Waiting for the province to reduce sand prices, construction businesses are restless.

The fluctuating price of sand is exhausting for construction contractors.

Before 2020, the price of yellow construction sand in Quang Ngai fluctuated around 300,000 VND/m3 at the construction site. However, in recent years, the construction sand market in this province has seen a sharp increase.

Sand prices in Quang Ngai are currently hovering around 500,000 VND/m3 and are sometimes scarce, while the local sand reserves amount to hundreds of millions of m3.

At one point, the construction sand market experienced a shortage. In particular, in some areas, the price of sand rose above 700,000 VND/m3, despite abundant supply as many new sand mines were licensed for exploitation.

The sharp increase in sand prices is causing anxiety among many construction contractors in Quang Ngai province. This is because the approved construction cost estimates are significantly lower than the actual market price.

Mr. HVN, the director of a construction company, believes that the inconsistency between the listed price of sand from the mine, the market price, and the price of sand in construction cost estimates is the reason why the sand market is constantly fluctuating. Contractors are the ones who suffer the most because they have to both manage project deadlines and maintain close relationships with mine owners to purchase sand.

"Construction businesses are facing significant difficulties. The appraised price of sand used to calculate project costs is too low, while the actual market price is much higher. This doesn't even include transportation costs averaging around 3,500 VND per kilometer. We need to address the root of the problem, not just use administrative orders to bring sand prices back to reality," said Mr. HVN.

High sand prices and scarcity are making construction contractors anxious.

Similarly, Mr. NVL, the owner of a construction company, said that the project he is working on, which he won the bid for in 2023, had a sand price slightly higher than 300,000 VND/m3 in the estimate. However, in reality, to buy sand, he had to "go around" and pay over 450,000 VND/m3. Meanwhile, the project is not completed until 2025, and now the price of sand is almost double the estimated price.

"Adjusting the estimated price of input sand is also not easy. Everyone sees these shortcomings, but no one is solving them for businesses. In 2023 alone, even though the tax price for sand was 150,000 VND/m3, people still had to queue to buy sand. Construction businesses need stability in material prices, especially sand, so they don't have to worry about sand shortages and fluctuating prices while working," Mr. NVL suggested.

According to Mr. NVL, the sand market is currently very hot, and the supply is not abundant. There were times when drivers brought their trucks to the quarry and lined up to wait their turn to buy sand, but sometimes the quarry owner would "shake their head." This is not to mention the requests for invoices or sales at the published price.

Is the fault with the contractor?

Many construction businesses believe that the high price of sand is due to inadequate price management by the Quang Ngai provincial government. Specifically, in 2023, the taxable price was 150,000 VND/m3, and although the selling price of sand did not decrease, it remained stable. However, in 2024, the taxable price increased to 230,000 VND/m3.

Clearly, under the current tax calculation method, the state only collects 15%, equivalent to about 12,000 VND/m3, but this drives up the auction price for winning bids at mines, thereby increasing the price of sand on the market.

"The increase in sand prices and the instability of the market are largely due to the province's price management," a business representative pointed out, adding that another reason is collusion among underground mine owners, leading to price manipulation in the construction sand market.

Many contractors believe that one of the reasons for the high price of sand is the government's poor price regulation.

According to a leader from the Department of Finance, in addition to the regulations of the Ministry of Finance , the unit also bases its calculations of resource tax rates for sand on the declared prices of the mine owners. From there, the unit established a tax rate of 230,000 VND per cubic meter of sand for the year 2024.

"Clearly, it's not a matter of the pricing advisory unit being incompetent; it's based on many factors, including the declarations of the mine owners," this leader shared.

Disagreeing with the contractors, Nguyen Huu Hong, Deputy Director of the Quang Ngai Department of Construction, stated that high market prices lead to high input costs, impacting the total investment of projects. Therefore, the department has calculated and balanced the gains and losses and developed a new price list to advise the Provincial People's Committee on tax calculation methods.

"The department's view is to bring prices in line with other provinces in the region so that products containing sand can become more competitive. At the same time, we aim to reduce selling prices to benefit contractors," Mr. Hong said.

According to Mr. Hong, the construction contractors' claims are unfounded, because the sand currently at the mines all has declared prices and input and output invoices, and those are the prices published at the mine. When preparing the cost estimate, the consulting unit has taken these factors into account and included transportation costs and VAT in the estimate.

"The province has stipulated that mines must declare and publish prices, and these mines must sell at the declared prices. However, if there are cases where the mine owner does not issue invoices but the contractor still agrees to buy, then it is clearly illegal sand trading and the contractor is complicit."

"Legally, the mine owner violated regulations by raising the selling price above the declared price and failing to issue invoices, showing signs of tax evasion. The contractor, however, knew about the mine owner's violations but did not report them to the authorities. Instead, they colluded with the owner, buying at inflated prices, even accepting the mine owner's sales without invoices. The contractor complained about the high price of sand but did not cooperate with the province to bring it down; instead, they colluded with the owner, making it impossible for the government to reduce the price," Mr. Hong clarified.

The head of the Quang Ngai Department of Construction believes that construction contractors are colluding with mine owners to sell sand at inflated prices.

As reported, Quang Ngai is a sand capital, but the application of the 2024 resource tax calculation method, which increased the tax on construction sand from 150,000 VND/m3 to 230,000 VND/m3, caused the price of yellow sand to skyrocket and at times become scarce. Therefore, the Provincial Department of Construction is proposing to bring the price of sand back to an average level by lowering the tax calculation rate to 150,000 VND/m3.

Source: https://www.baogiaothong.vn/cho-tinh-keo-giam-gia-cat-doanh-nghiep-xay-dung-dung-ngoi-khong-yen-192241015161150885.htm