[Solar Power and Firewood]I Got Divorced Because of Korea

1.85 Billion Won Worth of Scrap 'K-Taiyang' Left Abandoned
Visiting the ODA Site in Quang Binh Province, Vietnam

[Summary of previous article] We met Nguyen Thi Anh (49) and Ho Thi Dam (65) in Ban Rao Con, Dong Hoi, Quang Binh Province, Vietnam. They said that the solar power equipment built through a Korean government aid project broke down within less than a year after its installation in 2016. However, the Korean government’s position was different. The project, which involved a $12 million (about 18.5 billion KRW) loan, started in January 2015, the equipment was installed in 2018, and maintenance ended in September 2019. The statements from the beneficiary country’s residents and the donor country’s implementing agency conflicted. The reporters decided to visit KT, the Korean contractor, and C Company, a Vietnamese subcontractor, to hear their side.

High-voltage power lines on the road from Ban Lao Kon village to Donghoi. Cities are connected by electric lines, but remote areas still lack electricity. Photo by Younghan Heo younghan@

The car entered the main road. High-voltage power lines reflected on the windshield. We drove about 20 more minutes along Truong Pham Road following the Nhat Le River. The office of C Company was exactly at the address shown on Google. We said we were from Korea and wanted to talk about the solar power project. We met the security guard, a guide, and a secretary in turn. After waiting about 10 minutes, a representative of C Company greeted us.

"Since you came from Korea, I am very cautious about where to start. It is true that we were involved in the Ban Rao Con solar power project."

The C Company representative, who participated as a subcontractor to KT in the Quang Binh Province solar power project, repeatedly clasped and unclasped his hands during the 30-minute meeting. He sipped water occasionally and sighed. He shifted on the sofa and bit his lips. To protect the source who spoke with difficulty, this article will not disclose his real name, company name, or photos.

He repeatedly said, "I think it is the fault of only some people," and "We do not want the relationship between Korea and Vietnam to deteriorate." The Quang Binh solar power project has been under a government local audit since July 19 this year. He said Vietnamese police visited him several times.

Solar Power Generation Project announced by the Ministry of Strategy and Finance on July 1, 2015. It includes the project procedures and the groundbreaking ceremony details.

According to our investigation, the flow of funds in this project is as follows.

'Korea Eximbank → Vietnamese government → Local government (Quang Binh Provincial People’s Committee) → Contractor KT → Local subcontractor'

Several contracts arise here. First, Eximbank signs a loan agreement with the Vietnamese government. This includes a loan of $12 million in government funds. The Vietnamese government sends this money to the financially tight Quang Binh Provincial People’s Committee. The local government provides funds to KT, the contractor selected through bidding. KT subcontracts to a local company to install the solar power equipment and pays them.

EDCF projects often involve tied aid (conditions requiring the donor country’s companies to win contracts). Although Korean companies won the Vietnamese government bid, the structure is such that local companies in developing countries receive subcontracts. The primary contractor is a Korean company, and the subcontractor is a Vietnamese company. Korean companies cannot fully understand local conditions, and hiring Korean workers would be unaffordable due to labor costs.

Materials that were pre-manufactured by a local company in Dongheyi to install solar panels are piled up in the yard, but they could not be used due to a mid-term contract termination.

From here, his claims begin.

He said KT did not settle payments according to the contract. They carried out road paving to transport solar power materials to Ban Rao Con village, grounding and civil engineering for solar installation. This was the first phase of panel installation and actual operation. To proceed to the second phase, the company purchased panels and ordered frames and battery boxes to support the panels.

The first phase was completed. From then on, payment settlements from KT were delayed. The money did not arrive on the remittance date. As payments were delayed, they could not cover invoices for materials purchased in advance. Eventually, before starting the second phase, they decided to terminate the contract. They canceled the contract while paying penalties. Because it was a government-to-government project, they did not expect payment delays.

"From a business perspective, this situation meant trust was broken, so I thought contract termination was appropriate. Of course, by taking the drastic step of termination, we expected KT to pay, but it immediately led to contract invalidation," he explained.

He said it took two years to receive payment. He also added that KT, as the primary contractor, seemed to delay settlement to lower the delivery price. He claimed KT engaged in so-called 'primary contractor bullying.'

He showed the backyard warehouse piled with solar retaining walls and materials purchased at that time.

Materials that were pre-manufactured by a local company in Dongheyi for solar panel installation are piled up in a warehouse due to a mid-contract termination.

"Probably those involved would know what these materials are used for just by looking at them."

Large steel structures were scattered among the bushes.

He grabbed the interpreter and said,

"Because of the delayed settlement, I divorced my wife."

"Divorced?"

"Yes. The company was in very bad shape then. It was the biggest crisis of my life. The financial problems were huge."

He said he had many ups and downs maintaining the business until now. He said many companies went bankrupt due to KT’s delayed settlements. Since subcontractors did not receive payments, they dismantled and sold installed solar equipment, and maintenance or defect repairs became difficult. The interpreter searched for local media reports supporting his claims and found them immediately.

Local media reports related to the Quang Binh Province solar power project. There was a high volume of searches from the project's initiation in 2015 up to the 2023 provincial audit conducted by the Audit Office.

Because of this, he claimed the Quang Binh solar power project deteriorated within less than a year after installation in 2016.

He concluded, "I am grateful just to be heard. I learn again that I must use past pain as a stepping stone to become a better company." When the reporters were leaving, he added one more thing.

"Next time, please send a proper company to Vietnam."

How much of his words should be believed?

He never disclosed evidence such as documents proving non-payment, contracts with KT, or other proof.

"What benefit would that bring me now? The police would come again and bother me."

The final stage of the investigation.

We had to hear from KT and Eximbank.

■Infographic page■

Solar Power and Firewood - Report from Ban Rao Con, Vietnam

(story.asiae.co.kr/vietnam)

What problems arise from splitting aid budgets?

(story.asiae.co.kr/ODA)

[Solar Power and Firewood] Searching for the Responsible Person continues

This project was supported by the Press Promotion Fund, funded by government advertising fees.

This content was produced with the assistance of AI translation services.