VIETNAM'S BUILDING PROJECTS SLOW ON HIGHER MATERIAL COSTS
HANOI, Dec 12 Asia Pulse - Work at several public construction projects in Ho Chi Minh City slowed to a standstill following news of higher prices for building materials, according to project contractors.
Construction on the Nguyen Van Cu Bridge project, which connects Districts 1 and 5 to Districts 4 and 8, is far behind schedule as contractors find themselves having to recalculate their costs to account for material costs that are greater than what they first estimated when they began the project.
Nguyen Ngoc Ngu, Bridge Company No 14 supervisor overseeing the construction of Nguyen Van Cu Bridge projects bidding package No 1, said the company would lose about VND9 billion (US$560,000) with the extra expenses. The contract was signed for a construction cost of VND39 billion (US$2.4 million).
Le Hoang Bao, director of Construction Company No 508s HCM City branch said the company would pay an additional VND36 billion ($2.25 million) for material costs, which are an average of 23 per cent higher than what they were when the contracts were first signed. Construction Company No 508 is the contractor for bidding package No 2 and No 3 of Nguyen Van Cu Bridge project.
The price of steel skyrocketed by 50 per cent this year compared to last year while the prices of cement and sand jumped by 30 per cent, according to project contractors.
The HCM City Transport and Public Works Company said after its project was delayed for one year due to clearance procedure, it now faces extra costs of construction materials. The company is the contractor for the project to widen Nguyen Thai Son Road in Go Vap District and Tan Phu Trung Road in Cu Chi District.
"If the company continues the project, it will face losses," said a company official.
Construction is moving slowly as company officials wait for documents from the city to determine the extra costs, he said.
Despite the recently issued Decree No 99/2007/ND on management of construction expenditures, including calculating extra costs for contractors, city officials have not issued guidance documents to implement the decree, the official said.
Le Hoang Ha, director of the management board of Go Vap District construction project, said if contractors are not compensated, construction will be delayed.
"The management board has petitioned city agencies to consider extra cost payments for contractors but the procedures are very complicated and time consuming," Ha said. |
