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Vietnam Real Estate - Contractors for Ho Chi Minh City public projects are having to carry out below ground constructions in congested areas and contend with soaring raw material prices.

The management of the World Bank-funded Nhieu Loc – Thi Nghe canal project said work on a drainage system in Binh Thanh District’s Nguyen Cuu Van Street last January came up against water pipes and power and telephone cables.

Phan Hoang Dieu, the project manager, said though the contractors had asked the utilities to provide plans of their underground facilities and carried out exploratory digging, they had failed to avoid the underground obstructions.

It took the contractors a lot of time to get around them but they were persuading the utilities to cooperate, she said.

When some of the pipes and other facilities could not be relocated, the contractors had been forced to change drainage locations, she said.

The state-run Saigon Transport Project Management Company, the contractor for one building package in the Phu Dinh River Port Project in District 8, said it had to halt construction in 2007 after hitting an underground electric cable.

Contractors also complained that the jump in construction material prices and labor costs barely left them any profits.

Many refuse to bid for new infrastructure projects.

Le Toan, deputy head of the city’s Department of Transport and Public Works, said prices of some materials had risen three-fold since the end of last year.

A director of an infrastructure construction company in Binh Thanh District, who asked to remain unnamed, said Monday that the price of a brick had gone up from VND400 in late 2007 to VND1,200 now.

Steel prices had jumped from VND10,000 to VND17,000 per kilogram, he said.

Nguyen Huu Hiep, deputy director of Trung An Water Supply Company, said some contractors refused to continue work after the prices of plastic pipes, cast iron equipment and some other materials had risen, badly affecting a plan to improve water city supply.

Pham Xuan Loc, another offici from Trung An, said work to develop water supply systems fo Go Vap District’s Ward 15 and Le Duc Tho Street had been suspended after contractors demanded higher payments.

Hiep said though the city People’s Committee and the Department of Construction allowed payments to contractors based on bills, his company had to await instructions from SAWACO.

Le Toan said a wage hike, effective from January 1 this year also increased contractors’ costs.

Now, domestic companies based in Hanoi and Ho Chi Minh City have to pay their workers a minimum wage of VND620,000, and foreign companies VND1 million, up from VND450,000 and VND710,000.

Reported by Mai Vong – Dinh Muoi
(Source: DiaOcOnline.vn - Thanh Nien News)

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