Hong An Bridge and Road project has a winning bid rate of 91%, but business results are still 'regressing'

Winning many bids with very low savings rates, who are the "familiar" contractors of some project management boards in Ho Chi Minh City?

According to the investigation of the Journalist and Public Opinion Newspaper, in the past 2 years, Hong An Bridge and Road Construction Service Trading Company Limited (Hong An Bridge and Road) has continuously won bids with low savings rates and many of the bids only Hong An Bridge and Road participated in the bidding. In particular, this company is quite "familiar" with some project management boards in Ho Chi Minh City.

Hong An Bridge and Road won the bid for the Bridgehead Road Construction Package (including trees) - Construction of Long Kieng Bridge, Nha Be District with a savings rate of only 0.06%

Specifically, since the end of 2022, Hong An Bridge and Road has won 2 bid packages invested by the Binh Chanh District Investment and Construction Project Management Board. Notably, the Construction package (including costs for ensuring safety of waterway and road traffic) is a bid package under the Thanh Nien Bridge Repair Project (connecting Truong Van Da Street and Thich Thien Hoa Street), Binh Loi Commune - Le Minh Xuan Commune, Binh Chanh District with an estimated bid package price of 6,342 billion VND, capital from the District Budget.

On November 27, 2022, the Binh Chanh District Construction Investment Project Management Board signed Decision 445/QD-BQLDA approving this bid package for Hong An Bridge and Road with a winning bid price of VND 6,322 billion, the savings rate for the state budget is about 0.31%.

On March 3, 2023, the Binh Chanh District Construction Investment Project Management Board continued to sign Decision 56/QD-BQLDA approving the Hong An Bridge and Road Package for the Lighting System Construction Project under the Project to Upgrade and Expand Nguyen Cuu Phu Street (Huong Lo 4) in Binh Chanh District.

The package uses the city budget, with an estimated package price of 13.194 billion VND, the winning bid price is 13.184 billion VND, equivalent to a savings rate for the budget of only about 0.07%. Hong An Bridge and Road is the only contractor participating in the bidding for the above 2 packages of the investor, the Management Board of Investment and Construction Projects in Binh Chanh District.

In addition, Hong An Bridge and Road also won two consecutive bids from the investor, the Project Management Board for investment and construction of traffic works in Ho Chi Minh City in the final phase of 2022. It is worth mentioning that Hong An Bridge and Road is the only unit participating in the bidding for these bids.

Specifically, in the bid package "Construction of bridgehead roads (including trees) - Construction of Long Kieng bridge, Nha Be district", the Management Board of Investment and Construction of Traffic Works signed Decision 6437/QD-BQLDAGT-KHĐT approving the bid package for Hong An Bridge and Road on December 13, 2022. The estimated price of the bid package is 83,468 billion VND, the winning bid price is 83,418 billion VND, the savings rate is only about 0.06%.

Then, on December 15, 2022, the Management Board of Traffic Construction Investment Projects also signed Decision No. 6488/QD-BQLDAGT-KHDT, approving the project "Construction No. 4: Construction of parallel road of National Highway 50 from Km2+800 to Km4+200 - Construction and expansion of National Highway 50, Binh Chanh district" for Hong An Bridge and Road. The estimated price of the package is 240.456 billion VND while the winning bid price is 240.306 billion VND, the savings rate is only about 0.06%.

In the same year 2022, Hong An Bridge and Road also won 3 consecutive bids from the Waterway Management Center. It is worth mentioning that in 2 out of 3 bids, only this company participated in the bidding.

The first package is the package "Repairing the Te Canal embankment Km 1+085 - Km 1+145 and Km 1+265 - Km 1+300 (section from house number 273 to house number 289 and section from house number 331 to house number 337 Tran Xuan Soan Street, District 7)" approved by the Waterway Management Center under Decision No. 148/QD-TTQLDT on April 7, 2022. The package price is 9.785 billion VND, the winning bid price is 9.765 billion VND. The savings rate is about 0.2%. The funding source for the two packages is from the Traffic Maintenance Fund (Waterway Maintenance) in 2022.

The package for repairing the Kenh Te embankment, section Km 1+085 - Km 1+145 and Km 1+265 - Km 1+300, Hong An Bridge and Road was awarded with a savings rate of 0.2%.

Then, on August 2, 2022, the Waterway Management Center also signed Decision No. 225/QD-TTQLDT approving the 2022 Waterway Vehicle Repair Package for Hong An Bridge and Road. The package has an estimated price of VND 2,057 billion, the winning bid price is VND 2,056 billion, the savings rate is only 0.1%.

Notably, in this bid package, the two units participating in the 2022 Watercraft Repair bid package are Hong An Bridge and Road and Vietnam Sea Tourism Service Trading Company Limited. The contractor Vietnam Sea Tourism Service Trading Company Limited offered a bid price 6.5% lower than the bid price of Hong An Bridge and Road, at only VND 1,922 billion. However, Hong An Bridge and Road still won this bid with a tight savings rate for the state of only 0.1%.

Finally, the bid package "Filling the eroded hole on the left bank of the Saigon River in Thao Dien Ward, Thu Duc City" was approved on November 14, 2022 under Decision No. 374/QD-TTQLDT of the Waterway Management Center. The bid price is 12.4 billion VND, the winning bid price is 12.387 billion VND. The savings rate of the bid package is 0.1%.

Winning rate up to 91% but business is... ineffective

Hong An Bridge and Road Construction Service Trading Company Limited is headquartered at 349/141 Le Dai Hanh, Ward 13, District 11, Ho Chi Minh City. The company's legal representative is Nguyen Nhat Hong An. The company was established in 2008 with the main business activity being road construction.

Regarding the bidding history of this unit since its establishment, Hong An Bridge and Road has participated in 88 bid packages, of which it won 80 packages, only failed 4 packages, 3 packages have not had results and 1 package has been canceled. Thus, the winning rate of Hong An Bridge and Road is up to nearly 91%.

The total value of the bid packages won by Hong An Bridge and Road is up to 3,691 billion VND, including bid packages participating as a joint venture and independent contractor. In which, the total value of the bid winning as an independent contractor of Hong An Bridge and Road is 1,007 billion VND. The total value of the bid packages won as a joint venture is 2,684 billion VND.

Hong An Bridge and Road has competed with 27 contractors in 19 packages as an independent company, winning 11 packages. This unit has formed a joint venture with 12 contractors in 10 packages, winning 9 of them. Thus, the total number of packages that this unit has won when competing with other contractors is 20 packages. Hong An has participated in 60 packages without competing with any other units. According to statistics, the lowest bid rate when participating in the packages of this company is 95.45%.

With a high winning rate, Hong An Bridge and Road's revenue also increased sharply each year in the period 2018-2021. In 2021, this enterprise recorded revenue of 545 billion VND, an increase of more than 60% compared to 2018. The growth momentum slowed down in 2022 with revenue decreasing slightly but still at a high level of 544.6 billion VND.

However, the profit of Hong An Bridge and Road is quite thin, only less than 10 billion VND per year. In 2022, the after-tax profit of this enterprise decreased by more than 19% compared to 2021, down to 7.5 billion VND. The net profit margin is less than 1.4%, corresponding to 100 VND of revenue generated, only 1.3 VND of profit is earned.

Hong An Bridge and Road's profits have shrunk amid signs of rapidly increasing liabilities. By the end of 2022, the company's total liabilities were over VND181 billion, up 41% compared to the beginning of the year. This is the highest level of liabilities of Hong An Bridge and Road since 2019. At the end of 2018, liabilities were nearly 9 times higher than equity.

This figure has now dropped below 1 due to Hong An Bridge and Road's many huge capital increases in recent years. From 20.5 billion VND at the end of 2018, the company's equity has increased nearly 11 times after 4 years to more than 220 billion VND at the end of 2022. Increased capital, increased debt, expanded scale but declining business results show that this company's ability to use capital and assets is inefficient.

Gia Son - The Anh

Source: https://www.congluan.vn/cau-duong-hong-an-lien-tiep-trung-thau-tai-tp-hcm-voity-le-tiet-kiem-thap-nhung-ket-qua-kinh-doanh-van-thut-lui-post261603.html