The Minister of Transport, Dinh La Thang, explained in a recent interview with the Lao Dong Newspaper that the high cost of construction for roads in Vietnam compared to other countries is due to slow site clearance.
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| Minister of Transport Dinh La Thang |
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| Thang Long Highway, one of the most expensive road in Vietnam |
NA deputies brought this problem up at a conference about investment law. Many said that the cost of road project is three times higher in Vietnam than in US, and the quality is worse. Why is the cost so high in this country?
By the end of 2012, the Ministry of Transport and the Ministry of Construction submitted a report explain this problem to government. We also compared the cost for highway construction with the cost in China, US, Japan for future adjustment.
But comparing prices is relative because price is depend on many things such as hydrogeology. Complicated hydrogeology structures will cost us a huge sum of money on preventing subsidence from traffic movement. At some sections, we have to build overpass and its cost is three to five times higher than similar section of road.
Another factor is dense population and people's preference to live close to the road. In US, Japan or South Korea, they only need an interchange for every 100-200km of road but we need one for every 10km.
However, the most expensive factor is ground clearance. Several projects may be put behind schedule for 5 years because they cannot complete ground clearance task. Expense on ground clearance takes up to 8-10% of total cost. In Lang-Hoa Lac Highway project, cost for ground clearance took up 21% of total investment.
This is only three most important factors of seven objective factors that make the construction cost in Vietnam high.
Do investors and consulting companies collaborate with each other to raise the price three times higher and what can you do to prevent this wrongdoing?
Yes, there are such cases. Some investors deliberately bid on super low prices and wait for inflation to ask for more fund. At some case, investors try to stay behind schedule to ask for adjustments and more money. Asides from seven objective factors, the construction cost in Vietnam is high because of many wrongdoings such as messy management work or people want to exaggerate achievement with little capacity.
We will be strict on being on schedule and closely review the design to be sure that it's the most suitable one. Individual responsibilities, especially the leaders, will be prioritised. Local authorities' desire to have the best, longest, tallest in their areas should also stop.
On a side note, what is your opinion on the exorbitant price for a instant noodle bowl at Noi Bai Airport? Will there be adjustment to the civil aviation laws?
The pricing laws in 2012 assigned us the responsibility to manage prices for aviation services. I know it's expensive to rent a kiosk inside the airport but it's unacceptable that they charge VND180,000 for a instant noodle bowl or VND40,000-50,000 for a clear water bottle. This kind of monopoly must be changed.
