Soaring steel prices hinder projects

Of the sections of the North-South Expressway’s eastern cluster under construction, seven public investment sections will be urgently completed this year, excluding three under the build-operate-transfer model, and My Thuan 2 Bridge set to finish in 2023.

However, the sharp increase in the world’s oil prices, local steel, and construction material costs over the past two months have directly affected these expressway projects.

Duong Viet Roan, representative of the investor of some expressway component projects and director of Thang Long Project Management Unit under the Ministry of Transport (MoT), said, “The expressway sections have been constructing the foundations, bridges, and culverts, so they are affected by the rising price of steel and other construction materials. However, we are completing the road surface which uses a lot of asphalt, so the high price of petrol will greatly affect the projects.”

Contractors are still carrying out construction according to the price in already-signed contracts, while adjustments are being studied by the MoT and the Ministry of Construction, which have asked for comments from related ministries and agencies.

Tran Van Thi, director of the My Thuan Project Management Unit under the MoT, said that the recent increase in oil and steel prices is a temporary change and they are evaluating and considering the impacts and solutions. “The fluctuation of iron and steel prices last year has greatly affected the progress of sub-projects, some of which have been negotiated to adjust prices,” said Thi.

Similarly, a number of projects for upgrading the North-South railway are also hit by high prices, construction costs are soaring rapidly, causing a headache to both contractors and investors. The projects progress has been delayed for a time to consider the adjustment of bid package price or wait for the drop of steel price. “The adjustment of the bid package price must be in line with the status of each project and current regulations. If not eligible for the price adjustment, the contractor will have to bear increased costs,” said Vu Hong Phuong, director of the MoT’s Railway Project Management Unit.