Developers face a long winding road

Ho Chi Minh Highway Project Management Unit director Pham Hong Son recently halted the highway second phase construction’s 80 bid packages.

The Ho Chi Minh Highway project reportedly suffers the most among 78 transport engineering projects with investment capital sourced from government bonds. It was allocated just VND1.357 trillion ($65.5 million) in 2011 which would be all disbursed by end of March and short of VND2.487 trillion, said Son.

Due to lack of capital on an extensive scale, in early March 2011 the Ministry of Transport (MoT) gave the green light allowing Ho Chi Minh Highway developer to delay executing some bid packages such as those involving the construction of Chon Thanh-Duc Hoa, Ca Mau-Nam Can and Pac Bo-Cao Bang road sections and some branch roads crossing Central Highlands region.

“The temporary delay is inevitable due the central budget’s inability to inject more capital into the project within 2011,” Son said, adding that early announcement of delay plan was the developer’s fair behaviour which would help contractors reduce loses.

It was said that without delay around 210-kilometre-long road sections and two big bridges under the Ho Chi Minh Highway would be open to traffic in late 2011.

The project on renewing and upgrading national highway 27’s section crossing southern Ninh Thuan province of Road Administration of Vietnam’s Project Management Unit 2 (PMU 2) is in a similar position.

“Ensuring traffic safety for a half-done delayed road which is still open to traffic puts big pressures on the developer. Pot-holes may occur after just a month of delay triggering a high level of traffic accidents,” said PMU 2 deputy general director Lam Van Hoang.

The project reportedly would have been completed in 2011 if sourcing sufficient capital. However, it was only given VND50 billion ($2.41 million) of the needed VND420 billion in total.

The MoT has presented several solutions to partly relieve burdens on contractors at temporarily delayed projects such as paying off contractors the done workload, drawing minutes about half-done work which will serve as a basis for price revision at time of having additional investment capital and paying up arisen expenses.

“These solutions still fail to cover contractor losses,” Son said as alongside ensuring employment for workers at delayed projects, contractors saw their production and business plans all tumbled.