Investors appraise PM of bumps in road development

The Prime Minister has been given a list of obstacles investors face in road development projects including rising costs and outdated estimates.

The investors have asked for the PM’s assistance in resolving the difficulties they face.

The Vietnam Association of Road Traffic Investors (VARSI), which compiled the list, said that several problems were being encountered in implementing several key expressway projects that are either under construction or in the pipeline, including the North-South Expressway’s eastern sections for the 2017-2020 and 2021-2025 periods; the Nha Trang-Ban Me Thuot Expressway and the Chau Doc-Can Tho-Soc Trang Expressway.

Topping the list of problems is increasing material prices.

For instance, steel prices have increased by 20-60% since the beginning of 2021; and that of cement, asphalt, oil and other materials have also gone up. The increase in input prices, have in turn, increased the cost of project packages by 18-30% more on average, the association said.

The second problem was that the overall cost estimates for projects and cost limits for different works have become outdated. The cost for consulting and supervising has increased two or three fold, just to mention one kind of cost, it claimed.

Labor costs and overtime were other problem areas, followed by the management of state-funded construction contracts, which the association said was more complicated than the first three groups of problems. It said the government has asked different ministries and government agencies to address related problems, but they have not been solved.

The association also mentioned difficulties road investors and contractors faced in carrying out auxiliary works like concrete mixing stations or dumpsites due to the absence of regulations covering them.

Site clearance and resettling people affected by projects was the sixth and last group of problems listed by the association. It said the site clearance process was complicated and many of the affected people do not agree with compensation offered by project developers. This has prolonged site clearance and delayed project implementation, affecting construction quality.

The association requested the Prime Minister’s help in dealing with the listed obstacles so that investors and developers could complete works on schedule.