Building Material Prices Surge 40 per cent, Contractors Whining
Construction material prices have surged 30 per cent-40 per cent since the last quarter of 2007, pushing contractors into a wall corner and forcing them to even consider defaulting on some unfinished projects.
Iron and steel prices have gone up 55 per cent since last October respectively to VND16,000 and VND20,000 per kilogram, while brick prices are 50 per cent higher.
The Hanoi-based Vietnam Construction and Import-Export Joint Stock Corporation’s deputy CEO, Nguyen Thanh Phuong, said Tuesday the skyrocketing prices were a “nightmare” to contractors, especially those who had signed full “price packages” without price adjustments.
Some contractors, unable to afford the prices, could run away from projects they had undertaken.
In Ho Chi Minh City, the chairman of the state-owned Saigon Construction Corporation (SGC), Ho Lap Phuc, said SGC had signed deals worth about VND2 trillion (US$125 million) last year to construct buildings.
Progress on all of them had slowed down as a result of the price shocks, he said.
Song Da Thang Long Joint Stock Company, the developer of the Van Khe urban area in Ha Tay Province near Hanoi, said 14 building contractors had recently turned down its apartment block project.
Some property investors who signed contracts to sell apartments before the building material price hikes now face financial difficulties.
Many contractors have been unable to pay suppliers on time. (Thanh Nien Daily Online)
Vietnamese
