Contractors "thirsty" for landfill materials

The scarcity of filling materials, especially sand, in recent times has affected the progress of projects in Thai Binh, causing many difficulties for contractors. Most contractors have had to struggle to find solutions and face many risks and economic losses.

The connecting axis road in Thai Binh Economic Zone is under construction of roadbed excavation and embankment items.

Supply cannot meet demand.

The project to invest in the construction of the Southern Ring Road of Thai Binh City, from the S1 bridge to the extended Chu Van An Street, is a key traffic project of the province, which started in May 2022 with a total investment of more than 1,000 billion VND. After more than a year of implementation, the construction unit is currently constructing items of bridges, culverts and precast components; excavating and filling the roadbed, spreading geotextiles, and constructing sand piles to treat weak soil at cleared locations, reaching about 80% of the project volume. To date, the disbursement value for the project has reached over 200 billion VND, of which the construction and installation value has reached over 160 billion VND. However, the project investor is facing many difficulties due to large capital increases due to high material prices.

Mr. Vu Ngoc Tuyen, General Director of Thang Long Import-Export Investment Joint Stock Company (DragonGroup) said: Never before has purchasing filling materials been as difficult as it is now. The prices of all materials have increased sharply, we have had to contact and connect many businesses, mine owners, and wharf owners to supply filling materials, but ensuring timely supply for the project is still very difficult.

The contractors are focusing on speeding up the progress of Line 3 of the connecting road project in Thai Binh Economic Zone. With a length of about 13km, the demand for filling materials for construction on the line is about 2 million ^m3 .

Mr. Hoang Dinh Hieu, Xuan Quang Construction Company, the contractor of Line 3, said: The supply of landfill materials is the biggest concern of the joint venture contractor at this time. The demand is very large, but currently, the supply of materials can only meet about 1/8 of the volume. The contractor must contact suppliers from other provinces further away to get materials, so the transportation cost is much higher. We have to adjust the technical solution to ensure the requirements and progress set out. However, the lack of materials risks affecting the progress of the project.

Face many risks

In addition to the problem of filling materials, contractors also have to face the situation of fluctuating prices of many main materials such as steel of all kinds (round steel, shaped steel, prestressed cables...), cement, asphalt, stone aggregate for cement concrete, asphalt concrete, yellow sand for cement concrete production... The cause comes from the situation of high prices of fuel and input materials and the scarcity of supply of all kinds.

As a key project of the province, the coastal road project is expected to be completed by the end of this year. However, due to the scarcity of materials and high prices, there are times when businesses have to work at a slow pace, waiting for materials while working. This reality affects the construction progress, with the risk of being behind schedule. According to calculations, the project will need about 3.1 million ^m3 of sand to fill the roadbed, but up to this point, it has only met about 65% of the demand.

Mr. Vu Van Toan, commander of the coastal road construction, said: At the time of making the budget in early 2020, the main materials of the project were at low prices (construction steel price was about 12,000 VND/kg; black sand price was about 85,000 VND/ ^m3 ; diesel price was about 12,500 VND/liter). However, with the current prices, the project cost is being pushed up by about 20 - 30%.

Lack of construction materials and sudden price increases have caused contractors to face the risk of having to make up for losses when carrying out projects. The long project implementation period entails a series of other costs such as: labor, project management, opportunity costs... To overcome the lack of filling materials during project construction, contractors have increased the number of construction teams when materials are available, adjusted construction methods, switched loading materials from sand to crushed stone, and made use of excess soil. At the same time, by concentrating resources and proactively ordering materials in advance, costs have been saved. However, this is only a temporary solution. In the long term, intervention and management from authorities are needed to prioritize the exploitation of sand for filling projects and key traffic works. In meetings to resolve difficulties for construction works and projects, provincial leaders requested relevant departments and branches, especially the Department of Natural Resources and Environment, to advise the province to supplement the planning on land use plans, review construction sand mines to proactively supply filling materials for project construction; the Department of Construction needs to regulate the announcement of construction material prices in a timely manner and closer to market prices. Investors should remove difficulties for contractors, consider extending the time for bid packages at risk of delay due to lack of material supply. In addition, contractors expect competent authorities to recommend the Government to have macro solutions to stabilize the market, ensuring the supply of construction materials to meet current needs.