Vietnam’s Construction projects slow to a crawl

Construction News Vietnam

Ninety-nine per cent of construction projects in Viet Nam have fallen behind schedule, with red tape and delayed land clearance procedures seen as leading causes for the delays, Deputy Minister of Construction Bui Pham Khanh told a seminar held here yesterday by the Federation of Civil Engineering Associations (FCEA).

State-financed projects were not immune from the delays, Khanh noted. State-funded capital construction costs were equal to 40 per cent of gross domestic product, he said, so slow progress on projects was a huge waste to the State and detrimental to the public interest, he said.

Yet some major projects managed to stay on track, such as the Son La hydroelectric facility, which was completed two years ahead of schedule, saving about US$2 billion, he said. Keys to the project’s success were good preparation, sufficient land clearance compensation for residents in affected areas (about VND20 trillion or $952 million) and the proper selection of project management personnel and contractors.

Such projects were few and far between, however. FCEA president Tran Ngoc Hung said projects were sluggish in all aspects, including preparation and implementation.

Overlapping of regulations, cumbersome administrative procedure, incomplete development plans at national or local levels were all factors in delays, but insufficient survey and study could also result in changes to the location and scale of projects, he said.

“When implementing projects, land clearance is almost always the bottleneck, lasting for years.”

Resettlement areas also required infrastructure, including transportation systems, power and water supplies and schools.

Hung recommended that State should clear land to offer a “clean surface” before calling for bids on projects.

The head of the Ministry of Construction’s construction economics department, Pham Van Khanh, said that an improved legal framework would shorten the period of project implementation.

Currently, there was a lack of construction cost management tools including market database and construction indices, adding to time for computing estimates and making payments, he said.

Regulations on the contents of contracts, including obligations, responsibility and sanctions for relevant parties, were also insufficient or unsuited to international norms. These could cause disputes and require additional time to resolve, he said.


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