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

Sand prices "dance" and make construction contractors tired

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

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

There was a time when the construction sand market was in a state of scarcity. In particular, in some places, the price of sand increased to over 700,000 VND/m3, despite the abundant supply when many new sand mines were licensed for exploitation.

The sharp increase in sand prices has made many construction contractors in Quang Ngai province impatient. Because the estimated construction price that has been appraised and approved is much lower than the actual price on the market.

Mr. HVN, director of a construction company, said that the inconsistent sand prices listed at the mine, the sand prices on the market, and the sand prices in the construction estimate are the reasons why the sand market keeps "dancing". The contractor himself is the unit that suffers the most because he has to worry about the progress of the project and has to be "close" to the mine owner to buy sand.

"Construction enterprises are facing many difficulties. The sand price assessed to calculate the estimated price is too low, while the actual sand price on the market is much higher. That is not to mention the average transportation cost per kilometer is about 3,500 VND/km. We must look at the root of the problem, not rely on administrative orders to bring the sand price back to reality," said Mr. HVN.

High sand prices and scarcity make construction contractors impatient.

Similarly, Mr. NVL, the owner of a construction company, said that the project he is working on was awarded a contract in 2023, and the estimated price of sand was slightly more than 300,000 VND/m3. But in reality, to buy sand, one has to "go around" for a price of over 450,000 VND/m3. Meanwhile, the project will not be completed until 2025, and now the price of sand is almost double the estimated price.

"It is not easy to readjust the estimated price for input sand. Everyone sees these shortcomings but no one solves them for businesses. In 2023, even though the tax price for sand is 150,000 VND/m3, people have to queue to buy sand. Construction businesses need stability in material prices, especially sand, so that they do not have to work while worrying about a lack of sand and fluctuating prices," Mr. NVL suggested.

According to Mr. NVL, the sand market is still very hot, and sand sources are not abundant. There are times when drivers bring their cars to the yard to wait in line to buy sand at the mine, but sometimes the mine owner "shakes his head". Not to mention the request to issue invoices or sell at the published price.

Contractor fault?

Many construction enterprises believe that the high price of sand is due to the inadequate price management of the Quang Ngai government. Specifically, in 2023, the taxable price is 150,000 VND/m3, the selling price of sand is stable although it does not decrease. Meanwhile, in 2024, the taxable price increases to 230,000 VND/m3.

Obviously, according to the current tax calculation, the state only collects 15%, equivalent to about 12,000 VND/m3, but this pushes the winning auction price up, thereby increasing the price of sand on the market.

"The increase in sand prices and the unstable market are largely due to the province's price management," a business representative pointed out, adding that another reason is that underground mine owners are colluding and the construction sand market is being priced.

Many contractors believe that one of the reasons for the high price of sand is due to the poor price management of the government.

A leader of the Department of Finance said that in addition to the regulations of the Ministry of Finance , the unit also bases the unit price to calculate resource tax on sand on the basis of the declared price of the mine owners. From there, the unit has just built the unit price to calculate tax in 2024 for each cubic meter of sand at 230,000 VND.

"It is clear that there is no such thing as a poor price management staff unit, but it is based on many factors, including the declarations of the mine owners," this leader shared.

Disagreeing with the contractors, Deputy Director of Quang Ngai Department of Construction Nguyen Huu Hong said that if the market price is high, the input will be high, affecting the total investment of the projects. Therefore, the department has calculated, balanced the gains and losses and built a new price list to advise the Provincial People's Committee on tax calculation.

"The department's view is to bring prices to the same level as other provinces in the region so that sand products can increase their competitiveness. At the same time, reduce selling prices to help contractors benefit," said Mr. Hong.

According to Mr. Hong, the construction contractors' statements are baseless, because the current sand prices at the mines are declared and input and output invoices are issued, and that is the price announced at the mine. When making the estimate, the consulting unit has taken into account and included in the estimate, including transportation costs and VAT.

"The province has stipulated that mines must declare and publish prices, so mines must sell at the declared price. But in this case, if the mine owner does not issue an invoice but the contractor still agrees to buy, it is clear that this is illegal sand and the contractor is complicit.

In theory, the mine owner violated the law by raising the selling price compared to the declared price and not issuing invoices, showing signs of tax evasion. The contractor knew the mine owner violated the law but did not report it to the authorities. On the contrary, they helped buy at high prices. The mine owner even sold without invoices but still accepted to buy. The contractor complained about high sand prices but was not from the same province, so the government could not reduce the sand price," Mr. Hong pointed out.

Leaders of the Quang Ngai Department of Construction said that construction contractors assisted the mine owners in selling sand at high prices.

As reported, Quang Ngai is the capital of sand, but through the application of the method of calculating resource tax in 2024, including construction sand from 150,000 VND/m3 to 230,000 VND/m3, the yellow sand market has increased sharply and at times there has been a shortage. Therefore, the Department of Construction of this province is proposing to bring the sand price back to the average level by lowering the rental price 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