Contractors are desperate for leveling materials.

Báo Thái Bình•21/06/2023

The recent shortage of landfill materials, especially sand, has significantly impacted the progress of construction projects in Thai Binh province, causing considerable difficulties for contractors. Most contractors have had to find alternative solutions and face numerous risks and economic losses.

The main connecting road within the Thai Binh Economic Zone is currently undergoing roadbed excavation and embankment construction.

Supply does not meet demand.

The investment project to build the Southern Ring Road of Thai Binh City, the section from S1 bridge to the extended Chu Van An road, is a key transportation project of the province, commenced in May 2022 with a total investment of over 1,000 billion VND. After more than a year of implementation, the construction unit is currently working on bridge, culvert, and prefabricated components; excavating and filling the roadbed, laying geotextile fabric, and constructing sand piles to treat weak soil foundations in areas where land has been cleared, reaching approximately 80% of the project volume. To date, the disbursed value for the project has reached over 200 billion VND, of which the construction value is over 160 billion VND. However, the project investor is facing many difficulties due to significant cost overruns caused by rising material prices.

Mr. Vu Ngoc Tuyen, General Director of Thang Long Import-Export Investment Joint Stock Company (DragonGroup), said: "Never before has purchasing leveling materials been as difficult as it is now. The prices of all materials have increased sharply. We have had to contact and connect with many businesses, mine owners, and yard owners to supply leveling materials, but ensuring a timely supply for the project is still very difficult."

The third section of the connecting arterial road project in the Thai Binh Economic Zone is currently being expedited by contractors. With a length of approximately 13km, the demand for leveling materials for construction along this section is around 2 million ^m³ .

Mr. Hoang Dinh Hieu, from Xuan Quang Construction Company, the contractor for Line 3, stated: "The supply of leveling materials is the biggest concern for the consortium of contractors at this time. The demand is very high, but currently, the supply only meets about 1/8 of the required volume. The contractor has to contact suppliers from more distant provinces to obtain materials, thus significantly increasing transportation costs. We have to adjust technical solutions to ensure the requirements and schedule are met. Even so, the material shortage risks affecting the project's progress."

Facing numerous risks

Besides the issue of leveling materials, contractors also face fluctuating and rising prices of many key materials such as various types of steel (round steel, shaped steel, prestressed cables...), cement, asphalt, aggregate for cement concrete and asphalt concrete, yellow sand for cement concrete production... This is due to the high price of fuel and input materials and the scarcity of supply of these materials.

As a key project of the province, the coastal road project is expected to be completed by the end of this year. However, due to the scarcity and high cost of materials, construction companies have often had to work at a slow pace, waiting for materials to be supplied. This situation has affected the construction progress and risks delays. The project is estimated to require approximately 3.1 million ^cubic meters of sand for roadbed leveling, but only about 65% of the demand has been met so far.

Mr. Vu Van Toan, the construction supervisor for the coastal road project, stated: "At the time of preparing the cost estimate in early 2020, the main materials for the project were at a low price level (construction steel was about 12,000 VND/kg; black sand about 85,000 VND/ ^m³ ; diesel fuel about 12,500 VND/liter). However, with current prices, the project costs are being pushed up by about 20-30%."

The shortage of construction materials and the sudden surge in prices have put contractors at risk of incurring losses during project execution. The prolonged project duration has led to a series of other costs such as labor, project management, and opportunity costs. To overcome the shortage of leveling materials during construction, contractors have maximized the number of construction teams when materials are available, adjusted construction methods, switched from sand to crushed stone aggregate for loading, and utilized surplus soil. Simultaneously, by concentrating resources and proactively ordering materials in advance, they have saved costs. However, these are only temporary solutions. In the long term, intervention and management from relevant authorities are crucial to prioritize the exploitation of sand for leveling in key transportation projects. During meetings to address difficulties in construction projects, provincial leaders requested relevant departments and agencies, especially the Department of Natural Resources and Environment, to advise the province on supplementing land use planning, reviewing construction sand mines to proactively secure the supply of leveling materials for project construction; the Department of Construction needs to manage the timely and accurate announcement of construction material prices to better reflect market prices. Investors were urged to resolve difficulties for contractors and consider extending deadlines for packages at risk of delays due to material shortages. Furthermore, contractors hoped that the competent authorities would propose macro-level solutions to the Government to stabilize the market and ensure the supply of construction materials to meet current demand.