Sunday, August 19 2018

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Huge cost hikes at Hải Phòng City projects

Update: July, 17/2018 - 09:00
The construction site of Hoàng Văn Thụ Bridge in Hải Phòng City. Contractor selection of the project was not conducted in line with recommendation from ministries, according to the Government Inspectorate. — VNA/VNS Photo Nguyễn Đức Nghĩa.
Viet Nam News

HẢI PHÒNG — Most construction projects in the northern port city of Hải Phòng are running well above their initial cost estimates, with the cost hikes in some cases reaching thousands of billions of đồng, according to a recent inspection by the Government Inspectorate.

The findings were announced by the Government Inspectorate after it completed an inspection on the implementation of construction investment management regulations in Hải Phòng for the period 2017-20.

The cost of a project to upgrade the 356 Road in the city, which was approved in 2010 with total investment of VNĐ315 billion (US$13.7 million), increased to almost VNĐ1.3 trillion ($49 million).

Another project, Đình Vũ Sea Dyke, approved in 2010 with investment of VNĐ998 billion, saw a cost hike of more than VNĐ3.2 trillion. This project is still waiting for capital at the moment.

The southeastern ring road of Hải An District was approved in 2009 at a cost of VNĐ886 billion, but was adjusted to more than VNĐ2 trillion in 2012.

Several other projects were also on the list, including the Cát Bà Fishing Boat Wharf project, Trần Phú High School construction project, a student apartment building project and the Khuể Bridge project.

According to the Government Inspectorate, all of these projects’ costs were adjusted from time to time and their construction time lengthened from four to seven years.

Contractors’ capacity untrustworthy

Examination of contractors’ competence revealed that many selected contractors were not capable of implementing the projects, namely CP Construction Company, IMICO – Phúc Lộc joint venture and ACC - IMICO - Phúc Lộc Joint Venture.

While Hải Phòng City authorities had made efforts to conduct State management over construction quality, the recent inspection discovered a number of quality and progress problems.

Land clearance delays caused tardiness in many projects. The Đình Vũ Industrial Zone main road project was 25 months behind schedule and the Khuể Bridge construction project was 15 months delayed. For the Trần Phú High School project, land clearance took almost five years.

Meanwhile, many projects were approved without an evaluation report on environmental impact, such as the construction of the main road in Đình Vũ Industrial Zone, the Đình Vũ Sea Dyke Project and the Ngô Quyền District resettlement project.

Investors in some projects reportedly portrayed their projects as urgent in order to shorten all biddings and contractor selection procedures. However, the inspection team found out that these projects turned out otherwise.

The Government Inspectorate therefore proposed that investment capital for many projects be reduced. It is also suggested that relevant Hải Phòng City authorities be disciplined for the violations and problems mentioned. — VNS

 

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