Rising fuel and material costs slow public infrastructure projects

Rising fuel and construction material costs have forced many major public infrastructure projects to slow down or proceed intermittently, putting national priority works at risk.

In Ho Chi Minh City, multiple major infrastructure projects are facing delays due to rising supply chain costs. According to Mr. Doan Hai Linh, Director of the Tam Thang Ward Investment Project Management Board, asphalt paving has been postponed for two weeks as contractors await potential reductions in fuel prices.

For example, the planned asphalt work for Nguyen Binh Khiem Street in Vung Tau Ward has been deferred from March to April.

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The Nguyen Binh Khiem Street expansion project in Vung Tau Ward, Ho Chi Minh City, has not yet been paved due to rising material costs. (Photo: SGGP/ Quang Vu)

Contractors on the Ho Chi Minh City – Long Thanh Expressway expansion also face increased costs and limited material supply, particularly in packages XL01 and XL02. Khang Nguyen Construction reports that fuel price hikes have triggered material price surges of 3–10 percent, including concrete up VND100,000 (US$3.8) per cubic meter, sand up VND20,000–VND40,000 (US$0.76- US$1.52) per cubic meter, and stone up 3–5 percent. Material supply is limited, with many suppliers issuing short-term, even daily, quotes, complicating budget and schedule planning.

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Construction of Long Thanh Bridge is part of the HCMC – Long Thanh Expressway expansion project. (Photo: SGGP/Quoc Hung)

Similar challenges are reported in the Northern provinces. Contractors on the Cho Moi – Bac Kan Expressway and the Hanoi – Hai Phong, Cau Gie – Ninh Binh connecting roads have seen a 7–10 percent rise in essential construction materials within March alone. Delays and intermittent work are widespread, threatening project timelines.

Some projects, such as the Cam Lo – La Son and La Son – Hoa Lien Expressway expansions, have also slowed due to material cost surges. Contractors are optimizing labor and equipment to maintain progress while minimizing the impact of volatile prices.

The Southern Expressway Project Management Unit is coordinating with contractors to assess local material availability, ensuring timely supply and avoiding construction gaps. VARSI (Vietnam Road and Bridge Construction Investors Association) has raised concerns about fuel shortages, price hikes through intermediaries, and delayed publication of official construction price indices, which hinder financial planning and continuous construction.

VARSI recommends government intervention to stabilize fuel and material prices, timely adjustment of construction indices, and consideration of extended project deadlines for heavily affected works. Fuel suppliers, including Vietnam National Petroleum Group, are urged to prioritize construction fuel supply.

The Ho Chi Minh City Department of Construction has intensified oversight of material supply to prevent hoarding, while contract clauses allowing price adjustments based on fuel and material fluctuations are helping contractors share risk and maintain progress.

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