Construction price index fails to reflect market fluctuations

Construction firms are complaining that they are being put at a disadvantage by the Ministry of Construction because its quarterly price reports do not reflect monthly market movements.

The issue was raised during a seminar organised by the ministry this week.

Those at the meeting said the ministry should publish its research monthly so that firms could more accurately assess their costs and charges.

Lam Van Hoang, from the Ministry of Transport’s Project Management Unit No2, said quotes were based on projected figures, which themselves were calculated on official price-fluctuation forecasts. Because of monthly market fluctuations, particularly during the 2004-08 period, construction firms say they have been losing out.

Wang Gui Jun, of Ha Noi-based China State Construction Engineering Corporation, said it was virtually meaningless to publish the construction price index on a quarterly basis.

The time between purchasing and the publication of the price index could be very significant, Wang said.

He added that the price index should protect the interest of contractors.

Ngo The Vinh, from the Institute of Construction Economy, said steel prices had risen from VND11-VND16 million ( (US$564-$820,512) per tonne in a 40-day period. Every two or three days the price of steel rose by VND200,000 to VND300,000 per tonne which had a major impact on construction, he said.

To make the index more effective, Tran Dang Luyen, from the Department of Construction Management at the Ministry of Agriculture and Rural Development, said the construction price index needed to be published monthly.

He also said the index should be applied to all 63 provinces and cities instead of 12 regions. — VNS

Tags: Vietnam Construction price index

Posted by VBN on Sep 18 2010. Filed under Construction, Industry. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry