Mr. Tong Van Nga - Chairman of the Vietnam Association of Building Materials - proposed to take strong action against the situation of businesses raising prices of building materials - Photo: BD
Speaking with Tuoi Tre Online, Mr. Tong Van Nga - former Deputy Minister of Construction, Chairman of the Vietnam Association of Building Materials - expressed his indignation at the negative impacts of recent sand auctions in many localities across the country, especially the DB2B sand mine auction in Dien Tho commune (Dien Ban district, Quang Nam province) which ended in the early morning of October 19 with the winning result of 370 billion VND for a 159,000m³ sand mine.
Price gouging in sand auctions needs to be stopped
Mr. Nga assessed the auction results as "unreasonable" when calculating each cubic meter of sand to be up to 2.3 million VND, this is too high a price, many times higher than the average price of sand on the market.
Formerly the chairman of the Vietnam Concrete Association, Mr. Nga analyzed that the price of high-priced concrete is only 1.6-1.8 million VND/m³, while other types have much cheaper average prices. If we calculate the cost of sand at 2.3 million VND/m³, we can see the absurdity of the price.
Not to mention that the winning price is just the first step in the auction for sand exploitation rights. In reality, businesses must pay other taxes and fees from value added tax, resource tax, environmental protection fee, corporate income tax, etc., so the cost per cubic meter of sand will be much higher than the figure of 2.3 million VND/m³.
Mr. Nga warned that this is not the first time that an unusually high sand auction result has occurred in a locality. Previously, many provinces and cities also had a situation of high sand auction prices and then abandoned deposits.
"The government must re-evaluate these auctions, not allow price hikes, there needs to be control, and at the same time, businesses that violate auctions and inflate prices, causing market disruption, must be dealt with," Mr. Nga affirmed.
According to Mr. Nga, it is time to review regulations and legal corridors to clearly define the subjects entitled to exploit sand mines to avoid profiteering in mineral auctions and exploitation.
In particular, Mr. Nga said that the Vietnam Association of Construction Materials will have comments on the draft Law on Geology and Minerals that is being consulted.
Auction results are “up in the air”
High sand prices will negatively impact the construction materials market – Photo: NGOC HIEN
The general director of a construction contractor in Ho Chi Minh City said that a summary of sand mining auctions that occurred last year with unusually high bids and then voided deposits showed that these auctions showed signs of pushing up construction material prices for profit.
According to this person, sand is only an input material for the concrete industry. If the price of sand increases, it will cause difficulties for the construction industry as construction costs will also increase.
“The recent auction price for sand in Quang Nam is unacceptable. There is no construction sand on the market that costs millions of dong per cubic meter like that. Even in Ho Chi Minh City, the price of sand is only a few hundred thousand dong per cubic meter, but in Quang Nam, that price does not include mining costs, so it is really sky-high,” he said.
After the auction information caused a stir in public opinion, the Chairman of the People's Committee of Quang Nam province directed to temporarily suspend the recognition of the auction results and clarify signs of profiteering.
On October 19, many agencies such as the Department of Natural Resources and Environment of Quang Nam, the Provincial Police, the Department of Construction, the People's Committee of Dien Ban town... stepped in to verify the unusual sand mine auction under the direction of the Chairman of the Provincial People's Committee.
The company that won the auction, whose main business is accommodation, lost 3 million VND in 2023.
MT Quang Da Joint Stock Company (landlord at 461-463 Nguyen Huu Tho, Khue Trung ward, Cam Le district, Da Nang) is the enterprise that won the auction for sand mining rights with a winning price of 370 billion VND.
This company has tax code 0402147612, with Mr. Nguyen Sy Minh Tien (born in 2000) as the legal representative, this company was only established on May 11, 2022.
Notably, the main business line of this enterprise is short-term accommodation services (tourist accommodation business, motel business services).
In 2023, the company declared the number of employees as 5 people. The business results for 2023 were negative as the company declared a loss of 3 million VND.
Place to cancel auction results, place to bid high and then ask to cancel deposit
In Hanoi, auctions for sand mining rights were also held, with three businesses winning the auction with a total amount of about 1,700 billion VND. After nearly a year, the auction results of the three sand mines were canceled because the bidders violated the provisions of the Bidding Law.
In Quang Ngai, many businesses also auctioned sand mines and won the auction in 2023, but now in 2024 they have requested to return the mines and cancel the auction results.
Quang Ngai Provincial People's Committee has also requested relevant units to take strict corrective measures to avoid businesses "raising prices sky high, winning the bid and then running away" causing market disruption.
Clarifying signs of profiteering in sand auction in Quang Nam
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