Huge cost hikes at Hai Phong city’s projects

Most construction projects in the northern port city of Hai Phong are running well above their initial cost estimates, with the cost hikes in some cases reaching thousands of billions of VND, according to a recent inspection by the Government Inspectorate.

huge cost hikes at hai phong city’s projects hinh 0
The construction site of Hoang Van Thu Bridge in Hai Phong city (Source: VNA)
The findings were announced by the Government Inspectorate after it completed an inspection on the implementation of construction investment management regulations in Hai Phong for the 2017-2020 period.

The cost of a project to upgrade Road 356 in the city, which was approved in 2010 with total investment of VND315 billion (US$13.7 million), increased to almost VND1.3 trillion (US$49 million).

Another project, Dinh Vu Sea Dyke, approved in 2010 with investment of VND998 billion (US$43.9 million), saw a cost hike of more than VND3.2 trillion (US$140.9 million). This project is still waiting for capital at the moment.

The southeastern ring road of Hai An district was approved in 2009 at a cost of VND886 billion (US$39 million), but was adjusted to more than VND2 trillion (US$88 million) in 2012.

Several other projects were also on the list, including the Cat Ba Fishing Boat Wharf project, Tran Phu High School construction project, a student apartment building project and the Khue 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.

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

While Hai Phong city’s 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 Dinh Vu Industrial Zone main road project was 25 months behind schedule and the Khue Bridge construction project was 15 months delayed. For the Tran Phu 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 Dinh Vu Industrial Zone, the Dinh Vu Sea Dyke Project and the Ngo Quyen 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 Hai Phong city’s authorities be disciplined for the violations and problems mentioned.

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