Announcement of construction material prices

"No more profit, maintain holding out"

These are the phrases that most clearly express the feelings of construction contractors today. Not only are small businesses affected, but the "big guys" in the construction industry are also in the same mood. The difficulty for construction companies is that it is very difficult to adjust prices or delay construction progress for contracts that have been won, meaning they are not making a profit, or even suffering heavy losses with the current increase in material prices.

Mr. Tran Quang Anh, Deputy Director of Thua Thien Hue Road Management and Construction Joint Stock Company (Road Construction Management) shared that the company has a "brand" in the transport industry for many years, but has never seen such difficulties as now. The difficulty is that when bidding for construction materials, the price of construction materials is low, when implementing the project, the price of construction materials (sand, soil, stone, steel, engine oil, etc.) doubles, while the price is not adjusted, investors only pay according to the announced price of the joint department: Construction and Finance.

On average, each year, the Road Construction Management Joint Stock Company bids for construction of about 10 projects. For example, up to now, the company is constructing the Phu My - Thuan An route, the Tam Giang lagoon west road and the two ends of the bridge leading to the Huong River overpass, Provincial Roads 10D, 10E, etc.

According to Mr. Tran Quang Anh, just calculating the price of the land filling on the Phu My - Thuan An route, which is more than 1.2km long, and the route west of Tam Giang lagoon, it is necessary to buy nearly 100,000 m3 of K95 soil from the mines in the Thuy Phuong hill area (Huong Thuy town). According to the unit price announced by the State at the time, it is 95,000 VND/m3; meanwhile, the actual purchase price is 185,000 VND/m3, an increase of more than 90,000 VND/m3, showing the number that the company suffered a loss. Besides the alluvial soil, there is also a large amount of crushed sand used for the filling soil, the announced price is 80,000 VND/m3, but the actual purchase price is nearly 150,000 VND/m3... In addition, not to mention the cost of labor, excavator shifts, bulldozers... all doubled, forcing the company to cover half of the loss.

The Provincial Traffic Construction Joint Stock Company has not only participated in bidding for construction projects and traffic works in Thua Thien Hue but also in Quang Tri. However, this company is "dizzy" when thinking about the price of construction materials when announcing the bid compared to the actual price in the market.

The leader of the Provincial Traffic Construction Joint Stock Company explained that not only steel has increased but many raw materials such as cement, sand, and stone have also increased. If compared to the bidding price, it is certain that it will have a big impact on the signed construction contracts. In fact, the company is in a situation where it is no longer profitable, maintaining it to make short-term profits to sustain long-term profits.

“This reality makes it extremely difficult for us to implement the project. It is difficult for investors to agree to extend the construction schedule or adjust the contract price because they are also legally bound by the project and construction progress,” said this leader.

Dilemma

According to our research, the high price of construction materials has many factors: low reserves of soil, sand and stone mines; increased gasoline prices, increased transportation costs, trucks transporting goods have to cut the expansion part into the container... The increase in construction material prices is also one of the reasons why many contractors are currently in a "dilemma", many projects are behind schedule, especially bridge and road construction items in the Green Urban project, Hue City, causing local people to lose trust.

Sharing about the price of construction materials, a leader of the District Investment Project Management Board said that currently many businesses and contractors "avoid" bidding for construction works and projects because they see immediate losses due to the difference between the announced price and the actual price, but there is no way to adjust the announced price to bring it closer to the market price.

The leader of the Provincial Traffic Construction Investment Project Management Board said that for a long time, the unit has been conducting bidding, either by selecting a package or adjusting the price. For package contracts, the unit price is fixed, so recently, the unit has also received many complaints from businesses about the unit price offered by the State being lower than the actual market price.

It is true that businesses are complaining about difficulties, however, in terms of State management, project management boards and investors all rely on the announced prices of the joint departments: Construction and Finance to build the bid package price, as a basis for organizing bidding, signing contracts, payment, and acceptance of projects using State capital.

According to the representative of the Department of Construction, the price announcement is based on documents, information, prices provided by the mines, and invoices sent from the localities. However, each mine of soil, rock, sand, etc. sends different prices and the assessment is based on information sent by the units and localities as a reliability for the announcement...

The fact that the announced price of construction materials is lower than the market price has been recognized by the relevant departments and agencies. This is a standard "measure" that not only the Construction and Finance sectors are concerned about, but has become a common issue of the province that needs to be discussed and resolved soon so that businesses and contractors do not fall into the current difficult situation.

Source