The Vietnam Trade Office in Saudi Arabia has warned Vietnamese buyers of rail tracks from the Gulf state that unscrupulous sellers are failing to confirm standby letters of credit (L/Cs) in deals for used rail tracks.

The trade office says it has received complaints about agents in Saudi Arabia offering and agreeing to sell new, substandard and used rail tracks but then reneging on deals once they have received a standby L/C.

Attractive proposition

Working through agents, sellers offer quantities of between 2-10 million tonnes and a competitive price of just US$175 per tonne.

Sellers also offer a further 20 per cent discount if the buyer is prepared to pay 20 per cent of the order value in advance.

L/C terms

Buyers are also required to open a standby L/C at an international bank. But according to the trade office, after the buyer opens an L/C, the seller fails to have it confirmed yet continues to offer the same stock to different buyers.

The agents often provide unclear information about the company and its representative as well as a fake address according to the trade office.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.