

For example, construction accounts for 60-70 percent of hydroelectricity projects with the rest being machinery, but the opposite is true for thermoelectric projects.

Vietnam currently has eight economic groups, including Vietnam Post and Telecommunications (VNPT), Vietnam Coal and Mining Industries Group (Vinacomin), Vietnam National Oil and Gas Group (PetroVietnam), the Vietnam Shipbuilding Industry (Vinashin), Vietnam Textile and Garment (Vinatex), Vietnam Rubber Group (VRG), Electricity of Vietnam (EVN), and Finance – Insurance Group (Bao Viet).

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