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Many construction projects, including some worth millions of US dollars, have been left idle due to loopholes in the regulation on compensation, according to construction officials.

The regulation, which was issued last year, states that construction projects which cause water leakage and structural damage to neighbouring structures must stop work until compensation is paid.

If the two sides are unable to agree on the amount of compensation, they must bring the case to court. This has caused a dilemma for contractors, since cases winding their war through the courts can delay work for a long time.

An example of this involves a construction project of an apartment building at 14 Phan Ton Street in HCM City's District 1. Work had been suspended because of damage to a neighbouring house caused by the construction. The owner of the damaged home asked for compensation of VND1 billion (US$60,000), but the construction project owner agreed to pay only VND300 million. After a year of unsuccessful negotiations, the two parties brought their dispute to court.

The legal proceedings surrounding this incident could take several months or even several years. And this, according to the construction project owners, will push them into serious financial trouble.

Excessive demands

Nguyen Tan Ben, director of the city's Construction Department, said he suggested that the Government should help construction enterprises that are hurt by demands for excessive compensation.

The department proposed that construclion work should continue if the contractor ensures that the project is safe, certified by competent relevant authorities, and that continuation wouldn't impact the safety of neighbouring structures.

It further said that insurance com-panies should handle financial compensation of damages caused by the new construction projects.

The proposal has been approved by the Construction Ministry and the city People's Committee.

Source: Vietnam News

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