Competition among construction contractors is increasingly fierce.

Development opportunities are not very promising.

The representative of the Vietnam Association of Construction Contractors (VACC) said that although the economic situation in 2024 has many improvements, the economy has recovered, public investment has been boosted, the real estate market has positive changes..., looking at the business picture, the health of private enterprises is declining.

VACC leaders shared that about 70% of real estate enterprises are "lying still and waiting for the right time"; construction contractors are facing great difficulties in work, especially civil contractors, forced to cut staff, find work to maintain in many different ways to overcome existing problems such as: adjusting unit price standards and unit labor price standards; tax policies, preferential loan policies, outstanding debt issues and building a culture of construction contractors...

Unhealthy competition between businesses and construction contractors has caused many projects to deteriorate and become dangerous to people when put into operation. Photo: Hai Linh

Colonel Nguyen Tuan Anh - Deputy General Director of Truong Son Construction Corporation shared that although there has been progress in terms of norms and unit prices, there are still many difficulties that need to be resolved, such as the labor norms are still inadequate and have not followed the market unit prices, so it is necessary to continue to have opinions in Circular No. 13/2021/TT-BXD, on instructions on methods for determining technical and economic indicators and measuring construction volume; determining material prices at the mine is different between localities; site clearance is difficult...

There is a shortage of materials for traffic works, including earth and sand. Although there are special mechanisms in some localities, they only meet the progress requirements, but payment is still very difficult, there are no specific instructions, each place has its own way. Only daring to make provisional payments and provisional calculations, the more the contractor works, the more he loses, and the later post-auditing poses a very high potential legal risk.

In addition, Mr. Nguyen Tuan Anh added that the problem of dumping bidding competition is increasingly fierce, not only appearing in small contractors but now also in large, reputable enterprises. It is time to calmly reconsider if the situation continues, from reputable contractors to small and medium-sized contractors all participating in bidding low prices, to avoid the situation of unhealthy competition.

According to the leader of Truong Son Construction Corporation, reducing the price of a package by 12% is already impossible, but there is even a package for leveling the ground in Ba Ria - Vung Tau province with a price reduction of up to 50%. Now, many enterprises participating in the bidding reduce the price by up to 25, even 48%, which is considered very normal. At many times, the labor cost is up to 500,000 - 600,000 VND/person/day, while the prescribed unit price is only about 1/3, causing many difficulties for contractors.

In addition, Colonel Phan Phu - Chairman of Corporation 319 said that the payment problem is a big burden for construction contractors, including Corporation 319. Although there are regulations on payment according to a specific mechanism for resource mines serving project construction, however, the views and understandings of each locality are different. From there, it leads to contractors being paid at different rates, but basically contractors will have a lot of capital backlog.

In one project, Corporation 319 has completed the foundation and is currently grading and paving, but the payment progress is only 70% of the foundation, causing the company to face difficulties with capital and cash flow.

"Recently, participating in a bidding package for infrastructure leveling in Ba Ria - Vung Tau province worth 111 billion VND, a company bid only 58 billion VND, a discount of up to 48%. That shows that the employment problem for construction enterprises is very difficult and urgent. But if there is no re-evaluation, no solution from State management agencies, the "price reduction race" will have no end" - Mr. Phan Phu acknowledged.

Construction quality is affected

Unhealthy competition between enterprises and construction contractors, if they win the bid, will make it difficult to complete the project, or the quality of the project will be significantly affected. In many cases, projects are built with poor quality materials, affecting the life of the project.

The story of "advertising one thing, quality another" makes people spend money to buy but then receive a newly built project that is degraded, the utility services are not the same as when advertised... This poses many potential dangers for residents living in the project. The peak was when Typhoon Yagi recently made landfall, leaving serious consequences when many apartment windows were blown away or shattered by the wind; water seeped through the gaps, and plaster ceilings also fell off in pieces.

Structural materials expert, Master Pham Ngoc Trung said that Vietnam is a tropical country, the system of glass walls and large glass windows must meet requirements on safety, safety for users as well as energy saving requirements set forth in the Law on Efficient Use of Energy of Vietnam.

Glass products must be selected based on criteria, in which in addition to sound and heat insulation, attention must be paid to impact resistance, collision resistance, chemical resistance, wind pressure, and earthquake resistance. However, currently, it is only applied at the level of Vietnamese Standards - that is, it is only encouraged to apply but not required, lacking specific regulations and sanctions.

"Especially with the situation of unhealthy price competition between contractors to get jobs, there are investors using products of unknown origin or counterfeiting famous brands, leading to the situation that some projects and works put into operation for only 5-7 years have seriously degraded. People are the ones who suffer when they lose money and their lives are in danger" - Master Pham Ngoc Trung said.

Master of Economic Law Le Son Tung said that the sanctions for violations are still light, not enough to deter from the stage of trading and supplying construction materials to supervising construction quality; the stage of warranty and overcoming consequences is still taken lightly, superficially or the supervising unit does not have much experience...

"The recent super typhoon Yagi, which affected newly built apartment buildings, is a typical example of the situation where construction quality has not been closely monitored, technical standards related to load-bearing structures, defects in welding joints... have not been promptly assessed, potentially posing a risk of unsafety during construction operations. To create deterrence, it is necessary to consider revoking construction permits or prohibiting construction if the construction quality assessment is not guaranteed," said Master Le Son Tung.

 

The current situation of competitive bidding and dumping will cause the construction market to establish a new price level, much lower than the normal price. What is worrying is that contractors continuously petition the Government and ministries and branches to "untie" the standard unit price because the standard construction price is too low compared to reality, winning low bids but still petitioning to increase the standard unit price.

Colonel Nguyen Tuan Anh - Deputy General Director of Truong Son Construction Corporation

Source: https://kinhtedothi.vn/canh-tranh-giua-cac-nha-thau-xay-dung-ngay-cang-gay-gat.html