How to Reduce Losses in Construction Works?

How to Reduce Losses in Construction Works? 

The issue of how to reduce losses in construction works was discussed extensively at the last session of the National Assembly. At a recent meeting, the Budget Committee of Ho Chi Minh City pointed out that the growth rates and investment in construction have increased from 19.3 per cent in 1995 to the present 63.1 per cent. However, as the investment has increased, the management and quality have decreased, and the losses have yet to be determined.

Concerning quality, Mr Nguyen Van Hiep, Deputy Head, Construction Department, Ho Chi Minh City, said that it is necessary to improve quality to retain the credibility of customers. In many cases, although with advanced technology and good materials, the careless mixing has reduced the quality of the products.

Mr Nguyen Xuan Bang, Chairman and Director General, Industrial Construction Joint Stock Company, said that the main problem is the management of capital. Losses can occur in all parts of the projects. Poor quality is also a loss. The evaluation must include the efficient use of the projects not only on low cost. Normally building materials make up 70-80 per cent, the rest is payment for work. It can be easily calculated. Loss can happen only in case of fraud. Loss and waste often take place in the design period. The saving is mainly in designing, some 10 per cent, while in the implementation it’s much less.

There must be joint efforts of related authorities to reduce the losses. The quality of local invested projects is lower than that of foreign invested projects, Mr Hiep added. In the process of economic integration, Vietnamese enterprises must develop accordingly. Before investing abroad, they must perform well at home. With better investment policy, foreign investors will increase business activities in Vietnam using local material and human resources in the interests of both sides. Sectors and localities must refrain from selfish interests and simplify formalities for investors.

The experiences of other countries show that it is necessary to hire consulting companies with full responsibility toward the investors. In Vietnam, consulting companies often render service to projects with value much higher than their own capital and property. In case of failure, they cannot compensate for the loss. Therefore the State must re-organise the consulting companies to ensure the quality of projects.

• Cong Ly