Price hikes leaving constructors short of building materials to be stabilised

The Government Office released Official Letter No.9585/VPCP-CN on December 30, transmitting Deputy Prime Minister Le Van Thanh's directive for the Long Thanh International Airport Project's execution.

The DPM directed the Ministry of Construction (MoC) to stabilise the building materials market within its jurisdiction; inspect and navigate the Department of Construction in other localities in announcing a proper construction material price, and stabilise construction price indexes in accordance with regulations.

It was also requested that Dong Nai provincial government directs relevant agencies to work together with the ministry to stabilise the market, as well as publicise construction material prices and construction price indexes in accordance with regulations and market fluctuations, also ensuring proper management of construction investment costs for Long Thanh International Airport project.

According to the Vietnam Association of Construction Contractors (VACC), several steel businesses elevated their prices in October, which posed numerous financial challenges for constructors.

The reason for this is that the price of domestic coal climbed by an average of 7-10 per cent, coupled with increases in oil prices by more than 10 per cent and a series of additives used in cement manufacture. Meanwhile, coal expenses contribute 40-45 per cent to the cost of cement.

The MoC also estimated that the construction price index grew by 3.65 per cent in the first nine months of 2021 compared to the same period in 2020, mostly as a result of the rising price of building materials such as steel, asphalt, and cement.

The sudden rise in the prices of a number of critical building components is posing risks for many builders and constructors who might be confronted with significant losses and bankruptcy, the VACC said.